ABN Amro's second-quarter profit drops on legal cost provisions

[AMSTERDAM] ABN Amro Group NV, the state-controlled Dutch lender that returned to the market in November, said second-quarter profit dropped by 35 per cent on provisions for legal costs.

Net income fell to 391 million euros (S$587.30 million) from 600 million euros a year earlier, the Amsterdam-based bank said in a statement on Wednesday.

Europe's largest banks have reported a drop in second-quarter earnings, hurt by volatile markets and record-low interest rates. While Dutch competitor ING Groep NV eliminated thousands of jobs over the past several years, ABN Amro chief financial officer Kees van Dijkhuizen has said that the bank is still mulling ways to lower costs.

ABN Amro has fallen 17 per cent this year, cutting its market value to about 16 billion euros. That compares with a 26 per cent drop in the Stoxx Europe 600 Banks Price Index.

Once one of the world's largest banks, ABN Amro was transformed under state ownership into a consumer lender focused on the Netherlands.

The bank said in July it will increase provisions by 360 million euros to compensate about 6,800 clients over interest-rate swaps that backfired after the 2008 financial crisis.

BLOOMBERG