Financial Results

Private Banking Profits Surge At ABN AMRO; AuM Rises, Helped By German Acquisition

Tom Burroughes Group Editor London 14 November 2014

Private Banking Profits Surge At ABN AMRO; AuM Rises, Helped By German Acquisition

The private banking arm of the Netherlands-headquartered group reported strong profit gains and a rise in AuM in the third quarter.

Netherlands-headquartered ABN AMRO today said its private banking arm delivered a reported profit of €50 million ($62.2 million) in the third quarter of 2014, surging 45 per cent year-on-year, driven by improved operating results and fewer loan impairments.

The quarterly figure means that for the first nine months of the year, the total profit on the same basis was €145 million, an 89 per cent rise on the same period in 2013, it said in a statement today.

The banking group is currently part-owed by the Dutch government, following a rescue in the aftermath of the 2008 financial crisis; the public authorities are preparing to sell off the stake and return the bank into complete private ownership although an IPO date has yet to be announced.

Net interest income amounted to €149 million, up by 9 per cent compared with Q3 2013. This increase was largely driven by higher volume and improved margins on deposits in the Netherlands. Margins in the international activities improved as well.

Net fee and commission income grew by 5 per cent to €138 million in Q3 2014. Net fees for the international activities increased due to higher assets under management, while net fees in the Netherlands were fairly stable.

The number of FTEs increased by 144 compared to 30 June 2014 due mainly to the acquisition of the private banking activities of Credit Suisse in Germany, which was finalised at 31 August 2014. (To see an interview about this German banking operation of ABN AMRO, click here.)

Assets under management grew by €11.1 billion in the third quarter of 2014 to €187.5 billion, of which €8.2 billion was related to the acqusition of the private banking activities from Credit Suisse in Germany. The remaining increase was due to net new assets inflow, it said.

Group results
For the banking group as a whole, the reported profit for the third quarter was €450 million, a 56 per cent year-on-year rise.

The bank noted that it recently managed to “comfortably” pass the stress tests on European banks as set by the eurozone bloc’s banking regulators.

“Overall, we are pleased with the Q3 results and remain cautiously optimistic about the recovery of the Dutch economy. Consumer spending and domestic investments are expected to increase further in combination with stronger exports, helped by a lower euro, declining lending rates and lower oil prices,” Gerrit Zalm, the group’s chairman, said in the statement.

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