The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
ABN Amro Bank NV reported third-quarter profit that beat estimates as the Dutch lender released money it had stashed for doubtful loans and said it’s in talks with its regulator about buying back stock.
The bank, based in Amsterdam, saw net income jump 14% from a year earlier to 343 million euros ($397 million). That was higher than the 261 million-euro average estimate of
analysts surveyed by Bloomberg.
Banks are taking a rosier view of the creditworthiness of borrowers as pandemic-struck economies reopen after massive government support helped clients through the lockdowns. That’s left ABN Amro and fellow lenders in the delicate position of boosting shareholder payouts without drawing the ire of the European Central Bank, which eased lender conditions during the health crisis.
The bank is delivering “solid progress overall,†though this quarter’s beat is “less than meets the eye,†according to analysts at Citigroup Inc. They cited the fact that it is based on “volatile†results from ABN Amro’s group functions unit and the release of loan provisions.
The bank released 12 million euros of reserves for doubtful loans given what it termed the “benign†environment for credit, after stashing 270 million euros in the year earlier period. The bank also said the full year outlook improved, with provisions set to drop to about zero.
ABN Amro said it has retained 380 million euros of reserves that function as a “management overlay†to reflect uncertainty after government support measures ended.
The bank, which has one of the highest financial strength levels among European lenders, said it is “in a constructive dialogue†with its regulator on returning funds to investors via share buybacks after it reports 2021 results next year.