ABN AMRO reports net profit of EUR 475 million in the second quarter 2022
10 August 2022 - 07:00AM
ABN AMRO reports net profit of EUR 475 million in the second
quarter 2022
ABN AMRO reports net profit of EUR
475 million in the
second quarter
2022
- Good quarter, with a net profit of EUR 475 million and
return on equity (ROE) of 8.8%. Continued progress towards our
financial and non-financial targets for 2024
- Continued growth in mortgage and corporate loan books.
Market leader in mortgages with a market share of 17.5% in
Q2
- Deposit margins benefit from higher interest rates; net
interest income (NII) is expected to bottom out in the second half
of this year and to end around EUR 5.2 billion for the full
year
- Fee income increased by 12% compared with Q2 2021,
driven by higher transaction volumes in payments and strong results
at Clearing
- Full-year costs expected to total around EUR 5.3
billion, excluding incidentals, as cost savings are partially
offset by higher investments and regulatory levies
- Impairment release of EUR 62 million, reflecting
continued good credit quality and improvements in non-performing
loans. Cost of risk for H2 2022 expected to remain below the
through-the-cycle cost of risk of 20 basis points. Prudent buffers
in place against uncertainties in economic outlook
- Our capital position remains strong, with a
fully-loaded Basel III CET1 ratio of 15.5% and a Basel IV CET1
ratio of around 16%. Interim dividend has been set at EUR 0.32 per
share
- Approval from the ECB for a EUR 250 million share
buyback, conditional on a potential NLFI sell-down, demonstrating
our commitment to capital return
Robert Swaak, CEO:‘The second quarter continued
to be dominated by the war in Ukraine, first and foremost a
humanitarian tragedy. The war is also causing high inflation and
lower consumer confidence, and in combination with further
lockdowns in China and supply chain disruptions, the economic
outlook has weakened. The weakened outlook is not yet reflected in
economic activity and we delivered a good performance this past
quarter. I am pleased that now the ECB has increased its interest
rate, we can stop charging our clients negative rates on their
savings as from October. In these challenging circumstances, we are
well placed to stand by our clients, while we continue to transform
the bank towards a more client-focused and simplified
organisation.
In the second quarter of 2022, we delivered a net profit of EUR
475 million and an ROE of 8.8%, a good result. NII was EUR 1,273
million, mainly due to lower prepayment penalties on mortgages and
higher hedging costs. We expect NII to bottom out in the second
half of the year, as deposit margins benefit from the improved
interest rate environment, and to be around EUR 5.2 billion for the
full year. We have seen continued growth of our mortgage and
corporate loan books. Our market share for mortgages improved to
17.5% in Q2 and we are now market leader in the Netherlands. Client
demand for corporate loans also remained strong. We continue tosee
pressure on margins for mortgages and corporate loans. Fee income
increased by 12% compared with Q2 2021, driven by higher
transaction volumes in payments and strong results at Clearing. Net
new assets at Wealth Management were EUR 1.1 billion higher.
Operating expenses totalled EUR 1,321 million as AML remediation
costs as well as investments relating to regulatory changes and
expansion of our digital and data capabilities were higher than
expected. We are making progress in our AML remediation programmes,
but more effort is required than expected and the programmes will
continue in 2023. We now expect full-year costs to be around EUR
5.3 billion, excluding incidentals, as cost savings are partially
offset by higher investments and regulatory levies. We have further
tightened our cost discipline, partly in anticipation of the
current inflationary environment. We remain committed to our cost
target of below EUR 4.7 billion in 2024, as AML and Corporate
Banking non-core costs will come down and we will deliver on our
cost-saving programmes.
Credit quality is good and impairments showed a release of EUR
62 million, reflecting improvements in non-performing loans. We see
no sign of deterioration of the credit environment yet and expect
the cost of risk for 2022 to remain below the through-the-cycle
cost of risk of around 20 basis points. We continue to closely
monitor the direct and indirect impacts of the war in Ukraine on
the bank and our clients. Prudent buffers are in place against
uncertainties in the economic outlook.
Risk-weighted assets increased by EUR 2.3 billion, mainly due to
business developments and model reviews. Our capital position
remains strong, with a fully-loaded Basel III CET1 ratio of 15.5%
and a Basel IV CET1 ratio of around 16%. The interim dividend for
the first half of 2022 has been set at EUR 0.32 per share, which
amounts to EUR 287 million. We have received approval from the ECB
for a EUR 250 million share buyback, conditional on a potential
NLFI sell-down, demonstrating our commitment to capital return.
We are a personal bank in the digital age, with our strategic
pillars – customer experience, sustainability and future-proof bank
– as our guiding principles. Undeterred by these challenging times,
we remain fully focused on the execution of our strategy and are
progressing on our financial and non-financial targets. To improve
the customer experience, we continually develop new propositions
for our clients. Together with a partner, we now offer a solution
for restaurants that lets their customers order contactless and pay
with Tikkie, giving restaurant staff more time to serve their
customers. We continue to broaden our product offering in private
markets, now also by giving our wealth clients the opportunity to
invest in an infrastructure fund.
Sustainability is core to our purpose and strategy. We have
introduced a sustainability dashboard for our wealthy clients,
giving them insight into the GHG emissions and ESG risks of
companies in their portfolios. Our Sustainable Impact Fund has
invested in an energy market trading platform that contributes to a
more efficient use of the power grid. We have also invested in an
online coffee company that shortens the supply chain from farmer to
consumer. We are updating our climate strategy and will present it
at the end of this year.
We are building a future-proof bank, digital by design. We
recently launched the Savings Lock, offering our clients extra
protection by preventing them from acting on impulse and falling
victim to scams. Chatbot Anna now also allows SME clients to check
the status of their request to open an account. And our business
clients can now sign their credit and guarantee documentation
digitally with ZealID, a provider of qualified electronic
signatures and a partner of ABN AMRO.
I would like to extend my gratitude to all my colleagues for
their strong commitment and drive. And I would like to thank all of
our clients for placing their trust in us. In the current
environment, many of our clients are facing a challenging
situation. We will continue to support them, true to our commitment
to fostering long-term relationships, while creating value for all
our stakeholders.’
Key figures and indicators (in EUR millions) |
Q2 2022 |
Q2 2021 |
Change |
Q1
2022 |
Change |
Operating
income |
1,884 |
1,732 |
9% |
1,933 |
-3% |
Operating expenses |
1,321 |
1,228 |
8% |
1,508 |
-12% |
Operating result |
563 |
504 |
12% |
425 |
32% |
Impairment
charges on financial instruments |
-62 |
-79 |
21% |
62 |
|
Income tax expenses |
151 |
190 |
-21% |
68 |
122% |
Profit/(loss) for the period |
475 |
393 |
21% |
295 |
61% |
|
|
|
|
|
|
Cost/income
ratio |
70.1% |
70.9% |
|
78.0% |
|
Return on
average Equity |
8.8% |
7.6% |
|
5.4% |
|
CET1
ratio |
15.5% |
18.3% |
|
15.7% |
|
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 Interim Report & Quarterly Report second
quarter 2022
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