Impairments Bite ABN AMRO's Full-Year 2020 Results

Tom Burroughes Group Editor London 10 February 2021

Impairments Bite ABN AMRO's Full-Year 2020 Results

The bank, as well as reporting Q4 and full-year 2020 figures, said it intends to appoint a new CFO, subject to regulatory clearances.

ABN AMRO today reported a €54 million ($65.5 million) profit for the fourth quarter of 2020, and a loss of €45 million for all of last year. In 2019, the Netherlands-based group, which provides private banking as part of its offerings, logged a Q4 profit of €316 million and a full-year profit of €2.046 billion.

Impairment charges on financial instruments – linked to the expected effects of the COVID-19 pandemic – surged in 2020, reaching €2.303 billion, up from €657 million a year earlier. In Q4, such impairments fell, however, to €220 million from €314 million a year earlier.

Operating income slipped to €7.916 billion in 2020 from €8.605 billion a year earlier, the bank said in a statement.

In Q4, the bank’s cost/income ratio widened to 77.8 per cent from 65.9 per cent a year before.

At the end of last year, ABN AMRO’s Common Equity Tier 1 ratio – a standard measure of a bank’s capital strength – was 17.7 per cent, falling a touch from a year ago.

“The Dutch economy and housing market remain resilient, as the government’s effective support programmes continue. We expect that the roll-out of the vaccination programme will facilitate a significant lifting of restrictions in Q2, rapidly leading to a strong economic rebound in the second half of the year. We expect lower impairment levels than in 2020. The bank continues to operate from a position of strength, with a distinct profile, clear strategic focus and a very strong capital position. We are cautiously optimistic about the prospects for the bank as we execute on our strategy,” Robert Swaak, chief executive, said. 

Separately, ABN AMRO said it intends to appoint Lars Kramer as a member of the executive board and chief financial officer. The nomination is subject to the approval of the European Central Bank (ECB). Until Kramer’s appointment, and after Clifford Abrahams steps down on 28 February, Annemieke Roest will serve as acting CFO (subject to regulatory approval).

Kramer is a member of the managing board and the CFO of Hellenic Bank. Prior to joining Hellenic Bank in 2017, Kramer was employed for more than 20 years at ING as CFO, as well as at ING Wholesale Banking and ING Direct NV.

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