ABN AMRO's Private Bank Focused On Europe, Eyes Organic, M&A Growth

Tom Burroughes Group Editor London 16 February 2017

ABN AMRO's Private Bank Focused On Europe, Eyes Organic, M&A Growth

The CEO of the private bank talked to this publication about how he sees the organisation moving forward after disposals and changes in recent months.

ABN AMRO’s private bank is focusing on its core domestic market of Europe as it shuts sub-scale business operations in Asia, and sees opportunities to expand both organically and through acquisitions if the opportunities are right, its chief executive says.

“We will strive to more deeply integrate our activities in north-western Europe and develop our business here further,” Jeroen Rijpkema, chief executive of ABN AMRO Private Banking International, told this news service.

Rijpkema spoke to this publication shortly before the bank reported full-year and fourth-quarter 2016 results. As reported yesterday, the private banking arm of ABN AMRO logged underlying profit for the period of €49 million ($51.9 million) in Q4 2016, which had almost doubled from the same period a year earlier. The increase was mainly due to higher operating income. The underlying profit was €5 million below the level of Q3 2016. ABN AMRO said client assets at the private bank increased to €204.9 billion at 31 December 2016 due to “positive market performance” in the final three months of 2016. Those total assets included €17.9 billion related to the private banking portfolio in Asia and the Middle East (held for sale). Net new assets in Q4 2016 amounted to €200 million.

Besides organic growth, the firm is open to mergers and acquisitions in certain conditions, Rijpkema said. “It should be done if it strengthens us in markets such as Belgium, France and Germany. We are looking at additional private banker opportunities,” he said, but did not elaborate. (He spoke ahead of the bank’s full-year results, which came out this week.)

Talk of M&A brings up the move by the Netherlands-headquartered firm to sell its Asia and Middle East private banking operations to Liechtenstein’s LGT Group late last year, a move that follows those of other European banks that have cut Asian operations because of inability to achieve sufficient profitable scale. (Other banks taking this route include Barclays and Societe Generale.) ABN AMRO’s private bank in Asia had assets of around $20 billion, Rijpkema said. The decision was taken to make the move because the bank was not at critical mass in terms of assets, he said. ABN AMRO’s private banking activities in Asia and the Middle East are overall a profitable franchise. “Not all banks can state that,” he said.

With developments such as the regulatory projects of MiFID II coming from the European Union and a need to absorb such costly changes, it makes more sense for the bank to focus its attention in Europe, Rijpkema said. One area he flagged up is the development of a fund selection capability for clients, leveraging the fund selection capabilities of its Paris-based subsidiary to clients across various countries in Europe. “It exemplifies the pursuit to leverage capabilities across borders to the benefit of all our clients,” he said.

Recent client satisfaction surveys have told the bank’s managers that the firm is going in the right direction, Rijpkema continued. “We see good direction and we’re attracting new clients.”


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