ABN Amro Increases Profit Outlook as Central Bank Rates Fuel Growth
ABN Amro's Financial Performance and Strategic Outlook
By Jakob Van Calster and Mateusz Rabiega
Profit Guidance Raised Amid Strong Quarterly Results
Aug 12 (Reuters) - ABN Amro lifted the guidance for its commercial net interest income after beating quarterly expectations on Wednesday, joining other major Benelux banks that have raised forecasts as higher central bank interest rates continue to support their profitability.
The Dutch bank's shares touched an all-time high in early trading, rising around 5% on Euronext.
Updated Net Interest Income Forecast
ABN now expects a commercial NII of €6.8 billion ($7.8 billion) this year, up from the previous forecast of €6.4 billion and about €100 million above analyst consensus.
CEO's Statement on Economic Resilience and Rate Outlook
"The Dutch economy remained resilient, supported by healthy household spending and more positive consumer confidence ... with uncertainty remaining high and the full inflationary impact of the energy shock yet to play out, we expect another rate hike in September," CEO Marguerite Bérard said in a statement.
Quarterly Profit Growth and Operational Efficiency
Quarterly profit grew almost 30% to €780 million, exceeding market expectations by more than €100 million, as recently acquired businesses boosted revenue and the bank cracked down on costs.
Capital Strength and Acquisition Strategy
Sitting on a comfortable CET1 ratio of 15.9%, a key measure of a bank's capital strength, ABN is for now focused on ensuring the success of its already made acquisitions, rather than hunting for new targets, Bérard said in a press call.
Net Interest Income and Housing Market Trends
NII, which accounted for around 70% of the bank's revenue, is largely dependent on mortgages in the Netherlands. Finance chief Ferdinand Vaandrager told journalists he expected a "moderation of the market" after two years of strong growth, but added he did not see any material impact on ABN's balance sheet as housing prices continue to rise.
Operational Expenses and Cost-to-Income Ratio
Operational expenses too beat the market view as the lender's cost-to-income ratio fell to 53.7% by the end of June, from 61.5% a year earlier, already surpassing its 2028 target of below 55%.
Efficiency Initiatives and Job Cuts
The bank has long struggled with its operational efficiency. At her first capital markets day in November 2025, Bérard announced job cuts as she pledged to narrow the gap with European peers.
Additional Information
($1 = 0.8670 euros)
(Reporting by Jakob Van Calster and Mateusz Rabiega, editing by Matt Scuffham and Milla Nissi-Prussak)
