ABN AMRO reports net profit of EUR 743 million in third quarter of 2022
November 09 2022 - 1:00AM
ABN AMRO reports net profit of EUR 743 million in third quarter of
2022
ABN AMRO reports net profit of EUR 743 million in third
quarter of 2022
- Good quarter with a net profit of EUR 743 million
reflecting a strong recovery in deposit margins supported by a book
profit on disposals and low impairments
- Continued growth in mortgage and corporate loan books.
Market leader in mortgages, with a market share of 19.1% in
Q3
- Net interest income (NII) has bottomed out as deposit
margins are benefiting from higher interest rates; outlook for the
year has improved and NII is expected to be around EUR 5.3 billion
for the full year (excluding incidentals)
- Underlying costs were 2% lower than in Q2; we expect
full-year costs to be around EUR 5.3 billion, excluding incidentals
and additional costs for the new CLA
- Impairments were EUR 7 million as the deteriorating
macroeconomic outlook was offset by releases on non-performing
loans. Prudent buffers remain in
place
- Our capital position remains strong, with a
fully-loaded Basel III CET1 ratio of 15.2% and a Basel IV CET1
ratio of around 16%. Risk-weighted assets
increased by EUR 4.3 billion
- Uncertainty about economic developments remains high,
but we are well positioned and will continue to support our clients
in these challenging times
Robert Swaak, CEO:
‘The third quarter was again dominated by global events. The war
in Ukraine has led to one of the largest humanitarian crises in
decades, of which the long-term consequences are still difficult to
assess. After a strong post-Covid recovery in the Netherlands,
economic growth is starting to slow down due to high inflation,
especially owing to the sharp rise in energy prices, combined with
higher interest rates. The Dutch economy has strong fundamentals
and the government is stepping in with support packages to ease the
purchasing power shock. Uncertainty about economic developments
remains high and we expect an economic slowdown. Although we are
concerned about the outlook, we are well positioned to weather this
environment and will continue to support our clients in these
challenging times.
We maintained strong momentum in the third quarter as our
mortgage and corporate loan books continued to grow. Our market
share in mortgages improved further to 19.1% in Q3 and we remained
the market leader in the Netherlands. We still face pressure on
margins for mortgages and corporate loans due to a delay in passing
on higher funding costs to clients.
In the third quarter, we delivered a good quarterly result, with
a net profit of EUR 743 million and an ROE of 13.9%, supported by a
book profit on disposals and low impairments. NII, excluding
incidentals, has bottomed out as deposit margins continued to
improve in the higher interest rate environment. We now expect NII
to be around EUR 5.3 billion for the full year (excluding
incidentals). Fee income increased by 7% compared with Q3 2021,
driven by higher payment volumes, pricing and strong results at
Clearing. Net new assets at Wealth Management, excluding custody
assets, increased by EUR 1 billion. Costs in the third quarter came
down by 2% (excluding incidentals and regulatory levies) compared
with Q2 due to lower staff costs. We expect full-year costs to be
around EUR 5.3 billion, excluding incidentals and additional costs
for the new CLA.
Against the backdrop of uncertainty and volatile markets, we
continue to focus on risk management. Credit quality remains good
and impairments were EUR 7 million for the quarter as the
deteriorating macroeconomic outlook was offset by releases of
non-performing loans. We continue to monitor second-order impacts
on our clients caused by the war in Ukraine, including
energy-intensive sectors, and prudent buffers remain in place.
Risk-weighted assets increased by EUR 4.3 billion, mainly due to an
adjustment in the application of the SME support factor and changes
in the regulatory approach to models. Our capital position remains
strong, with a fully-loaded Basel III CET1 ratio of 15.2% and a
Basel IV CET1 ratio of around 16%. We are making progress in our
AML remediation programmes, but ongoing effort is required to
complete the programmes before the end of 2023.
We continue to deliver on our strategy to improve our
performance and meet our bank-wide strategic targets. The three
pillars of our strategy – customer experience, sustainability and
future-proof bank – will drive profitable growth while we increase
operational and capital efficiency. We took our customer experience
a step further as we are continually developing new propositions
for our clients both within our own digital channels and embedded
in third-party digital channels. ID & pay is an embedded
banking innovation that simplifies the onboarding and payment
process for clients such as online brokers and shared mobility
services. This app provides a single digital identification and
payment functionality within the bank's secure environment. We are
currently piloting the app with Swapfiets, a 'bicycle as a service'
company. Meanwhile Tikkie, serving some eight million users in the
Netherlands, introduced a new feature called Groepie, which allows
multiple users to track and settle costs incurred as a group.
As we further integrate sustainability into the core of our
business, we recently financed a housing development project with
sustainable and affordable homes to help meet demand, as the
housing shortage in the Netherlands remains severe. Our mortgage
label Florius now offers senior clients financing solutions for
intergenerational and informal caregiver homes, supporting their
mobility in the housing market and enabling future-proof living.
Next month, we will present our climate strategy as we take the
next step in our climate journey. We will present intermediate
targets for 2030 for five carbon-intensive sectors as well as for
our client assets portfolio and we will provide a clear roadmap for
further target setting. Our climate journey ahead will depend on
many factors including regulation, technological developments and
global events. In our climate strategy, we will provide a compass
on how we make decisions going forward.
We are building a future-proof bank. The digital customer
experience is the main reason for many clients to recommend
our bank, and I am pleased that the third-quarter NPS for both
consumer and corporate clients improved compared with Q2, with
clients praising the functionalities of the ABN AMRO app and
Internet Banking. To strengthen the focus on mobile banking,
the key features of Grip, our personal finance management app, will
be integrated into the ABN AMRO app, giving all users direct
insight into their personal finances. Meanwhile, vulnerable clients
who have difficulty keeping pace with technology can now attend
special walk-in clinics at libraries throughout the Netherlands.
The clinics are run by retired ABN AMRO staff on a volunteer
basis.
Last month, we announced the departure of our Chief Human
Resources Officer Gerard Penning. We are grateful for his
dedication and hard work in recent years. Meanwhile, I am very much
looking forward to the arrival of Carsten Bittner as our new Chief
Innovation & Technology Officer. He will be central to ABN
AMRO’s strategy of becoming a personal bank in the digital age.
I would like to extend my gratitude to all my colleagues for
their strong commitment and drive, and I am pleased we have reached
a new collective labour agreement. We will continue to focus on
being the preferred partner for our clients, especially in these
challenging times, and would like to thank them for placing their
trust in us.
Key figures and indicators (in EUR
millions) |
Q3 2022 |
Q3 2021 |
Change |
Q2 2022 |
Change |
Operating
income |
2,162 |
1,734 |
25% |
1,884 |
15% |
Operating expenses |
1,254 |
1,301 |
-4% |
1,321 |
-5% |
Operating result |
908 |
432 |
110% |
563 |
61% |
Impairment
charges on financial instruments |
7 |
-12 |
|
-62 |
|
Income tax expenses |
159 |
102 |
56% |
151 |
5% |
Profit/(loss) for the period |
743 |
343 |
117% |
475 |
56% |
|
|
|
|
|
|
Cost/income
ratio |
58.0% |
75.1% |
|
70.1% |
|
Return on
average Equity |
13.9% |
6.5% |
|
8.8% |
|
CET1
ratio |
15.2% |
17.8% |
|
15.5% |
|
ABN AMRO
Press OfficeJarco de Swart Senior Press
Officerpressrelations@nl.abnamro.com+31 20 6288900 |
ABN AMRO
Investor RelationsFerdinand VaandragerHead 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 Bank Quarterly Report third quarter 2022
- 20221109 ABN AMRO reports net profit of EUR 743 million in
third quarter of 2022
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