ABN AMRO announces modest loss of 45 million euros for fiscal year 2020

ABN AMRO announces modest loss of 45 million euros for fiscal year 2020

  • Fourth quarter 2020 net income of 54 million euros, reflecting strong operating performance in a challenging environment
  • Dutch economy and resilient housing market; Impairments for the year lower than forecast, decrease expected in 2021
  • Good progress on phasing out non-core CIB activities; the portfolio has fallen by around 45% since Q2
  • Net interest income continues to be impacted by pressure on deposit margins and lower volumes of corporate loans
  • Implementation of a savings program of 1.1 billion euros; 700 million euros in additional savings by 2024
  • Very solid capitalization, Basel III CET1 ratio of 17.7% (Basel IV above 15%); well placed to pay the 2019 dividend
  • No dividend proposed for 2020; remain committed to resuming dividend payments on a sustainable basis
  • Strategy review including longer term goals presented in November: personal banking in the digital age

Robert Swaak, CEO, comments:

“Fourth quarter net profit was 54 million euros, reflecting strong operating performance and lower write-downs under difficult circumstances. Net interest income continued to be impacted by pressure on deposit margins and lower corporate lending volumes, in part due to the liquidation of non-core CIBs. We executed a cost program of 1.1 billion euros, reaching our cost target of 5.1 billion euros for 2020 (excluding restructuring provisions for the liquidation of CIB).

The financial results for 2020 were marked by the impact of Covid-19 and large exceptional customer files. We ended the year with a modest loss of 45 million euros. The resulting ROE for 2020 is an unsatisfactory -0.8% and the cost / income ratio is 66%. Excluding non-core CIB, the ROE is around 5%.

I am proud of the commitment we have shown to our customers over the past year and the difference our staff has done so, true to our goal of “Banking for the better, for generations to come”. I would like to thank our customers for their continued trust.

In the strategy review presented in November, we made clear choices and announced longer-term goals. We will be a personal bank in the digital age, focused on the Netherlands and North West Europe. We are making good progress in the non-core CIB liquidation process as we have reduced the portfolio by around 45% since Q2. I am proud that ABN AMRO has once again achieved a high score in the SAM Corporate Sustainability Assessment from S&P Global, which places us in the top 10% of the most sustainable banks in the world.

Our capitalization remains very solid, with a full Basel III CET1 ratio of 17.7% (Basel IV CET1 ratio above 15%). This gives us resilience and positions us well to pay the dividend for fiscal 2019, conditions permitting. Based on the revised ECB recommendation and the loss recorded in 2020, unfortunately no dividends will be offered in 2020. We are committed to resuming the payment of dividends, on a sustainable basis, taking into account the ECB’s recommendation .

The Dutch economy and housing market remain resilient, while effective government support programs continue. It is expected that the roll-out of the vaccination program will facilitate a significant lifting of restrictions in the second quarter, quickly leading to strong economic growth rebound in the second half of the year. We expect depreciation levels to be lower than in 2020. The bank continues to operate from a position of strength, with a distinct profile, a clear strategic direction and a very strong capital position. We are cautiously optimistic about the outlook for the bank as we implement our strategy. ‘

Key figures and indicators
(in millions of euros)
Q4 2020 Q4 2019 Switch Q3 2020 Switch FISCAL 2020 FISCAL 2019 Switch
Operating result 1,800 2 101 -14% 2 207 -18% 7 916 8,605 -8%
Operating Expenses 1,401 1,384 1% 1,357 3% 5 256 5,268
Operational results 400 717 -44% 850 -53% 2,660 3 337 -20%
Depreciation charges on financial instruments 220 314 -30% 270 -18% 2 303 657
Income tax charges 126 87 45% 279 -55% 401 634 -37%
Profit / (loss) for the period 54 316 -83% 301 -82% -45 2,046
Expense / income ratio 77.8% 65.9% 61.5% 66.4% 61.2%
Average return on equity1 0.7% 6.0% 5.6% -0.8% 10.0%
CET1 report at full load 17.7% 18.1% 17.2% 17.7% 18.1%
1 Based on profit for the period attributable to owners of the parent company

This press release is published by ABN AMRO Bank NV and contains inside information within the meaning of Article 7 (1) to (4) of Regulation (EU) No. 596/2014 (Market Abuse Regulation)

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