ABN AMRO was hit by impairment charges of €314m in the reported quarter


ABN AMRO says its Q4 2019 net profit impacted by low interest rates and high impairments. (Credit: ABN AMRO Bank N.V.)

ABN AMRO has reported a net profit after tax of €316m for the fourth quarter of 2019, which is the same figure that it had made in the fourth quarter in 2018.

The earnings per share remained stable at €0.31.

However, the Q4 2019 net profit was 43% less than the €558m reported in Q3 2019 in which the earnings per share were €0.57.

The Dutch banking group said that its net profit in the reported quarter was stable compared to Q4 2018 in spite of facing high impairments, slightly lower operating income, and the impact of various incidentals.

The Dutch bank was hit by impairment charges of €314m in the reported quarter, a 51% increase from the figure of €208m registered in the same quarter in the year before.

ABN AMRO’s net profit was affected by incidentals such as execution of a collective labour agreement, restructuring provisions, and provision for customer diligence programme.

The operating income for the bank was down by 3% to €2.10bn compared to €2.15bn earned in Q4 2018.

The bank’s net interest income decreased by €56m to €1.58bn in Q4 2019 compared to the same quarter the year before due to continued pressure on deposit margins and also modestly lower volumes.

ABN AMRO managed to bring down its operating expenses in the fourth quarter of 2019 by 9% to €1.38bn compared to €1.51bn reported in Q4 2018.

The retail banking unit had a 10% drop to its Q4 2019 net income at €676m, while the profit after tax fell 36% to €134m, in comparison to the same quarter the year before.

ABN AMRO’s commercial banking business had a 6% decrease in its Q4 2019 net income at €370m, while there was a 92% surge in profit after tax at €72m, compared to Q4 2018.

The corporate and institutional banking (CIB) unit saw the Q4 2019 net income reduced by €8m to €301m compared to Q4 2018. There was a loss of €4m in Q4 2019 compared to the €65m profit after tax reported in the same quarter in the year before.

ABN AMRO FY2019 net profit down by 12%

For the full year 2019, ABN AMRO made a net profit of €2.04bn, which was 12% less than the €2.31bn it reported for the full year 2018. The net interest income for FY 2019 was down by 2% at €6.46bn compared to the figure of €6.6bn reported for FY2018.

ABN AMRO CEO Kees van Dijkhuizen said: “In the past year, we continued to focus on diligent execution of our strategy. At Private Banking, the volume of client assets invested sustainably more than doubled to EUR 19 billion, one year ahead of our target.

“We strengthened our lead in video banking at Retail Banking and have extended this service to all businesses. Florius’ clients can now increase their mortgages without having to submit documents, provided they give us permission to use source data – simplifying and digitalising the mortgage application process.”