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March 1, 1998

ABN AMRO Acquisitions?

By John A. Byrne

ABN AMRO Chicago Corp. is stepping up its grab for more introducing brokers, hoping to join the major-league players in the correspondent-clearing business.

"There is nothing to say that we won't go out and acquire another clearing firm," said Joseph Oliva, a senior official who heads up marketing at the Chicago-based clearing unit of ABN AMRO.

Oliva's feisty talk is spurred, in part, by the transformation of the former Chicago Corp. from a regional investment bank into a global powerhouse.

Oliva, a veteran of the Chicago Corp.'s clearing business, now heads up a reenergized clearing unit on the wing of ABN AMRO Holding NV., the Dutch-based investment bank that dipped into its deep pockets to acquire the Chicago-based Chicago Corp. in September 1995.

With $50 million in capital (and the clout of the parent's much larger capital cushion), 50 fully-disclosed clearing correspondents, an even larger number of execution and omnibus accounts and up to 400 staffers dedicated to clearing, Oliva is not shy talking business.

"We want to be considered one of major clearings firms, like Bear Stearns & Co. and Pershing [Division of Donaldson, Lufkin & Jenrette], and we want to be in their arena," he said.

"In the past," Oliva added, "we were selective. Now, with up to $50 million in capital, we can go after firms that are major clearing candidates. We can consider firms with $50 million, $100 million or $200 million in margin debits."

Oliva stressed, however, that ABN AMRO is not prepared to do a reckless highwire act. "We have the same capital requirements as the major clearing brokers. We won't talk to any firm that does not bring certain levels of revenue to us and has less than $100,000 in net capital."

"Day trading is interesting but we'll only do it selectively," Oliva added. "We'll look suspiciously on firms doing a lot of penny-stock deals. What we want is well-rounded organizations not weighted 100 percent or 70 percent in any one area."

One good sign of the times, he said, is the inquiries his clearing business is now receiving. "We're getting calls from major firms that like what we do. They know we don't chase tickets, though tickets are nice, of course. They know we want quality business."