ABN AMRO Group reports strong growth in underlying profit to EUR 1,077 million.
Reported net loss for the period 2010 was EUR 414 million, due to the forced sale under the EC Remedy (EUR 812 million negative net-of-tax) and separation and integration costs (EUR 679 million net-of-tax in total). Reported net profit for the period 2009 was EUR 274 million
Underlying net profit, which excludes the sale under the EC Remedy and separation and integration costs, amounted to EUR 1,077 million, compared with an underlying net profit of EUR 142 million in 2009
This increase was driven by higher operating income (+10%) and lower loan impairments (-47%), despite higher costs as a result of legal provisions and expenses (EUR 264 million netof- tax) as reported on previous occasions
The underlying cost/income ratio improved to 70% from 75% in 2009
At 31 December 2010, pro forma combined core Tier 1, Tier 1 and total capital ratio under Basel II were 10.4%, 12.8% and 16.6 % respectively
Reported Q4 2010 net profit was EUR 213 million compared with a reported Q3 2010 net profit of EUR 341 million; underlying Q4 2010 net profit amounted to EUR 309 million, compared with an underlying Q3 2010 net profit of EUR 443 million (including a net-of-tax gain on the buyback of own debt of EUR 130 million)
Gerrit Zalm, Chairman of ABN AMRO Group comments:
”Looking back on 2010, we can conclude that we have reached and in some occasions even surpassed the goals we had set for 2010: we realised separation, concluded the first major integration projects successfully and on time, rebuilt capabilities, boosted client satisfaction and delivered a strongly improved financial performance.
The improvement in underlying profit in 2010 was mainly due to our continued focus on clients and costs, the first synergy benefits from the integration and the recovery of the Dutch economy. The reported result was impacted by separation and integration costs and the forced sale under the EC Remedy, EUR 1.5 billion in total. The integration costs will diminish sharply in the two years ahead of us. We are now well under way to improving the profitability and efficiency of the bank. Our capital and liquidity position gives us a good starting position to meet the upcoming Basel III requirements, which will be phased in starting from 2013. The Dutch State has announced that we can start preparations for an exit in 2013, probably leading to a stock exchange listing in 2014. We welcome this view.
All this was possible thanks to our clients and staff. Throughout the turbulent times, clients remained loyal or returned to the bank. We will do our utmost to prove that they have made the right decision. Staff have displayed admirable efforts, dedication and unflagging commitment even in times of personal uncertainty. We are grateful to them and proud of their performance."