Dutch bank ABN Amro has achieved a 17.3% rise in profits in 2004, fueled by good growth in its US, Brazil and Asia business and a significant reduction in provisions.
Net profit for 2004 was E3.71 billion despite an overall revenues fall of 0.3%. The bank said that the drop in revenues was mainly due to a disappointing performance from its US mortgage business. Without the US mortgage business taken into account, revenues increased by 4.6%. ABN was able to offset the revenue decrease by reducing its provisions by 48.7%.
For the fourth quarter, excluding exceptional items, profit rose by 13.1% to E948 million, from E838 million in the corresponding period of the previous year. This was due to increased revenues and a major reduction in provisions.
We achieved very good results in 2004 despite the mixed developments in the markets in which we operate. Even though economic growth was strong in the US, Brazil and Asia, we again witnessed low economic growth in Europe, in particular in the Netherlands, and a greater than expected downturn of the mortgage market in the US, chairman Rijkman Groenink said.
Groenink continued, We grew revenues in every business across the bank except for US mortgages, kept costs under control and benefited from our strong credit skills, which led to much lower provisions. As a consequence, our net profit increased substantially.
While the near-term global economic outlook remains mixed, the strengthening of our capital base and business franchises over the past four years leaves us well positioned to create additional value for our shareholders.