The private banking arm of Dutch lender ABN Amro has reported a net profit of €104m for the second quarter of 2018, a slump of 56% compared to €234m in the same period last year, ABN AMRO Q2 results show.
The unit’s operating profit before tax for the quarter ended 30 June 2018 was €139m, down 45% from €252m in the corresponding quarter of 2017.
Compared to last year, the division’s operating income decreased 33% to €376m while operating expenses dropped 25% to €230m.
ABN Amro Q2 Results
The unit’s net interest income rose 11% year-on-year to €180m. The bank said that was rise was driven by margin improvements in the Netherlands.
The cost/income ratio of the private banking arm at the end of June 2018 stood at 61.1%, versus 54.8% in the previous year.
Client assets at the end of June 2018 totalled €200.9bn, up €800m from the previous quarter due to recovered market performance.
Overall, the banking group posted a net profit of €688m for the second quarter of 2018, a 28% decrease compared to €960m in the same quarter of 2017. The group attributed the decline in profit to sale of Private Banking Asia and impairment releases.
ABN Amro CEO Kees van Dijkhuizen said: “The Dutch economy continues to flourish and this is reflected in the financial results for the second quarter with a solid net profit of EUR 688 million. Net interest income remained strong, despite the low interest rate environment. Impairments were well below the previous quarter, although still elevated as challenges remain in certain sectors. We continue to expect full-year impairments to be below the through-the-cycle average of 25-30 basis points.
“The cost/income ratio over the first six months was 56.5% and return on equity was 12.5%. Our capital position increased strongly to a CET1 ratio of 18.3% due to active balance sheet management. The interim dividend has been set at EUR 0.65 per share, in line with the amount paid in the first half of last year, reflecting an increase of the pay-out to 50%.”