The Netherlands' biggest bank, ABN Amro, is seen reporting a 15 percent leap in quarterly earnings, buoyed by a fall in risk provisions and a profit from its once loss-making wholesale business.
ABN AMRO NV, which is now reaping the fruits of a billion-euro restructuring that began about three years ago, will report first-quarter results at 0530 GMT on Wednesday.
Analysts will be looking for news on how it plans to use the $2.4 billion it will get from the sale of its leasing business and around $540 million from the sale of its stake in Thailand's Bank of Asia, both announced last week.
ABN AMRO, one of the biggest foreign retail banks in the United States where the banking sector is consolidating, raised the possibility of a merger as it scrapped a take-over defence mechanism in February when it reported a record annual net profit of 3.16 billion euros for 2003.
But Chief Executive Rijkman Groenink downplayed the chances of a major acquisition at the time and analysts expect the group to make an add-on purchase in US retail banking or European private banking and asset management instead.
A Reuters poll of 10 analysts forecast first-quarter net profit at an average of 795 million euros ($939.1 million) compared with 690 million euros a year ago.
Forecasts were in a range of 701 million euros to 867 million euros.
"We believe the main driver will be the year-on-year turnaround in wholesale banking. In addition we expect loan loss provisions to trend down further," Kempen & Co analysts Paul van Doorn and Peter van Doesburg said in a preview note.
Kempen, which has an "add" rating on ABN Amro, said the wholesale activities - investment banking and brokerage - would report a profit of 143 million euros in the quarter compared with a 20 million euro loss previously.
ABN Amro's wholesale unit has recovered largely due to improving stock market prices and volumes, while costs there have been cut. Fewer bankruptcies of large companies have also resulted in smaller provisions for loan losses.
The Dutch group, which has shut non-core units and slashed about 10,000 jobs world-wide, has said that 2004 earnings will grow but at a slower pace than last year.
Analysts expect a decline in quarterly earnings from the bank's consumer and commercial business due to a sharp fall in mortgage activity in the United States.
ABN Amro is selling its 80.77 percent stake in Bank of Asia PCL to Singapore's United Overseas Bank Ltd. Based on Friday's closing price of 5.20 baht per share, the stake is worth about $540 million.
The Dutch bank is also selling its LeasePlan unit, a European market leading fleet management provider, for two billion euros to German car maker Volkswagen and two co-investors - Athens-based Olayan Group and Abu Dhabi state-owned Mubadala Development Company.
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