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ABN Amro raises financial targets, awaits IPO green light
[AMSTERDAM] Nationalised Dutch bank ABN Amro on Wednesday raised its financial targets for 2017, thanks to a recovering economy and its eagerness to return to private hands as soon as possible.
The target increases are more a reflection of reality than ambition, as most of the new goals have already been surpassed. They include a Tier 1 capital adequacy ratio of at least 11.5 per cent of assets, a cost-income ratio of less than 60 per cent, and a return on equity of at least 10 percent.
ABN was well ahead on all those measures when it reported second quarter earnings last month.
But the bank said that in the light of its "strong capital generation" it would boost its dividend payout ratio in 2017 to 50 per cent from 40 per cent at present.
ABN Amro was nationalised in 2008 and the Dutch government has approved a public share offer this fall or next spring.
The government agency tasked with overseeing the bank's return to the market has chosen Deutsche Bank and Morgan Stanley to lead the process, but has yet to set a date. The NLFI agency says timing will depend on market conditions.
ABN Amro chief executive Gerrit Zalm said during last month's results report that the bank was "on track" for a listing this year.
The bank's second-quarter underlying net profit was 600 million euros (S$947.8 million), up from 322 million euros a year earlier. Bad loans fell sharply amid a Dutch economy that is set to be one of Europe's top performers in 2016.