on 6 September 2012
The Perfect Prey is a compelling read. It follows ABN AMRO at a board level during turbulent times of mergers, acquisitions and takeover bids which eventually led to the end of the bank as we know it. Smit chose to write from the perspective of Rijkman Groenink, the Board Director, and he uses a storyteller approach rather than a factual account of events. The feeling I got while reading this book is one of continued surprise. Surprise at the role that egos play at top level, surprise at the clumsiness with which scenarios are approached, surprise at the unprofessional arguments and fights at top level and surprise at the distance the supervisory board took along the way. Fascinating are the fights between retail bankers and investment bankers and their radical different views of where to take the bank. However it's difficult to say if Smit comes close to the truth or just scratches the surface. An interesting book but I slightly doubt it's historical relevance.
I was curious to discover what caused Lloyds TSB, long regarded as a bastion of good banking practices and conservatism, to have to go cap in hand and scrounge rescue money off the British taxpayer. It was put about in the media, that it's financial problems emanated from the ill-advised, hurried, and poorly investigated purchase of The Royal Bank of Scotland, headed by the now disgraced Fred Goodwin, which was stuffed full with way more than it's fair share of highly hazardous barely risk assessed mainly property loans, and a disastrous investment in the Dutch financial group, ABN Amro.
This investment cost over 17 times its book value based on profits which were an illusion - they simply weren't there, and soon after purchase when the illusory bubble burst, RBS had to scrabble together the largest rights issue in British Corporate History, underwritten by the British government after which RBS was dumped into the lap of Lloyds.
'The Perfect Prey' was purchased in a desire to find out what problems were in ABN Amro, that were not picked up on when it was purchased, that almost immediately imploded after acquisition. This book based on over 120 conversations with the most important people involved , allows the author Jeroen Smit to reconstruct the downfall of a Dutch institution, a bank whose rotten core was so disguised by paper profits of billions every year.
What this book does not give an explanation of, is why at the time due diligence was being conducted prior to purchase, the phalanx of eye wateringly expensive Investment Bankers, Accountants, Lawyers and other 'on the gravy train' advisors, did not spot the fraud that abounded in the accounts on a massive scale.
There are some particularly detailed and revealing profiles of the senior executives, foremost being that of Rijkman Groenink, the CEO, which portrays a man driven and obsessed with personal advancement and internal corporate domination. His self-delusion leading to complete self-denial over his pivotal role in the financial downfall of ABN Amro, perhaps explains the mantra of corporate responsibility evasion and deviousness that seemed to permeate the entire company especially as reflected in its financial results.
A meticulously compiled account, but a lot more intricate detail than I was looking for, making it somewhat slow reading - at least for me. I would imagine that for somebody working in or closely involved with ABN Amro during the period covered, would find the book of great interest, but for an outsider a bit heavy going.