ABN AMRO Shares Fall on Higher 1Q Costs Despite Net Profit Beat — Update

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By Anthony O. Goriainoff

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ABN AMRO Bank NV shares fell Wednesday after the Dutch lender booked higher than expected costs in the first quarter, despite beating net profit forecasts.

Shares at 0914 GMT were down EUR1.03, or 8.7%, at EUR10.88.

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The bank said it booked 908 million euros ($958.2 million) of expenses in the first quarter of the year, of which EUR50 million were related to anti-money-laundering, or AML, provisions. The provision reflected AML-remediation programs, increased IT investments, as well as higher regulatory levies, it said.

“We are making progress in our AML remediation programs; however, more effort is required than expected and the programs will continue into 2023. The Dutch central bank has been informed about these developments and is closely monitoring our progress,” Chief Executive Robert Swaak said .

ABN AMRO said it already incurred a EUR480 million AML settlement with the Dutch Public Prosecution Service in the first quarter of 2021, which wasnt tax deductible and consisted of a EUR300 million fine and a disgorgement of EUR180 million.

The bank added that in 1Q 2022, it booked impairments of EUR62 million due to the macroeconomic situation, reflecting a weakened economic outlook and potential second-order effects stemming from the war in Ukraine.

“ABN AMRO’s direct exposure to Russia is very limited, but we expect potential second-order effects to have an impact on our clients. We are closely monitoring the situation and proactively reaching out to clients,” Mr. Swaak said.

The bank reported a net profit for the first quarter of EUR295 million compared with a net loss of EUR54 million a year earlier and consensus of EUR247.9 million, taken from FactSet and based on three analysts forecasts.

Risk-weighted assets rose by EUR6.7 billion, mainly due to a EUR5.0 billion add-on for model reviews and redevelopments.

The bank’s operating income for the period was EUR1.93 billion, compared with EUR1.85 billion.

The lender’s fully loaded CET1 ratio–a measure of a bank’s financial strength–stood at 15.7%, compared with 17.4%.

Write to Anthony O. Goriainoff at [email protected]

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Credit: www.marketwatch.com /

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