Profits Bounce At ABN AMRO Amid Shift In Impairments

Tom Burroughes Group Editor 11 August 2021

Profits Bounce At ABN AMRO Amid Shift In Impairments

The bank's results continued an industry trend of impairments last year changing to net releases in 2021 as lenders adjusted for the pandemic's impact on business.

ABN AMRO, the Netherlands-listed bank, has reported a second-quarter profit of €393 million ($460.4 million), bouncing from a loss of €5 million a year ago and loss of €54 million in the first three months of this year.

Operating income dipped in Q2 to €1.732 billion, down 13 per cent year-on-year, while costs rose 2 per cent on a year ago to €1.228 billion. Despite that change, a big shift in impairment charges helped the profit result. Last year, impairment charges on financial instruments were €703 million, swinging to a net release of €79 million in Q2. Many other major banks worldwide have reported such a change as the pandemic situation appeared to have eased from last year.

The bank said that its fully-loaded Common Equity Tier 1 ratio – a standard international measure of capital strength – was 18.3 per cent in Q2, up from 17.3 per cent a year earlier.

"Society is gradually opening up as vaccination programmes across Europe are steadily progressing and restrictions are easing. Extensive government support measures have enabled the Dutch economy to hold up relatively well. As a result of the improved macroeconomic outlook, we again saw a release of impairments in the second quarter. Demand for corporate loans in the Netherlands is still muted as strong government support continues, but it is showing signs of stabilising and the pipeline is improving,” Robert Swaak, CEO of the bank, said.

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