ABN Amro beats estimates, announces US$536 million buyback

ABN Amro Bank reported fourth-quarter profit that beat analysts’ expectations as the Dutch lender restrained costs and announced a US$536 million share buyback.

Net income of 354 million euros in the three months through December compared with expectations for profit of 55.1 million euros, with the result aided by a combination of lower loss provisions and operating expenses, according to a statement on Wednesday (Feb 8).

European lenders are benefiting from being able to charge more for credit after central banks hiked interest rates to combat record inflation, without yet seeing a spike in bad loans. That’s allowed peers including UniCredit and BNP Paribas to distribute excess capital to shareholders even as regulators call for restraint given economic uncertainty.

“Our strong capital position enables us to consider further share buybacks,” chief executive officer Robert Swaak said in a statement. “We are aiming for a gradual reduction of capital over time, in constructive dialogue with our regulator.”

ABN Amro shares rose after the result to the highest in almost three years, trading at 15.39 euros in Amsterdam.

Loan loss provisions of 32 million euros were better than 153.6 million euros estimated in a Bloomberg survey of analysts, while operating expenses of 1.34 billion euros were also slightly below the 1.4 billion euros estimated in a survey of analysts. 

SEE ALSO

ABN Amro expects to benefit from higher rates after beating estimates

Net interest income rose 17 per cent from a year earlier to 1.56 billion euros.  Fee and commission income was 0.7 per cent lower. CET1, the key measure of capital strength, was 15.2 per cent, higher than estimates. 

Swaak has overhauled ABN Amro by pulling out of swathes of its investment banking business to focus on retail and corporate clients. ABN Amro held its first ever share buyback earlier last year, distributing 500 million euros to investors. BLOOMBERG