Dutch bank ABN Amro reported on Monday a 23 percent rise in quarterly net profit and the 1.7 billion euros ($2.2 billion) sale of its Bouwfonds property unit, but its shares fell more than 3 percent on disappointment over expenses and provisioning.
The Netherlands' biggest bank said it would book a 350 million euros gain from the Bouwfonds sale and use some of the proceeds for a 750 million euros share buyback.
ABN Amro made a net profit of 1.216 billion euros, or 0.65 euro per share, in the three months, up from 987 million euros, or 0.54 euro per share, a year earlier. Operating income, or revenue, rose 21 percent to 5.84 billion euros.
Net profit, helped by strong growth in Latin America, lower taxes and the sale of ABN's stake in Hungarian K&H Bank, was above the median forecast of 1.11 billion euros in a Reuters poll of 16 analysts. But excluding a 208 million euros gain from K&H and a 53 million euros restructuring charge, ABN's profit slipped just below analysts forecasts.
KEY STRATEGY: ABN said it would sell its Bouwfonds property development and asset management business to Rabobank for 845 million euros and its Bouwfonds property financing activities to SNS REAAL for 840 million euros. Both deals, subject to regulatory approval, will close by year-end, ABN said.
ABN, which announced seven months ago that it would sell the non-mortgage activities of Bouwfonds, is directing its business towards cross-selling banking services to small- and mid-sized clients globally after a restructuring last year. Dutch bank SNS REAAL, which is expanding through acquisitions after an initial public offering in May, said it would pay cash for the Bouwfonds unit and expects the deal to add to earnings, although it did not say by how much.
On the cost side, ABN said that its provisions against loan losses rose nearly 100 million euros to 430 million euros in the second quarter, mainly due to higher loan-loss provisions in Latin America, North America and Asia.
Comments
Comments are closed.