Climb every mountain.

The Dutch trader Peter Minuit purchased Manhattan island from its natives in 1626 for the equivalent of $24 in trinkets, and from this exchange New Amsterdam was created. One spring morning nearly four centuries later, not far from where that remarkable deal occurred, Dutch banker Peter Jan Kalff rang the opening bell at the New York Stock Exchange, allowing its pin-striped natives to buy the newly listed American Depositary Receipts of ABN AMRO Bank Holding N.Y., the Amsterdam-based international banking titan, at $18.50 a share.

Minuit landed an unbeatable bargain, but Kalff, ABN AMRO's rugged-faced 60-year-old chairman, has proved an astute investor as his company aggressively expands its commercial banking and finance reach. Formed in 1990 from the merger of two Dutch rivals - Algemene Bank Nederland and Amsterdam-Rotterdam Bank - ABN AMRO has since leveraged strategic acquisitions and internal growth to become the world's 14th largest banking group, with assets of $346 billion. Prior to becoming chairman in 1994, Kalff directed the bank's globetrotting international division, which now involves a commercial banking presence in 70 nations and an investment banking operation in 38 countries.

These are restless times for banks, and ABN AMRO is no exception. Banking is a consolidating industry, relying on mergers and cost-cutting to boost revenues and bottom-line results. It's also capital-intensive; it takes money to handle customers' money in the convenient electronic fashion they demand. European banks are further challenged by the arrival of the Euro, the pan-European currency scheduled for 1999. If it indeed happens, recent controversy and uncertainty notwithstanding, corporate customers will want a complete European network from their banks, but a reliable system requires cash up front. Striking a balance between the cost and rewards of these myriad services is not easy, but it is Kalff's chief responsibility. "You have to keep moving," he says. "If you start to stagnate, then other banks are going to overtake you."

And the competitors are no slouches: HSBC Holdings of the United Kingdom, Germany's Deutschebank, and Citicorp of the U.S. are three of the fiercest global players. HSBC is the world's most profitable bank in terms of return on equity; ABN AMRO comes in 11th. Return on assets, a measure of profitability, was just 0.54 percent in 1996, while return on equity was 13.4 percent. Management's stated goal is for annualized 13 percent return on equity and a 7.5 percent gain in earnings per share. By contrast, Citicorp's return on assets in 1996 was 1.37 percent, with 20.6 percent ROE. Clearly the Dutch bank has room for improvement.

Facing this eat-or-be-eaten pressure, it's no surprise that Kalff is always on the prowl to add value. The bank's usual tactic is to acquire the third- or fourth-largest operation in a target market, as it did in 1996 with the number four Hungarian bank Magyar Hitel Bank. "The number one bank in most of these countries is a source of national pride," he says. "If you buy that as a foreign bank, you will have resistance. And typically these larger banks are less efficient."

In the U.S., the bank is focused on the Midwest and is quietly touching the American heartland from its Chicago base. Assets of $86 billion make ABN AMRO the 11th largest bank in the U.S., and the country's biggest foreign bank. The recent purchases of Standard Federal Bancorp., a leading Michigan thrift, and The Chicago Corp., a small Chicago investment bank, are building blocks in ABN AMRO's drive to counter powerful rivals like Banc One, Nationsbank, and Norwest, and to solidify its position as a profitable U.S. super-regional.

Expansion is also the impetus for the bank's NYSE listing. It had tired of paying for U.S. acquisitions in cash while competitors forked over high-priced stock. With the U.S. listing, ABN AMRO can now afford the same cut. What's on Kalff's shopping list now? A big Wall Street brokerage? "No," he says. "I'm convinced that wouldn't work." Kalff worries that the acquired firm's best people might leave owing to differences in corporate culture, leaving ABN AMRO with a high-priced name and few rainmakers. A more likely option is to snap up another modestly-priced thrift. "We stick to two rules on acquisitions," Kalff declares. "It should fit into our policy, and we want to have 13 percent return after tax in at most three years. That becomes difficult if you have to pay 25 times earnings, unless we can pay with our own shares at a very high multiple."

The U.S. is only one point in Kalff's vision. The bank is pushing into Latin America, Southeast Asia, and Central and Eastern Europe, emerging areas where Kalff expects significant growth. Just now the bank is looking for a consumer banking operation in Indonesia. In fiscally troubled Thailand, ABN AMRO Hoare Govett is taking a 49 percent stake in Bangkok-based Asia Securities Trading. The bank intends to invest substantially in South America, doubling its branch network over the next four years to 250. And the most profitable retail banking unit after Holland and the U.S. is Brazil, where the bank does a brisk consumer lending and automobile finance business. "Net interest margin in Brazil is way above what you can make in the emerged markets," says Kalff.

Yet it's in these developed and fragmented European markets that ABN AMRO encounters its toughest hurdles. About half of the bank's $9.8 billion in 1996 revenue came from Holland, down from roughly 70 percent at the time of the merger and falling as the bank diversifies abroad. At home, Kalff has helped instill greater operating efficiencies, trimming the domestic branch network to 1,000 from 1,400. Opportunities are less clear in other European locales. "The toughest part of our franchise is Europe outside Holland," Kalff admits. "The banking markets are mature, and they are not completely efficient. It's very difficult for a bank like ours to go into the German market or the French market and find some niches."

But cross-cultural selling is exactly what ABN AMRO must achieve to sharpen its competitive edge. As Europe becomes more integrated, so will its banks. The date circled on every banker's calendar is January 1, 1999. That's when the European Economic and Monetary Union will introduce its new universal currency, the Euro. ABN AMRO is currently developing systems to handle this new money, at considerable expense. Kalff says $200 million of IT spending is earmarked for the transformation.

With eight European countries using a single currency, banks will lose a big foreign exchange business. But Kalff sees a silver lining: Only three banks in the world have a presence in all European countries - Citicorp, Deutschebank, and his own. And, he claims, "We are the only one of those three that can offer corporate customers a complete European network."

There aren't many times when Kalff isn't thinking about banking. A lawyer by training, he went into banking 33 years ago when he decided the law wasn't his calling. He joined ABN and rose quickly through the ranks, from an early assignment as the manager of its Rotterdam branch to a post on the bank's managing board. The bank manages by consensus, Kalff explains. "We take time to reflect and discuss and make sure most everybody is satisfied." It sounds all-too-genteel, but Kalff expresses an affable, confident demeanor that appears well-suited to the image of a patrician Continental banker. His tall and athletic build is the most telling clue that Kalff enjoys sports and is an avid skier, tennis player, and mountaineer. He often hikes with his wife and three children in the mountains of Switzerland. Kalff recalls how he used to head for the hills loaded with heavy gear, but his adventures now are nothing so strenuous. It's understandable - he saves the steep climbing for the office.

PROFILE

PETER JAN KALFF Chairman ABN AMRO

Age: 60

Birthplace: Amsterdam.

Family: Wife, Lydia; three children.

Education: Law degree, University of Leiden, in the Netherlands.

Corporate goal: Solidifying ABN AMRO as a "universal bank."

Greatest influence: His father, who was also an attorney.

Pastimes: Skiing, tennis, golf.

Favorite getaway: The mountains of Switzerland, where "you can put your mind at rest."

Favorite classical recording: Mahler's Symphony No. 1, conducted by Bernard Haitink, Amsterdam Concertgebouw.