Dutch State-Owned Banks See Profits Jump As Loan Losses Fall

Dutch state-owned financial services firms ABN Amro Bank NV and Fortis Bank Netherlands NV Thursday showed a sharp increase in profitability ahead of their merger, which is expected in the third quarter of 2010.

"This is the first time that the results of both ABN Amro Bank and Fortis Bank Nederland have been published at the same time. The transfer of ABN Amro Bank and Fortis Bank Nederland to ABN Amro Group on April 1, 2010 marks the start of a new era for the two banks," Chairman Gerrit Zalm said in a statement.

At ABN Amro Bank, first-quarter net profit doubled to EUR178 million from EUR87 million a year ago. At Fortis Bank Netherlands, net profit amounted to EUR73 million, compared with a EUR6 million loss a year earlier.

The improvements are due to lower loan impairments and higher revenue, the company said. However, it expects higher loan losses in the second quarter of the year.

ABN Amro and Fortis Netherlands were nationalized in 2008 at the height of the credit crunch, as Belgian Fortis Holding collapsed under the weight of buying a large part of the former ABN Amro Holding NV.

ABN Amro Holding was bought in 2007 by a consortium made up of the U.K.'s Royal Bank of Scotland Group PLC (RBS), Fortis Holding and Spain's Banco Santander SA (STD).

-By Robin van Daalen, Dow Jones Newswires; 415-439-6468; robin.vandaalen@dowjones.com

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