Third-Quarter Rises At ABN AMRO

Tom Burroughes

6 January 2024

, the Netherlands-headquartered bank that provides services including private banking, today said it logged a 2 per cent year-on-year rise in profit for the third quarter of 2023, standing at €759 million ($810.7 million).

The bank achieved the result on a 2 per cent rise in operating income of €2.211 billion; operating costs fell 2 per cent to €1.228 billion.

The lender said income tax costs surged 55 per cent to €246 million.

ABN AMRO’s cost/income ratio narrowed to 55.5 per cent in Q2 2023 from 58 per cent a year earlier. Return on average equity slipped to 13.6 per cent from 13.9 per cent. Its Common Equity Tier 1 ratio – a standard measure of a bank’s capital buffer from shocks – was 15 per cent, down from 15.2 per cent.

The bank said it had €21 million of impairment releases in Q3, against impairments of €7 million a year before.

'In the third quarter, we once again delivered a strong financial result with continued high net interest income (NII) compared with last year, supported by high other income and impairment releases,” Robert Swaak, chief executive, said. “The Dutch economy is cooling down and uncertainty about the economy and inflation remains, while I continue to be concerned about the ongoing uncertainty in the geopolitical environment. Slowing economic growth contrasts with our strong business momentum. Demand for credit remains good and both our mortgage and corporate loan books increased. Our market share in mortgages increased to 15 per cent, while house prices are rising due to improved affordability.”

“NII was 20 per cent higher than last year. Compared with the previous quarter, NII was affected by deposit migration to higher yielding products, a shift to other income, limited asset margin pressure and lower results in trading activities. Costs were higher than in Q2, mainly due to regulatory levies. We now expect lower full-year costs for 2023, between €5.1 and €5.2 billion, due to good cost control and a delay in investments mainly given the tight labour market,” Swaak said.