ABN Amro Profit Misses on Higher Provisions, Pledges Buyback

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(Bloomberg) — ABN Amro Bank NV reported fourth-quarter profit that missed analyst expectations on higher-than-expected expenses and provisions for bad loans.

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Net income was €410 million ($488.6 million) in the three months through December, compared with analyst expectations of €497.4 million on average in a Bloomberg survey.

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ABN Amro is in the midst of a shake up as Chief Executive Officer Marguerite Berard has vowed to boost its returns and ability to compete. She is cutting a net 5,200 jobs by 2028 compared to 2024, selling a personal loan unit and plans to explore outsourcing its credit card business.

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The lender’s shares fell 0.1% to €30.95 as of 9:36 a.m. in Amsterdam.

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The Dutch lender also announced an additional €500 million in combined dividends and a share buyback program, according to a statement on Wednesday. That comes on top of a proposed final dividend for 2025.

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ABN Amro made “significant progress” through last year toward the “goal of optimizing our cost structure and streamlining the bank,” Berard told reporters. The company eliminated 1,500 jobs last year, she said. 

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ABN Amro has also been stepping up acquisitions within its core market of northwest Europe. The bank completed the purchase of German wealth manager Hauck Aufhäuser Lampe AG in July. In the fourth quarter, it agreed to buy NIBC Bank from Blackstone Inc. to grow in Dutch retail banking.

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The Dutch lender is among European banks trying to reduce their dependence on lending revenue. ABN Amro said on Wednesday that fee income rose 14% in the quarter from a year earlier, partly thanks to its clearing business which benefited from swings in financial markets.

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Efficiency is a key area of focus for Berard. ABN Amro said costs excluding incidental and restructuring charges were at the lower end of its guided range of €5.4 billion to €5.5 billion for last year. In 2026, they should amount to €5.6 billion, when stripping out restructuring expenses and the intended acquisition of NIBC.

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While the quarterly results were “mixed,” the bank “made fast progress on its longer term plan of managing costs and freeing up capital to increase the distribution to shareholders,” Anke Reingen, an analyst at Royal Bank of Canada, said in a note to clients.

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The restructuring moves come amid the sell down of the Dutch government’s stake in the lender to about 20%, from 30.5% previously. The state, which bailed out ABN Amro after the 2008 financial crisis, remains its largest shareholder. 

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During the quarter, ABN Amro completed a significant risk transfer with Blackstone tied to large corporate loans. It had said the transaction was expected to cut its risk-weighted assets, which determine its capital strength.

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(Updates with shares in fourth paragraph, CEO and analyst comments)

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