Positioning the ABN AMRO wholesale banking franchise

Piero OvermarsMember of the Managing BoardHead of Global Markets

Credit Suisse Investment Banking and Diversified Financials Conference 2006London, 1 March 2006

2

Overview

Significantly improved performance by wholesale in 2005

Drivers of the performance uplift in 2005

Opening up wholesale will continue the positive momentum

Further improvement – our commitments

Future drivers of growth

A significantly improved performance in 2005

4

Commercial Banking

Fixed Income, Futures, FX

Equities and Inv. Banking

Other

Total operating income

Operating costs

Operating result

Net operating profit

RWAs (EUR bln)

Efficiency ratio

1,833

1,351

1,382

136

4,702

4,402

300

270

72.9

93.6%

1,976

1,822

1,456

87

5,341

4,699

642

705

77.0

88.0%

2004 2005

We have delivered an uplift over 2004

In 2005 WCS delivered a material improvement in revenue, operating result and consequently Efficiency Ratio vs 2004

However, an Efficiency Ratio of 88% still leaves the wholesale franchise vulnerable to cyclical movements

Note: IFRS basis. Excludes Private Equity. All 2004 figures are as per relevant press releases, excluding the 2004 restructuring charge. Not corrected for disposals and exceptionals. See Appendix for detailed breakdown of product categories

7.8%

34.9%

5.4%

-36.0%

13.6%

6.7%

114.0%

161.1%

5.6%

∆

5

Improvements in 2004 loss-making product areas

2005 delivered an operating result uplift and an efficiency ratio improvement in loss-making product areas

Reduced dependency on Treasury and Lending - revenue shift towards Fixed Income & Treasury and Equities & Equity-related

In the first year of Transaction Banking as a cross-SBU product group we succeeded in moving that product area close to profitability

0

50

100

150 2004

2005

Efficiency Ratio 2004 and 2005 (%)

Lendin

g

Transa

ctio

n Ban

king

Fixed

Inco

me

& Tre

asury

Equities

& E

quity-re

late

d

Drivers of performance uplift

7

Delivering the wholesale agenda

Growth initiatives

Derivatives Step Change

programme

Network Leverage

Investment Banking

Agenda

Asia Strategy

Trading

Rationalisation of resources

Capital

Services

Front Office

Group synergies

Transaction Banking

Consumer & Commercial

Client segments

- Empresas

- LaSalle

- BU Netherlands

Private Investor Product

(PIP)

8

Case Study: Derivatives Step Change

We have invested in derivatives product development, sales, marketing and coverage:

– New hires and upskilling our current staff

– Spreading derivatives literacy across WCS and related support functions

Formed Derivatives Sales & Solutions Group to drive sales capability

Upgraded risk processes and improved IT infrastructure

Co-located corporate derivatives in Equity Capital Markets

Awarded 2005 “House of the Year” for credit derivatives by Structured Products

Awarded 2005 “Best Bank” for Structured FX products by FX Week

0

100

200

300

400

500

600

2004 2005

Revenues IFRS reserves

Structured Derivatives development (EUR mln)

9

Case study:Restricting business-as-usual costs

Since 2001, we have reduced our business-as-usual services and other support costs to free up investment in front office staff and services investment

We announced a restructuring in December 2004 aimed at exiting 1,100 FTEs, which will be completed in Q1 2006

This has freed up resources for investment in Derivatives, in IT to upgrade trading infrastructure (EUR 95 mln), and in mandatory compliance activities (Basel II, Sarbanes Oxley, etc., EUR 75 mln)

0

1,000

2,000

3,000

4,000

5,000

2001 2002 2003 2004 2005

Services BAU Other support

Services investment Front office

WCS cost development (EUR mln)

10

Case Study:Driving Group synergies During 2005 in the home markets, we have:

– Merged coverage of WCS and BU Netherlands commercial clients

– Integrated WCS and LaSalle corporate distribution and enhanced the LaSalle sales force with derivatives hires and training

– Driven up derivatives revenues from BU Brazil clients by over 50%

Our Private Investor Product group has also worked closely with the other Group SBUs to deliver a strong year on year improvement

Although from a low base, 2005 demonstrated the potential of our strategy to cascade the innovation from Global Clients to our chosen sweet spot clients

0

25

50

75

100

2004 2005E

+23%

0

20

40

BUNetherlands

PrivateClients

New GrowthMarkets

Sales of WCS FI and FX derivatives products to non-WCS clients 2004-5% (EUR mln)

Sales of WCS Private Investor products to C&CC clients 2004-5 (EUR mln)

Opening up wholesale will continue the positive momentum

12

Unbundling will deliver continued performance improvement

In 2005 we have delivered a significant turnaround in WCS performance

Opening up WCS to the Group will result in greater leverage of wholesale banking products across a wider set of clients

The unbundling will contribute to a continued improvement in the ER

Arm’s length interaction between Global Markets and the Client Units will increase the transparency of the product economics

– Clarity on which products we can consistently deliver at the right price and the right quality to our sweet spot clients

– For products that do not meet this standard, we will pursue alternative solutions, potentially including exit, downsizing, joint ventures, in-sourcing and others as necessary

13

We have unbundled WCS to deliver on the Group’s sweet spot strategy

Global Clients

550 former WCS clients with most demanding needs, inspiring product innovation

Regional Client Units

Serving the former WCS’ commercial clients better and more efficiently

Global Markets

Product platform, developing and delivering products for all the Group’s clients

Scale/Feeder Scale/Feeder

Product InnovationProduct Innovation TopPrivateClients

MNCs

Mass Retail Small Business

Consumer Commercial

SweetSpot

Private ClientMass Affluent

Mid-Market /FIs

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New organisation: playing systematically to our strengths

Global Markets

Europe North America

LatinAmerica

Asia Private Clients

Global Clients

NL

Asset Management

Group Functions

Services

Transaction Banking

Consumer Client Segment

Commercial Client Segment

Local Products

Local Products

Local Products

Local Products

Local Products

Local Products

M&A ECM

Global Markets includes fixed income (trading and capital markets), FX, treasury, equity, structured lending and derivatives

In line with our client-led strategy, Global Markets’ activities will be reported under Client Units and Group Functions

Further improvement – our commitments

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What are we doing in 2006?

Following through on our revenue growth initiatives, Derivatives, Equities and Fixed Income, facilitated by the new organisation

– Using the local cross-sell expertise of the Regional Client Units to drive up the penetration of the Global Markets products to all the Group’s clients

– Continuing the improvements we have made with Global Clients through more focused coverage

– Bringing capital markets solutions to our clients and increasing our capital velocity

Following through on cost reduction initiatives in the new Services organisation

– Delivering further run rate savings through continued outsourcing, procurement and real estate programmes

– To fund investment in growth initiatives, IT infrastructure, compliance and compensation for our critical talent

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Commitments

Capital constraint and minimum returns for Global Clients

– RWAs on average less than 10% of Group total by end 2006 and beyond, with a return above our 10.5% assumed cost of equity

Improved efficiency ratio for Global Markets

– Improving by at least 5 percentage points in 2006, and below 80% by end 2008

Improved efficiency ratio for commercial clients in 2006

– To be achieved through revenue uplift and tight cost control in the Regional Client Units (targets to be confirmed with Q1 2006 results)

Future drivers of growth

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Rates markets main themes

Global liquidity conditions remain expansive, despite central banks pushing rates higher in 2006

Increasing risk appetite – investor demand for new asset classes and products within asset classes

Japan - BoJ expected to eliminate quantitative easing and raise rates in 2006

Pension fund reform/move to ALM frameworks gathering momentum

Observations

We have focused on being an idea driven niche unit, particularly in ALM area

By putting an increasing focus on trading, ABN AMRO has been able to combat margin compression

ABN AMRO has built new JPY business to take advantage of our perceived growing importance of the Yen market over the next years

Our response

Short Term

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Credit markets main themes

Credit fundamentals remain supportive for the continuation of tight spreads, but M&A activity will continue to cause spread shocks

Demand for credit product remains healthy albeit selective (eg structured credit due to diversification benefits)

Yield hunting has supported demand for HY and EM assets

Increased liquidity - a result of growing influence of CDS indices and electronic trading

Observations

Focus on leveraging electronic

platforms, freeing traders to offer

integrated credit trading products

Expanded our innovative product

set through a newly created

Structured Finance Trading team

Expanded our financial sponsor

coverage’s Leveraged Finance

and High Yield activity

Expansion of Structured Capital

platforms with strong distribution

focus covering Inf. Cap. / SF and

Real Estate Finance

Our response

Short Term

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Emerging markets main themes

Increased corporate issuance as sovereigns are running surpluses on budget and current accounts

Application of credit derivatives to create synthetic assets

Hedge funds to play an increased role in project and principal financing

Growth of asset securitisation, CDO and CLO in view of Basel II

Growing investor acceptance and appetite for local market assets

Observations

Integrated our local markets currency

product sales and trading to provide

a one-stop shop for clients

We are also expanding the product

offer (e.g. EM asset securitisation,

CLO/CDO), especially focusing on

Access products leveraging the

Bank’s network

As Emerging Market clients’ needs

become increasingly sophisticated,

ABN AMRO offers them tailored

solutions across equities, fixed

income and FX

Our response

Short Term

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Foreign exchange marketsmain themes

The slump in the ISK has rung alarm bells in the FX market about ‘carry trades’ but there is no sign of lasting knock-on effects

Risks could emerge from the huge volume of speculative open interest

Implied volume remains very low in most G10 FX , with market focusing on other FX pairs to generate risk

Continued margin compression driving business to e-platforms

Observations

We have automated a greater volume of business, focusing on the development of more sophisticated structured FX solutions eg. algorithmic trading, FX overlay

We have increased our risk appetite through smarter proprietary trading

Hubbing our trading desks has improved efficiency whilst bringing clients 24 hour trading in over 150 currencies

Our response

Short Term

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Equity markets main themes

Equity Markets to remain robust (client activity levels will continue at these high levels)

Increase in market volatility and continuation of recent high levels of M&A transactions

Continued growth of hedge funds and the range of their activities

Unbundling to go from a UK regulatory requirement to a global market standard

Observations

Seeing the benefits from our integrated equity platform, upgrading trading capabilities, increased automation and new equity derivative products

Attracting sustainable Hedge Fund business, we benefit from higher commissions of the broader product range Hedge Funds demand

We have developed and marketed innovative and commercially focused research that has received many market accolades

Our response

Short Term

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Derivatives markets main themes

Rise in equity markets has increased demand for structured equity products

High commodity prices driving demand for commodity hedging as well as investment products

Tighter credit spreads encouraging investors to leverage credit exposure – new products such as Leveraged Super Senior and Forward CDOs

Managing wealth for an ageing population leads to demand for a variety of new products with longevity risk and inflation sensitivity

Observations Structured Equity is for us an

established strength

In 2004 and 2005 we established a commodity derivatives capability which is now fully functioning

We are at the leading edge with structured credit derivatives

We have developed both inflation and insurance risk management capability and an initial series of transactions has been completed

Our response

Short Term

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Continuing industry growth drivers

Description Implications

Commoditis-ation

Growth of derivatives

New client segments

Product lifecycles dramatically shortened, limiting the window in which to capture attractive returns

Premium on innovation, product pipeline and rapid industrialisation of commoditising business lines

Proliferation of products (OTC, structured, exchange traded) and end-users (retail, institutional, corporates)

Scope and depth of product set and distribution channels significantly increased

Investor/client groups that did not exist five years ago are now the ‘must serve’ customer segments (mid-market, FI, Public Sector, EM commercial clients…)

Effective client segmentation and account planning across products and geographies

Building capabilities to capture high growth opportunities

Continuing Trends

26

Commoditisation – cash equity example

0

5

10

15

20

25

1998

2000

2001

2002

2003

2004

2005

e

2006

e

Basis Points

Year

Europe

US

Source: Merrill Lynch

A commoditising product - Equity commissions, US vs Europe

Cash equity commissions have declined rapidly as cheaper execution channels have emerged and buyer power increased

Unbundling looks set to accelerate this process

Regulatory concern that fund managers provide no transparency on brokerage services purchased with client funds

Institutional investors have offered to separate the purchasing of execution and content. Commission Sharing Agreements (CSA) have emerged as the preferred method of separation

– Fund managers agree to focus almost all

execution with a small number of brokers

– These brokers agree to pay a pre-agreed

percentage of that commission to other

brokers who have provided the fund

manager with non-execution services

Value chain unbundling - the story so far

Continuing Trends

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Why value chain unbundling is attractive for ABN AMRO

Implications of cash equity unbundling

In a pre-unbundled world fund managers demanded full ‘waterfront’ research services

This has disadvantaged mid-tier players who had to support the same large cost base of the market leaders with lower revenues, whilst only being rewarded for research in sectors where they were strong

CSAs have allowed brokers to scale the research product to where they have a competitive advantage, without incurring high de minimus cost of ‘waterfront’ coverage

With CSAs, excellence in execution is critical

– Firms on the execution lists will see growth in market share

– Firms who are excluded will see a rapid contraction

ABN AMRO has been an early adopter and advocate of unbundling

An unbundled business model is attractive for ABN AMRO

Seeing the benefits from our integrated equity platform and focus on execution

Every major client we have approached who is setting up CSAs has told us we will be on their list

Continuing Trends

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Derivatives – developing and supporting client demand

Overall growth in derivatives revenues reflects the emergence, and rapid acceptance, of new asset classes and continued innovation, particularly in higher margin structured products

We are committed to further developing our derivatives offer across the client spectrum

– Serving our Global Clients and institutional investors with the innovative derivatives solutions they demand e.g. dedicated, cross asset class, Derivative Sales and Solution Group

– Using our local intimacy to bring these products to sweet spot client segment – both mid-market and FIs. Evolution and replication of in-house best practice to new clients e.g. PIP to commercial

0.6 0.9 1.6 2.2 2.73.8

5.4

8.4

12.4

1H 01 2H 01 1H02 2H 02 1H 03 2H 03 1H 04 2H 04 1H 05

105% p.a.

128% p.a.

Source: ISDA

Credit Derivatives – notional outstandings, 2001 – 1H 2005, US$Trn

Continuing Trends

29

Serving new client segments

Source: ABN AMRO Equity Research, Dealogic Loanware

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005

Global financial sponsor-backed acquisition volume, $bn

Financial sponsors were the key client driver behind the upturn in M&A over 2005

– Financial sponsor backed acquisitions,

globally, were valued at $346bn in 2005, a

40% increase on 2004

– Leveraged loans have become the most

important source of funding

Global Markets is well placed to serve this segment through the sweet spot strategy

– Well placed as it fits with our longstanding

credit structuring & distribution expertise

– Financial sponsor backed M&A volume

typically focused on the mid market

– Network clear competitive advantage in

originating and financing deals

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005

Global financial sponsor-backed loan financing volume, $bn

Continuing Trends

30

Conclusions

WCS improved significantly in 2005 on the back of growth initiatives, resource rationalisation and Group synergies

– Efficiency ratio improved from 93.6% to 88.0%, but will improve further

Opening up WCS to the Group – WCS unbundled into three groups; Global Markets, Global Clients and Regional Client Units

– Specific performance commitments made for each

We are well positioned to drive further growth in 2006 and beyond by aligning ourselves with identified market trends

– In particular : emerging markets; new client segments; leveraged finance; equity unbundling; ALM and derivative product growth

Appendix:

Definition product groups

32

Definition of the product groups

Commercial Banking : Loan products and all transaction banking services.

In the presentation, this is split between ‘Lending’ and ‘Transaction Banking’

Fixed Income, Futures and FX (FIFF) : Fixed income trading activities,

structured derivatives, futures and foreign exchange. In the presentation, all

of this except futures is included in ‘Fixed Income & Treasury’; futures is

included in ‘Other’

Equities & Investment Banking : Cash equities, equity derivatives, debt and

equity origination and corporate finance. In the presentation, all of this

except debt origination is shown as ‘Equity & Equity-related’; debt origination

is included in ‘Fixed Income & Treasury’

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Cautionary Statement regarding Forward-Looking Statements This announcement contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in this document that expresses or implies our intentions, beliefs, expectations, forecasts, estimates or predictions (and the assumptions underlying them) is a forward-looking statement. These statements are based on plans, estimates and projections, as they are currently available to the management of ABN AMRO Holding N.V.. Forward-looking statements therefore speak only as of the date they are made, and we take no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, without limitation, the conditions in the financial markets in Europe, the United States, Brazil and elsewhere from which we derive a substantial portion of our trading revenues; potential defaults of borrowers or trading counterparties; the implementation of our restructuring including the envisaged reduction in headcount; the reliability of our risk management policies, procedures and methods; changes resulting from the acquisition of Banca Antonveneta, including the risks associated with its business, as well as the difficulties of integrating its systems, operations functions and cultures with ours; and other risks referenced in our filings with the U.S. Securities and Exchange Commission. For more information on these and other factors, please refer to our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission and to any subsequent reports furnished or filed by us with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this announcement are made as of the date hereof, and we assume no obligation to update any of the forward-looking statements contained in this document.