ABN Amro drops as buyback delay outweighs profit beat

BLOOMBERG

ABN Amro Bank slumped in Amsterdam after the bank’s delay of buyback plans outweighed the better-than-expected profit in the second quarter.
Net income of €870 million ($955 million) in the three months through June compared with expectations for profit of €576.3 million, while net interest income was broadly in line with expectations. The Dutch bank, which last announced a €500 million buyback program in February, said it doesn’t plan to make a further announcement on payouts until the fourth quarter results, later than expected.
The lender’s shares dropped  4.4% in Amsterdam and were trading 3.6% lower. The reaction in the shares can be attributable to net interest income not beating estimates as well as the delay of a decision on buybacks to the last quarter, Citi analyst Marta Sanchez Romero said.
ABN Amro is among the many European banks that continue to enjoy higher interest income as the European Central Bank hikes rates to rein in inflation. The lender is under pressure to boost shareholder payouts as a result, even at a time when political scrutiny of bank profits is increasing.
Net interest income came in at €1.62 billion, compared with €1.63 billion estimated in a Bloomberg survey of analysts.
The bank reported the release of €69 million in provisions while analysts expected provisions to increase by €96.4 million.