Bank break-ups leave Netherlands short of big names

By Ben Berkowitz and Gilbert Kreijger

AMSTERDAM (Reuters) - The dramatic downsizing of top Dutch banks, which had proudly flown the nation's flag globally for the past two decades, has the left the Netherlands bruised and in search of a national champion.

The eurozone's 5th largest economy could be left relying on exports of machinery and iconic tulip bulbs for brand recognition across the world, though analysts say its banks will continue to be strong, if smaller, players.

The dismantling of ABN AMRO and Monday's announcement that ING (ING.AS) will be split up diminishes two ambassadors of the Dutch economy that enjoyed far-flung reach and reputation for prudent financial management.

Both will end up being regional retail banks -- with international presences, to be certain, but nothing like what they enjoyed even two years ago.

Analysts of the Dutch economy say the problems are more structural than just the recent troubles at local banks.

"The Netherlands is of course a very special country. It's very small ... it did acquire in the past a type of position in international trade, international services which is much larger than you would expect from a country like this," said Harald Benink, a banking and finance professor at Tilburg University.

"What you now see with all the developments in the world, and in particular I would say globalisation of markets, it becomes harder to maintain that position primarily because of reasons of size," said Benink, who is also chairman of the European Shadow Financial Regulatory Committee.

An international consortium bought ABN in 2007 and split it up despite reluctance from the Dutch central bank (DNB), which favoured a merger between ABN and ING. A year later the deal went sour as credit markets buckled, and the Dutch government was forced to nationalise the now-smaller ABN.