ABN AMRO reports full-year 2012 underlying net profit of EUR 1,285 million and EUR 84 million for Q4 2012

Press release -

ABN AMRO reports full-year 2012 underlying net profit of EUR 1,285 million and EUR 84 million for Q4 2012.

  • Underlying net profit, excluding separation and integration-related expenses, was EUR 1,285 million in 2012, compared with EUR 960 million in 2011

  • Impairments were lower as 2012 included a EUR 125 million pre-tax release of Greek impairments compared with a EUR 880 million pre-tax charge in 2011. Excluding the Greek exposures, impairments were significantly higher compared to 2011

  • The underlying cost/income ratio improved to 61%, down from 64% in 2011

  • Underlying net profit for Q4 2012 decreased to EUR 84 million (from EUR 374 million for Q3 2012) as impairment charges more than doubled and the Dutch bank tax (EUR 112 million) was charged

  • Reported net profit increased to EUR 948 million for 2012. The reported net loss in Q4 was EUR 97 million and was due mainly to integration costs

  • The core Tier 1 ratio improved to 12.1%, Tier 1 ratio to 12.9% and total capital ratio to 18.4%

  • The proposed dividend to the ordinary shareholder is EUR 250 million

  • All integration activities were completed in 2012

Gerrit Zalm, Chairman of ABN AMRO Group, comments:
"2012 was an important year, as it marked the finalisation of the integration. Four years ago we developed plans for the integration of ABN AMRO and Fortis Bank Nederland. I am pleased to say that we have completed this complex operation with relatively little inconvenience to our clients, on schedule and on budget and that this has yielded the efficiency improvements envisioned at the outset.

In the meantime, we have been conducting our ordinary business in not-so-ordinary times. The economic environment continued to be challenging in 2012. Despite these circumstances, the bank delivered satisfactory results for full-year 2012. The underlying operating result remained almost unchanged and the underlying cost/income ratio improved to 61%, due in part to cost control and integration benefits, partially offset by the Dutch bank tax. The underlying net profit increased by 34% to EUR 1,285 million and the return on equity was 10%. Excluding several large items and divestments in 2012 and 2011, underlying net profit would have been 34% lower driven mainly by higher loan impairments. The return on equity would have been 8%. The bank further strengthened its capital position, resulting in a core Tier 1 ratio of 12.1% and a total capital ratio of 18.4%.

Following the integration we have emerged as a solid bank with many of our key capabilities strengthened. With our sights set on the future, we have extended our horizon to 2017 and have made clear choices for our local and international operations. The refined elements of our strategy can be categorised into five strategic priorities: enhance client centricity, invest in our future (IT, staff and sustainability), strongly commit to a moderate risk profile, pursue selective international growth and improve profitability. We have incorporated these into three targets for 2017: a cost/income ratio of 56-60%; a Common Equity Tier 1 (under Basel III) ratio comfortably above the regulatory minimum, increasing it gradually to a range of 11.5-12.5%; and a return on equity of 9-12%. Despite the challenges that lie ahead and the modest economic outlook, we are optimistic. Considering all we have achieved so far, and given the dedication, professionalism and perseverance of our staff, we are confident that we have what it takes to succeed."



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