ABN Amro Holding NV (ABN) dropped its support Monday for a takeover offer by Barclays PLC (BCS) which is the target of a higher competing bid by a group led by Royal Bank of Scotland PLC.

But the bank's boards said in a statement they could not endorse the RBS bid either because of "significant unresolved questions." The boards said they may yet decide to favor one offer or the other.

The RBS bid, mostly in cash, was worth 70.5 billion euros ($96.6 billion) at Friday's closing share prices, while the Barclays bid, mostly in shares, was worth 63.9 billion euros ($87.5 billion).

Either deal would be the largest in the history of the financial industry.

The decision marks a significant break with the bank's previous policy, which has been to favor the Barclays bid.

ABN also reported net profit for the second quarter of 1.16 billion euros ($1.59 billion), down 4.1 percent from 1.21 billion euros, due to higher taxes and a decline in its mortgage businesses which is being sold in a deal due to close in the third quarter. Operational earnings rose in line with analysts' expectations.

The results did not show an exodus of ABN Amro staff or customers due to the uncertainty surrounding the bank, as some analysts had feared.

The ABN Amro boards praised the Barclays bid as "consistent with ABN Amro's ... strategic vision."

In addition, Barclays' recently announced strategic cooperation with China Development Bank "should further enhance the growth opportunities of a potential combined Barclays/ABN Amro group in the attractive Asian market and could result in creation of additional longer-term value for ABN Amro shareholders."

However, the boards said the financial difference between the two bids was simply too great to ignore.

Chief Executive Rijkman Groenink, who prefers the Barclays bid despite the higher RBS offer, said Barclays shares were trading at an "extremely low" level and he could envision a scenario in which they would rise enough for Barclays bid to pass the RBS-led group bid in value.

That would require an increase of around 18 percent from the 678 pence ($13.82) where they were trading Monday.

Questioned by reporters on why he thought Barclays' shares might rise so much, Groenink said he didn't know they would. "I don't have a crystal ball," he said at a news conference after the results were released.

ABN Amro shares rose 0.7 percent to 35.14 euros ($48.14), midway between the two bids, signifying ongoing doubt by investors as to which will prevail.

Discussing the RBS bid, the boards said that "whereas sources of integration risks are broadly similar to those identified for the Barclays offer ... (there are) significant unresolved questions about the proposed breakup of ABN Amro and the proposed methodology of the consortium to implement such a break up."

Under the RBS bid, Fortis NV of Belgium would take ABN's Dutch operations, Banco Santander Central Hispano SA wants its Brazilian and Italian arms, and RBS wants the rest, including ABN's investment banking arm.

The largest hurdle to that plan is now seen as Fortis' shareholders, who must approve a 13 billion euro ($17.8 billion) share issue on Aug. 6 to pay for its share of the deal — though the consortium may have an alternate plan in case of failure.

Groenink said Monday that ABN was "in no way whatsoever" attempting to influence the outcome of the Fortis vote, as some analysts have speculated.

The battle for ABN has been stretching on for months since it announced plans to be acquired by Barclays in March. After RBS signaled in April that it intended to make a higher offer, Groenink agreed to sell ABN's U.S. arm, LaSalle Bank Corp., to Bank of America Corp. for $21 billion.

The surprise move was widely seen as a poison pill measure to frustrate RBS, which also wanted LaSalle. It led to a rebellion by ABN shareholders who saw Groenink's favoritism toward a less lucrative deal as a betrayal of their interests. A spate of lawsuits by shareholder groups and competing banks followed, freezing the takeover fight for two months.

Ultimately, the Dutch Supreme Court ruled the LaSalle sale was legal and binding, and the RBS consortium pushed ahead with its higher offer anyway on July 18.

Groenink was sidelined from direct negotiations, and ABN has promised not to unexpectedly sell any more operations.

Last week, Barclays increased its offer to narrow the gap somewhat with RBS.

On Monday, ABN said it has amended its agreement with Barclays and "will now be free to discuss the consortium offer with the consortium and its advisers."

Groenink said the company must hold an extraordinary shareholders' meeting at least 8 days before RBS' bid expires on Oct. 5, putting it on Sept. 27 at the latest. Four days before that time, by Dutch law, the boards must give a "reasoned opinion" to shareholders about the bids, with or with out a recommendation.

"By that time, it's likely that we'll have an entire review of the two bids as they stand at the time, and we'll consider whether the reasoned opinion needs to be adjusted for either or for both," Groenink said.

Barclays Chief Executive John Varley said Monday he understands "that at the current time, it is difficult for the boards of ABN Amro to make a clear recommendation to their shareholders."

However, he said he was "confident" the boards would eventually endorse the Barclays deal.