ABN AMRO Group reports underlying profit of EUR 325 million in first-half 2010.
The reported net result in the first half of 2010 amounted to a loss of EUR 968 million, due mainly to the closing of the EC Remedy and separation, integration and restructuring costs.
Excluding these items, the underlying net profit increased by 57% to EUR 325 million, compared with an underlying net profit of EUR 207 million in the first half of 2009.
This increase was driven by higher net interest income and lower impairments.
The underlying cost/income ratio moved from 71% to 75% due to several large additions to the legal provision totalling EUR 265 million; excluding these, the underlying cost/income ratio improved to 68%.
At 30 June 2010, the pro forma combined Tier 1 capital ratio and total capital ratio under Basel II were 12.3% and 17.0% respectively.
Gerrit Zalm, Chairman of ABN AMRO Group comments:
“This is the first time that the consolidated results of ABN AMRO Group are presented. Although these results are impacted by several significant items as indicated previously, the underlying profitability of the bank has improved compared to last year. Excluding items such as the loss on the EC Remedy and restructuring, separation and integration costs in both periods, a net profit of EUR 325 million was recorded, compared with a net profit of EUR 207 million in the first half of 2009. This underlying performance was driven by an increase in revenues, predominantly as a result of growth of the loan portfolio and improved margins on savings products, as market conditions improved. Continued cost management was masked by several large additions to the legal provision. Impairments were lower, reflecting the early improvements seen in the Dutch economy. However, we remain cautious and expect the level of loan impairments in the remainder of the year to be somewhat higher than the low levels seen in the first six months.
The first six months of the year were marked by the preparations for the legal merger and the start of the integration of both banks into a new bank: a bank with a centuries-old history that combines the best of ABN AMRO Bank and Fortis Bank Nederland. By early July, the planned merger of 150 branches into 500 branches finalised and to secure a controlled transition for Fortis Bank Nederland customers, branches will remain ‘two-in-one’ temporarily. Customers clearly appreciate this temporary dual service. At the same time, nearly 8,500 employees, most of them working for the retail bank, were given clarity on whether they will be placed in a new job. The overriding theme is the ‘from work to work' principle. Throughout this process our employees have continuously served our customers in a professional manner, and for this we are very grateful. At the same time, we thank our customers for the trust they have continued to place in us. A next step in the integration is the transfer of the data of 1.6 million Fortis Bank Nederland retail customers to the IT platform of ABN AMRO Bank, scheduled to take place later this year. By the end of 2010 the integration of the retail activities will largely be finalised. Private Banking and Commercial & Merchant Banking will follow in 2011 and 2012. During this process, our main objective is to secure a seamless transition for our customers.”
For further information, please contact:
ABN AMRO Group Press Office
+31 20 6288900
ABN AMRO Group Investor Relations
+31 20 3830517