ABN AMRO's Q2 Profit Drops

Tom Burroughes Group Editor London 8 August 2018

ABN AMRO's Q2 Profit Drops

The banking group reported a profit drop in the second three months of this year from a year earlier.

ABN AMRO, the Netherlands-headquartered bank, reported a 28 per cent year-on-year fall in profit for the second quarter of this year at €688 million ($799 million), with last year’s quarter affected by proceeds by the divestment of its Asian private bank.

Operating income fell 8 per cent at €2.288 billion in the second quarter, while its cost/income ratio widened a touch to 55.1 per cent from 54.9 per cent, it said in a statement. Return on average equity shrank to 13.5 per cent 20 per cent.

At the end of June, the lender’s fully loaded CET1 ratio, a common measure of a bank’s capital buffer, was 18.3 per cent, it said.

Delving into details of the results, the bank said that while its corporate and institutional bank side had achieved adequate returns through the economic cycle, it had not meet group return on equity targets, so ABN AMRO will cut capital allocated to global sectors, and reduce risk-weighted assets – off-balance sheet exposures - by €5 billion by the end of 2020, to around €24 billion.

A few days previously, ABN AMRO bought Societe Generale’s Belgian private banking arm. The deal will approximately double its Belgian private banking assets to €12 billion.

Last year the bank sold its Asian private bank to Liechtenstein-headquartered LGT.

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