ABN Amro Reports Strong Second-Quarter Net Profit
Dutch bank ABN Amro announced on Wednesday that its second-quarter net profit exceeded expectations, showing a growth of 83%. However, the bank also stated that it no longer expects to achieve its 2024 cost saving target of 4.7 billion euros ($5.16 billion) due to the impact of rising inflation and increased anti-money laundering (AML) measures.
ABN Amro’s CEO, Robert Swaak, expressed that ensuring the bank’s AML activities meet regulatory requirements is proving to be more challenging than anticipated. He emphasized the need for sustained efforts to reach a sustainable and adequate level of compliance.
The bank also provided updates on its full-year costs, revising its 2023 estimate to around 5.2 billion euros, improving from the previous projection of 5.3 billion euros.
ABN Amro, which is predominantly state-owned and one of the leading banks in the Netherlands, has been refocusing its operations on the Dutch market in recent years. This strategic shift has involved significant job cuts.
In the three months leading up to June, ABN Amro recorded a net profit of 870 million euros, surpassing analysts’ predictions of 570 million euros. This reflects a considerable increase from the net profit of 475 million euros reported during the same period last year.
Last week, ING Groep, the largest Dutch bank, also announced a better-than-expected 83% rise in second-quarter net profit. ING attributed this growth to higher interest rates, which boosted income from lending and fees, as well as low loan provisions.
ABN Amro’s CET1 ratio, a measure of capital strength for European banks, declined to 14.9% compared to 15.5% a year ago.
The bank has set the interim dividend at 0.62 euros per share, in line with its established policy.
