Strong First Half at ABN Amro Private Clients

Nick Parmee

30 July 2007

The private clients business unit at ABN Amro played a full part in a good performance by the Dutch giant in conditions of corporate uncertainty, according to the company's half year results statement. From 1 January 2007 the results include those of Vermogensgroep, the acquisition of which was completed in November 2006. In the second quarter of 2007, the bank completed the sale of its Latin American private banking operations in Miami and Uruguay, including the Latin American portfolios in Switzerland and Luxembourg. In the first half 2007 compared with first half 2006, total operating income the private client unit increased by 16.9 per cent to €741 million ($1,011 million). Excluding the gain on the sale mentioned above, total operating income increased by 4.7 per cent, mainly driven by an 11.7 per cent increase in net fees and commissions as a result of higher volumes in non-interest related products, such as stocks, investment funds and structured products. These results were partly offset by a 5.8 per cent decrease of net interest income to €242 million, due, the bank says, to pressure on margins as a result of high interest rates, particularly in the special savings account product. There were strong revenue increases in growth markets such as Asia and Brazil as a result of continued investments. The operating result increased by 15.6 per cent to €207 million excluding the sale gain: profit for the period increased 27.3 per cent to €154 million, once more excluding the sale gain. Assets under administration increased from €133 billion at the end of June 2006 to €150 billion at the end of June 2007, mainly reflecting higher net asset values due to improved financial markets, net new assets inflow and the inclusion of Vermogensgroep (€3.6 billion). The sale of the operations in Miami and Uruguay had a negative impact of €2.4 billion. Once more with the sale taken out, the second quarter 2007 compared with first quarter 2007 showed modest rises in the key figures: income up by 3.1 per cent to €337 million and profit up by 2.6 per cent to €78 million.