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Sale of private banking biz positively impacts ABN AMRO Q2 profit

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Sale of private banking biz positively impacts ABN AMRO Q2 profit

ABN AMRO Group NV reported second-quarter profit attributable to owners of the company of €938 million, up from €380 million earned in the year-ago period.

The result was positively impacted by a book gain of €200 million on the sale of the Dutch lender's private banking business in Singapore, Hong Kong and Dubai and refinements of two risk models.

The underlying net profit for the period was €960 million, compared to €662 million a year earlier. Underlying EPS for the period was €1, compared to 69 cents a year earlier.

Second-quarter underlying return on average equity was 20.0%, compared to 15.1% a year earlier.

Net interest income for the quarter totaled €1.60 billion, compared to €1.58 billion a year ago, on the back of continued loan growth in corporate loans and mortgages. Net fee and commission income amounted to €418 million, down from €431 million in the second quarter of 2016.

Impairment charges on loans and other receivables amounted to a release of €96 million, compared to charges of €54 million a year ago. ABN AMRO noted that the releases were the result of "broad improvements in the Dutch economy, model refinements (mortgages and corporate loans) and rising housing prices."

First-half attributable profit increased to €1.54 billion from the year-ago €843 million. Underlying first-half profit amounted to €1.58 billion, or €1.64 per share, compared to €1.14 billion, or €1.19 per share, a year ago.

The group's fully loaded common equity Tier 1 ratio as of June-end stood at 17.6%, compared to 16.9% at March-end and 17.0% at the end of 2016. The fully loaded CDR leverage ratio at the end of June was 3.9%, compared to 3.7% at March 31, and unchanged from 2016-end.

CEO Kees van Dijkhuizen said the group is still expecting an agreement on Basel IV, however if no agreement is reached in 2017, it will present an updated view on its capital position in the first quarter of 2018.

ABN AMRO added that for the first six months of 2017 it intends to pay an interim dividend of 65 cents per share, equal to €611 million. The lender noted it is targeting a dividend payout ratio over 2017 of 50% of the reported net profit.