ABN AMRO reports net loss of EUR 5 million for Q2 2020
August 12 2020 - 1:00AM
ABN AMRO reports net loss of EUR 5 million for Q2 2020
ABN AMRO reports net loss of EUR 5 million for Q2
2020
Breakeven net result (EUR 5 million negative)
reflects high impairments
- Continued engagement with clients to support them
through Covid-19
- Good operational performance; net interest income under
pressure from low interest rates
- Costs continue to benefit from cost-saving
programmes
- Robust capital position, with a CET1 ratio of 17.3%
(Basel III) and around 14% (Basel IV)
- Bank to focus on Netherlands and Northwest
Europe
- Significant risk reduction in global sectors is
expected to be capital accretive over time
Robert Swaak, CEO, comments:
‘When I started as CEO of ABN AMRO I set four priorities:
navigate the bank through the Covid-19 crisis, review the strategy,
focus on our licence to operate, and further enhance the bank’s
culture. We have made progress in all areas, including the strategy
review. We will serve clients in segments where we can achieve
scale, so we will focus on the Netherlands and Northwest Europe,
where we will invest and grow. This is also reflected in the
outcome of the CIB review announced today.
Going forward Corporate & Institutional Banking (CIB) will
focus on clients in Northwest Europe and Clearing and will exit all
non-European corporate banking activities. Trade & Commodity
Finance activities will be discontinued completely, and Natural
Resources and Transportation & Logistics will focus on European
clients only. In addition, stricter lending criteria and credit
limits have been set to also contribute to a moderate risk profile.
CIB will be split into core and non-core activities. The non-core
activities (around 45% of CIB’s client loans, representing
approximately 35% of CIB’s RWA and over 10% of total RWA) are
expected to be wound down in the next 3 to 4 years. Around 800 FTEs
are currently dedicated to non-core activities. The winddown, which
is subject to regulatory approval, is expected to be capital
accretive over time.
Even though in the Netherlands the impact of the soft lockdown
on the economy was less severe than in many countries, Covid-19 has
had a significant impact on our financial performance and we are
reporting an around breakeven net result (EUR 5 million negative)
for the second quarter. Operational performance was good despite
continued pressure on net interest income. Costs were lower,
benefiting from continued cost management. Impairments were high
again, due to an exceptional client file, Covid-19 and oil prices.
The resilience of our operating performance will not fully offset
expected impairments for full-year 2020. ROE was a disappointing
-0.7% and the cost/income ratio was 60.4%. Our financial position
remains strong, with a CET1 ratio of 17.3% under Basel III, around
14% under Basel IV, comfortably above the regulatory minimum
requirement.
Our purpose, ‘Banking for better, for generations to come’
guides us in delivering on our strategy. In addition to our
decision to focus on Northwest Europe, we have defined strategic
principles relating to clients, digital, moderate risk and
financial ambitions. This will lead us in making clear choices, on
which we will provide an update in November, also addressing
operational efficiency, financial targets and capital.
Key figures and indicators (in EUR
millions) |
Q2 2020 |
Q2 2019 |
Change |
Q1 2020 |
Change |
H1 2020 |
H1 2019 |
Change |
Operating
income |
1,985 |
2,321 |
-15% |
1,924 |
3% |
3,909 |
4,403 |
-11% |
Operating expenses |
1,198 |
1,310 |
-8% |
1,300 |
-8% |
2,499 |
2,636 |
-5% |
Operating result |
786 |
1,012 |
-22% |
624 |
26% |
1,410 |
1,766 |
-20% |
Impairment
charges on financial instruments |
703 |
129 |
|
1,111 |
-37% |
1,814 |
231 |
|
Income tax expenses |
88 |
190 |
-54% |
-92 |
|
-4 |
363 |
|
Profit/(loss) for the period |
-5 |
693 |
|
-395 |
|
-400 |
1,172 |
|
|
|
|
|
|
|
|
|
|
Cost/income
ratio |
60.4% |
56.4% |
|
67.6% |
|
63.9% |
59.9% |
|
Return on
average Equity1 |
-0.7% |
13.6% |
|
-8.7% |
|
-4.7%% |
11.4% |
|
Fully-loaded
CET1 ratio |
17.3% |
18.0% |
|
17.3% |
|
17.3% |
18.0% |
|
1 Based on profit for the period attributable to the owners
of the parent company |
|
ABN AMRO
Press OfficeJarco de SwartSenior Press
Officerpressrelations@nl.abnamro.com+31 20 6288900 |
ABN AMRO
Investor RelationsDies Donker Head 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)
- 20200812 - ABN AMRO press release_Q2 2020
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