(Adds further earnings details, company comments, context)
AMSTERDAM Feb 15 ABN Amro, the
Netherlands' largest domestic lender, on Wednesday posted
fourth-quarter net profit of 333 million euros ($352 million),
beating expectations due to strong economic growth in the
Analysts polled for Reuters had seen profit at 279 million
euros, versus 272 million euros in the same period a year prior.
"Profitability improved on the back of growth in the loan
book - mortgages, small and medium enterprise (borrowers) and
corporate loans, and significantly lower impairments," said CEO
Kees van Dijkhuizen, who replaced Gerrit Zalm on Jan. 1.
Notably, loan impairments fell to 35 million euros from 124
million in the fourth quarter of 2015. Net interest income
margin improved to 1.53 percent, from 1.47 percent.
Van Dijkhuizen noted that growth in the company's mortgage
book was the first since 2010 and in the small and medium
sector, the first since before the 2008 financial crisis.
The Dutch economy grew 2.1 percent in 2016 and is expected
to accelerate in 2017, though the company noted risks from
possible protectionist policies emanating from the new U.S.
administration, and fallout from Britain leaving the European
Union, as Britain is one of the Netherlands' largest trading
With 80 percent of ABN's business focused on the
Netherlands, it is seeking to grow international lending,
focusing on commodities, renewable energy, food supply chain and
"We have started on-boarding new clients in these sectors,"
Van Dijkhuizen said. "This shows that our bank can achieve
growth both in the Netherlands and abroad."
However, the change will not occur swiftly: ABN said that in
the fourth quarter its lending was 79 percent domestic and 21
ABN continues to hold a large amount of capital: its Tier 1
equity ratio, a common measure of solvency for banks is now at
17 percent, up from 16.6 percent at the end of the third
ABN has argued it needs to hold the money pending new
guidance from the Basel committee on how much capital must be
held to offset risk-weighted assets, notably mortgages - an
issue that affects ABN and its major rivals in the Dutch market,
Rabobank and ING.
ABN declared a dividend of 84 cents per share, from 81 cents
in 2015, in line with its policy of distributing 45 percent of
The bank remains 70 percent owned by the Dutch state after
its nationalization during the 2008 financial crisis and
re-listing in November 2015.
($1 = 0.9453 euros)
(Reporting by Toby Sterling; Editing by Shri Navaratnam)