ABN AMRO Bank reports pro forma full year 2009 financial results

Press release -

ABN AMRO Bank, the entity containing the ABN AMRO businesses acquired by the Dutch State, reports a pro forma loss for the year 2009 of EUR 117 million. The loss was due to higher loan impairments, pressure on interest margins, higher Dutch deposit guarantee scheme charges, and separation and integration costs.

  • Excluding separation and integration costs, and charges for the Dutch deposit guarantee scheme, ABN AMRO Bank would have recorded a net profit for 2009 of EUR 114 million

  • Costs were almost flat despite higher costs for the Dutch deposit guarantee scheme and separation and integration charges; excluding the effect of these in both years, costs decreased by EUR 39 million compared with 2008

  • The loss for the fourth quarter 2009 amounted to EUR 162 million and included charges for the Dutch deposit guarantee scheme, higher loan impairments, and separation and integration costs; excluding separation and integration costs, and charges for the Dutch deposit guarantee scheme, the net loss for the fourth quarter was EUR 21 million

  • At 31 December 2009, Tier 1 capital ratio and total capital ratio amounted to 10.2% and 14.8% respectively

  • ABN AMRO Bank plans to legally separate from ABN AMRO Holding on 1 April 2010

Gerrit Zalm, Chairman of ABN AMRO Bank comments: "2009 was a year with many challenges. First of all, the severe slowdown of the economy required increased focus on business as usual. Revenues and margins were under pressure due to difficult market conditions and loan impairments rose to new highs. Strict cost management was implemented to weather these challenges, which resulted in costs below budget. However, additional separation and integration costs and higher charges for the Dutch deposit guarantee scheme masked the improvement of the underlying cost level. A net loss of EUR 117 million was recorded in 2009. Excluding the separation and integration costs and charges for the Dutch deposit guarantee scheme, a net profit of EUR 114 million would have been realised. The year 2009 was also marked by continued preparations for the separation from ABN AMRO Holding. This separation, which is planned for 1 April 2010, will represent a new starting point for the bank and will enable us to start building a strong, solid bank, which combines the best of ABN AMRO Bank and Fortis Bank Nederland."

This press release contains the pro forma results of ABN AMRO Bank N.V. (ABN AMRO Bank), comprising the businesses of ABN AMRO that were acquired by the State of the Netherlands ('Dutch State') and that were substantially demerged and/or otherwise transferred to ABN AMRO Bank in the first quarter of 2010. In 2009 these businesses were part of ABN AMRO Holding N.V. and its consolidated entities (ABN AMRO Holding) and controlled by the Managing Board and Supervisory Board of ABN AMRO Holding.

The Dutch State acquired businesses consist of the business units Netherlands and Private Banking (including the international diamond business), and the segment Other. Other comprises activities that do not qualify as a business activity, including the head office functions and centrally held asset and liability management portfolios.

The pro forma results have been prepared on the basis as if all Dutch State acquired businesses that have become part of ABN AMRO Bank through the legal demerger on 6 February 2010 or that have otherwise been transferred to ABN AMRO Bank, were already transferred into ABN AMRO Bank and its consolidated subsidiaries as of the beginning of the first comparative year included in the pro forma financial information.

The pro forma results include the results of NEW HBU II N.V. (NEW HBU II) and IFN Finance B.V. (IFN Finance) (referred to hereafter as 'EC Remedy'). The execution of the sale of these entities to Deutsche Bank in the beginning of the second quarter following the legal separation will result in a loss of approximately EUR 800-900 million. A Mandatory Convertible Security in the amount of EUR 833 million issued by ABN AMRO Bank N.V. will be converted into share capital at legal separation (reference is made to 'Capital, liquidity and funding').

The pro forma results exclude the Dutch State's interest in the assets and liabilities that are not yet allocated to any of the Consortium Members (the so called 'Shared Assets'). These remain an interest of the Dutch State until their disposal or alternative transfer.

The figures in this press release exclude the private equity consolidation effect and are therefore a non-GAAP measure. For further information regarding the pro forma results of ABN AMRO Bank, please refer to the 2009 Annual Review of ABN AMRO Bank, which is also published today. This Annual Review is a voluntary disclosure which should be read in conjunction with the 2009 Annual Report of ABN AMRO Holding. The 2009 Annual Review of ABN AMRO Bank and the 2009 Annual Report of ABN AMRO Holding can be found on our website www.abnamro.com.




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