Reports
ABN AMRO’s Private Banking Profit Soars YoY, Bank To Cut 1,500 Jobs
ABN AMRO, which is reported to be looking to sell its Asian private bank and trim its workforce, almost doubled its private banking profit in the third quarter.
ABN AMRO, which is reported to be weighing a sale of its Asian private bank, has said private banking underlying profit jumped 92 per cent year-on-year to €54 million ($58 million) in the third quarter of 2016. The Dutch bank also said a further 1,500 jobs are at risk as part of its ongoing cost-cutting drive.
The increase was due largely to a 10 per cent decline in expenses and slightly higher operating income, at €317 million. The unit’s client assets totalled €198.9 million at 30 September 2016, up 3 per cent from the end of June, largely thanks to favourable market performance.
For the first nine months of 2016, however, private banking underlying profit fell 20 per cent year-on-year to €150 million, due to lower operating income and higher loan impairments.
The bank as a whole generated a quarterly profit of €607 million, up 19 per cent from a year earlier. Its common equity tier one ratio, a measure of financial strength, increased to 16.6 per cent.
ABN AMRO announced a new cost savings plan of €400 million, affecting another 1,500 full-time jobs. It did not specify which divisions are at risk. The plan comes on top of the €200 million of savings in support and control activities announced earlier this year. The bank is targeting total cost savings of €900 million by 2020 to offset rising costs and levies of €500 million, and to finance a €400 million increase in spending on initiatives for growth, innovation and digitalisation. It has also sharpened its cost/income target range from 56-60 per cent by 2017 to 56-58 per cent by 2020.
The Amsterdam-headquartered bank, which is still majority owned by the Dutch government, last week appointed its chief financial officer, Kees van Dijkhuizen, to replace Gerrit Zalm as chief executive.
Separately, a number of banks are said to be considering a bid for the Asian private banking arm of the firm; ABN AMRO has declined to comment on the matter. For more on this issue, click here.
