ABN AMRO reports net loss of EUR 395 million in Q1 2020
May 13 2020 - 1:00AM
ABN AMRO reports net loss of EUR 395 million in Q1 2020
ABN AMRO reports net loss of EUR 395 million in Q1
2020
- Net loss marked by high impairments due to Covid-19,
oil prices and market developments
- Supporting clients in response to Covid-19 crisis;
several measures implemented
- Services maintained through digital offering and video
banking while working from home
- Strong operational performance; net interest income
held up well and fees were up
- Costs were lower, benefiting from continued cost
management
- Strong capital position; CET1 ratio of 17.3% under
Basel III and around 14% under Basel IV
- Review underway to ensure we deliver on our strategic
pillars; update after the summer
- Priorities include navigating Covid-19 crisis, CIB
review and AML activities
Robert Swaak, CEO, comments:
“Covid-19 is first and foremost a crisis of personal health, but
it is also having a significant impact on the economy. In line with
our purpose ‘Banking for better, for generations to come’, we are
supporting our clients wherever possible. Our strategic investments
in IT and digital services in the past years have enabled us to
continue serving clients without interruption. We are in close
dialogue with our clients and have been implementing several
support measures, including automatic deferral of interest and
principal payments.
At the FY 2019 results, we announced a review of Corporate &
Institutional Banking’s (CIB) activities. Although in the past few
years some progress has been made in improving returns, this has
not resulted in the required profitability. Also, the risk profile
of parts of CIB is not fully aligned with that of the bank. The
ongoing CIB review is a short-term priority for me and we will
share the outcome in August.
My priorities in the coming period, in addition to the CIB
review, are to navigate the Covid-19 crisis and to focus on
anti-money laundering activities (AML). In addition, we will review
our strategy to ensure we deliver on our three strategic pillars
going forward and will provide an update after the summer, also
addressing operational efficiency, financial targets and
capital.
Impairments were very high (EUR 1.1 billion) due to two
exceptional client files and significant upfront collective
provisioning for sectors immediately impacted by Covid-19 and oil
prices. As a result, we reported a net loss of EUR 395 million over
the first quarter. Net interest income held up in the current
environment, fees were higher and costs were lower, benefiting from
continued cost management. The resulting ROE was a disappointing
-8.7% and the cost/income ratio was 67.6%. Our capital position
remains strong, with a Basel III CET1 ratio of 17.3% and a Basel IV
CET1 ratio of around 14%, comfortably above the regulatory minimum
requirements.
It is a challenging, yet exciting time to start as the CEO of
ABN AMRO. ABN AMRO is a well-recognised player in Dutch society,
with a strong brand and a solid capital and liquidity position. The
bank has strong fundamentals and the priorities we need to address
are clear. Building on our strategy and strong market positions, I
am determined to deliver results in the years to come.”
Key figures and indicators (in EUR
millions) |
Q1 2020 |
Q1 2019 |
Change |
Q4 2019 |
Change |
Operating
income |
1,924 |
2,081 |
-8% |
2,101 |
-8% |
Operating expenses |
1,300 |
1,327 |
-2% |
1,384 |
-6% |
Operating result |
624 |
754 |
-17% |
717 |
-13% |
Impairment
charges on financial instruments |
1,111 |
102 |
|
314 |
|
Income tax expenses |
-92 |
174 |
|
87 |
|
Profit/(loss) for the period |
-395 |
478 |
|
316 |
|
|
|
|
|
|
|
Cost/income
ratio |
67.6% |
63.8% |
|
65.9% |
|
Return on
average Equity |
-8.7% |
9.2% |
|
6.0% |
|
CET1
ratio |
17.3% |
18.0% |
|
18.1% |
|
ABN AMRO
Press OfficeJarco de Swart Senior press
officerpressrelations@nl.abnamro.com+31 20 6288900 |
ABN AMRO
Investor RelationsDies DonkerHead of Investor Relations
investorrelations@nl.abnamro.com+31 20 6282282 |
This press release is published by ABN AMRO Bank N.V. and
contains inside information within the meaning of article 7 (1) to
(4) of Regulation (EU) No 596/2014 (Market Abuse Regulation)
- ABN AMRO reports net loss of EUR 395 million in Q1 2020
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