* Dutch ABN/Fortis asset sale deadline looms on Monday
* Kroes expected to rule on Lloyds/RBS in November
* Kroes to use UK banks as precedent for other state rescues
By Foo Yun Chee
BRUSSELS, Oct 16 (Reuters) - Neelie Kroes, said to be ready to wield her axe over some of the continent's state-rescued banks before her five-year term as Competition Commissioner ends this year, may get a first chance next week.
The Netherlands is due to say on Monday whether it has secured a sale of ABN AMRO or Fortis Bank Nederland assets -- probably to Deutsche Bank -- after spending 16.8 billion euros ($25 billion) nationalising the banks.
Kroes, seen favouring the German bank because she believes this would boost competition in the Dutch banking sector, will block the proposed merger of ABN and FBN if the combined group does not sell assets to guarantee competition.
However that goes, Kroes, 68, has plenty on her hands.
EU regulators in charge of policing state aid have approved more than 50 rescue schemes in the wake of carnage wrought by the collapse of U.S. investment bank Lehman Brothers last year.
Camped in portakabins in a Brussels courtyard, scores of extra European Commission staff were drafted in to sift through the carnage of the credit crisis, which prompted member states to prop up failing banks with trillions of euros of state aid.
Some of the trickiest cases remain to be tackled.
Britain's Royal Bank of Scotland and Lloyds Banking Group lead a clutch of lenders bailed out by governments across the 27-country EU who now have to downsize to appease the Commission in return for approval of their rescue.
Kroes is expected to announce her verdict next month and, according to an aide, would like to wrap up Lloyds and RBS at the same time.
The banks, both part-owned by Britain, are considered test cases for the EU executive -- unlike Germany's Commerzbank whose aid has been already approved and which had problems pre-dating the financial meltdown.
"They (Lloyds/RBS) will set the benchmark for other aided banks hit by the financial crisis, so it is important how the Commission proceeds," said a Commission official. "Their problems were rooted in the crisis."
Kroes could force the sale of billions of euros of assets, branch closures, drastic cuts in balance sheet and dominant market shares, restrictions on payments to investors, executives and staff, and a narrowed focus on retail banking.
A straight-talking economist and former businesswoman, Kroes told a conference last month that while some banks might have been too big to fail, none are too big to restructure.
The impact of that could hit Lloyds and RBS hard.
Still, the Netherlands is set to take centre stage first.
Meanwhile, Britain's nationalised Northern Rock could see a decision by November, splitting the lender into a retail deposit operation and a holding company in charge of the loan book.
And there are a host of others: ING of the Netherlands, BayernLB/HGAA of Germany, KBC of Belgium, LBBW of Germany, Franco-Belgian Dexia, and Ireland's three big banks to name a few.
"Kroes doesn't want to leave any skeletons in the cupboard before she leaves (at the year end)," says a close aide. "She will take as many decisions as possible."
Kroes was appointed Competition Commissioner in 2004 and is not expected to remain for another term. (Editing by Kirstin Ridley and Dan Lalor) ($1 = 0.6702 euro)