ABN AMRO reports net profit of EUR 693 million for Q2 2019
ABN AMRO reports net profit of EUR 693 million for Q2 2019
– Net profit for the second quarter strong at EUR 693 million, reflecting solid operational performance and moderate impairments- Cost/income ratio for the first half year was 59.9%, return on equity 11.4%- Result included a EUR 114 million provision (pre-tax) for a customer due diligence remediation programme at Retail Banking- Strong capital position with a CET1 ratio of 18.0%, excluding half-year profit- Interim dividend has been set at EUR 0.60 per share, 50% of half-year profit- We remain focused on our targets in a challenging environment
Kees van Dijkhuizen, CEO, comments:‘We are making good progress in further embedding our strategy, which has a key focus on sustainability. We were therefore very pleased that ABN AMRO was named Western Europe’s Best Bank for Sustainable Finance by Euromoney. In the second quarter, our mortgage market share improved to 17% from 14% while maintaining pricing discipline. We expect the improvement in our market share to continue in the next quarter.
We posted a strong net profit of EUR 693 million, reflecting higher net interest income, some one-offs including the sale of Stater and a provision for a customer due diligence (CDD) remediation programme at Retail Banking, and moderate impairments. Return on equity for the quarter was 13.6%; if regulatory levies were to be divided equally over the year, return on equity would have been 12.5%.
We welcome the plans of the Dutch government to jointly combat financial crime and achieve broader cooperation between banks, law enforcement and regulators on both a national and European level. After our announcement at Q4 on detecting financial crime, we centralised and bolstered our CDD activities. More than 1,000 people are currently fully committed to this, and this number will increase substantially in the next few years. Recently, the Dutch central bank (DNB) determined that we are to review all our retail clients in the Netherlands. Consequently, we will undertake further measures and extend our CDD remediation programme, for which we have made an additional provision of EUR 114 million. In general, across the bank we will take all remedial actions necessary to ensure full compliance with legislation. Sanctions, such as an instruction, fines, may be imposed by the authorities.
The regulator is focusing on capital regulation and we expect further regulatory impact going forward. Our capital management reflects the current economic and regulatory outlook as well as our approach to sustainable dividends. Our capital position remains strong. The Basel IV CET1 ratio remained largely unchanged compared with year-end 2018, excluding the half-year profit for 2019. The interim dividend has been set at EUR 0.60 per share, a pay-out of 50% of half-year profit, which is in line with last year. We are within the capital target range and expect to be well placed to consider additional distributions of above 50% of profit at year-end.
Interest rates continued to come down in the last quarter, predominantly impacting deposit margins. We are taking action by focusing on margins, developing revenue opportunities and strict cost discipline. We remain focused on our targets in a challenging environment.’
ABN AMRO reports net profit of EUR 2,325 million for FY 2018
ABN AMRO reports net profit of EUR 2,325 million for FY 2018
Q4 2018 net profit of EUR 316 million; solid operational performance in Q4 This result includes EUR 85 million (pre-tax) for additional costs of accelerating Customer Due Diligence remediation programmes and elevated loan impairments Return on equity for FY 2018 was 11.4% Cost/income ratio for FY 2018 improved to 58.8% (FY 2017: 60.1%); on track to meeting the 56-58% target by 2020 Strong Basel III capital position, with CET1 ratio at 18.4% and leverage ratio at 4.2% Reconfirmation of targets and guidance given at Investor DayProposed final dividend of EUR 0.80 per share. FY 2018 dividend proposal of EUR 1.45 per share (FY 2017: EUR 1.45)Kees van Dijkhuizen, CEO, comments:
‘In Q4 2018, our net profit was EUR 316 million. We saw solid operational delivery in Q4 2018. However, net profit was impacted by additional costs of accelerating Customer Due Diligence (CDD) remediation programmes and by elevated loan impairments in specific sectors. The full-year 2018 net profit was good at EUR 2.3 billion. We are on track to meeting our financial targets for 2020 and reconfirm the targets and guidance given at our Investor Day, despite a somewhat weaker economic outlook. Our capital position strengthened further. We therefore propose paying an additional amount of dividend on top of the targeted 50% of sustainable profit. A final dividend of EUR 0.80 per share will be proposed, bringing the proposed total dividend for 2018 to EUR 1.45 per share.
At our first Investor Day last November, we introduced our new purpose and refreshed strategy. As reflected in our purpose ‘Banking for better, for generations to come’, we want to make a positive impact by deploying our capabilities and talents. This is also demonstrated by several customer care programmes, for example reaching out to clients with interest-only mortgages to discuss potential financial issues upon expiration of their loans and supporting senior clients in handling their banking affairs. In our daily activities, we must remain vigilant in detecting financial crime. We are therefore accelerating our CDD remediation programmes at Commercial Banking and ICS (Retail Banking).
Throughout the year, we continued to focus on making banking more convenient for our clients. We were the first bank in the Netherlands to offer contactless payments through passive wearables, and online retailers can now offer their customers the option of paying through Tikkie. In addition to the partnerships with Social Finance and Opportunity Network, which we started in 2018, we recently announced that we have teamed up with a partner to develop accounting software which is fully integrated into online banking for SMEs.’