Reports

Underlying Net Profit Rises At ABN AMRO

Tom Burroughes Group Editor London 15 February 2017

Underlying Net Profit Rises At ABN AMRO

The European lender, which last year sold its Asia private banking operation, reported stronger profits for 2016.

(Updates with private banking figures)

ABN AMRO, the Netherlands-headquartered lender that sold its Asia-based private banking business last year, today reported an underlying net profit in the fourth quarter of 2016 of €333 million ($352 million), a 23 per cent year-on-year rise.

For the entire year, net profit was €2.076 billion, up 8 per cent from a year earlier.

The bank announced restructuring moves in the second half of last year to cut its cost-income ratio. Return on equity was 11.8 per cent and the bank’s capital position was bolstered, it said in a statement. At the end of last year, the cost/income ratio of the bank was 65.9 per cent, against 61.8 per cent in 2015.

At the private banking arm, the lender said underlying profit for the period almost doubled to €49 million in Q4 2016. 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 a “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.

 

In February, ABN AMRO said it is scaling back its roster of senior management roles and reducing its number of top executives by more than half to address “substantial changes” taking place in the bank. (To see the changes, click here.)

In December 2016, Liechtenstein-headquartered LGT agreed to buy the firm's private banking businesses in Hong Kong, Singapore and Dubai (see here).

The bank is working towards a return to full private ownership. As at the end of November last year, the bank said the Dutch government, via its NLFI organisation, owned 70 per cent of the bank, with the remainder held by private investors. The bank was bailed out by the government in the 2008 financial crisis.

 

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