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Regulatory levies hurt ABN AMRO Q1 profit

reportedfirst-quarter IFRS profit attributable to owners of the company of €474million, down from €543 million in the year-ago period.

UnderlyingEPS was 49 cents, compared to 58 cents a year earlier.

Thebank said the result included regulatory levies of €74 million, net of tax, forthe Dutch Single Resolution Fund and the Deposit Guarantee Scheme. The expected total charge for the Deposit Guarantee Schemein 2016 is €89 million, of which €21 million was booked in the firstquarter. The Dutch bank tax of about €100 million will be recorded entirely inthe fourth quarter, the bank said.

Netinterest income stayed flat year over year at €1.55 billion. Net fee andcommission income declined on a yearly basis to €435 million from €470 million,mainly related to volatility in the financial markets during the first twomonths, which negatively impacted all business lines except for Clearing.

Thefirst-quarter underlying net interest margin was 151 basis points, compared to148 basis points a year earlier. The underlying cost of risk was nil, comparedto 38 basis points in the first three months of 2015.

Impairmentcharges on loans and other receivables dropped on a yearly basis to €2 millionfrom €252 million due to the continued improvement of economic conditions inthe Netherlands. The bank also noted that the IBNI release of €81 millionduring the first quarter, compared to a release of €31 million a year earlier,also helped lower impairment levels.

Thegroup booked a net trading loss of €16 million, compared to a net tradingincome of €64 million in the first quarter of 2015.

Thebank's first-quarter underlying ROE decreased year over year to 11.1% from14.1%.

Asof March 31, the fully loaded common equity Tier 1 ratio stood at 15.8%,compared to 15.5% at the 2015-end. The bank is targeting a fully loadedCET1 ratio of 11.5% to 13.5% under a Basel IV regime.

Thefully loaded CDR leverage ratio was 3.7% at the end of March, compared to 3.8%at the end of 2015.

ABNAMRO said it intends to increase its dividend payout ratio to 45% for 2016 and50% for 2017, subject to, among other things, regulatory capital requirements,including Basel IV.

Managingboard Chairman Gerrit Zalm said the company needs to make itself "more agile,efficient and cost-effective."He said ABN is looking into additional cost savings to improve operational efficiency and alsoto furtherinvest in digitization.

"In the second half of 2016, we expect to announce more specific plans on how wewill update ourstrategy and financial targets up to 2020," said Zalm.