Dutch bank ABN Amro on Monday reported a 3 percent fall in first-quarter net profit to 595 million euros ($711.5 million), as ongoing problems in the oil sector led to impairments on loans to shipping and offshore services clients. Net profit was higher then expected, as analysts in a Reuters poll had predicted a profit of 574 million euros, after the bank made 615 million euros in the same period a year earlier.
"We are on track to achieve our strategic priorities and financial targets by 2020", Chief Executive Kees van Dijkhuiuzen said in a statement. Ongoing cost savings reduced the ratio of costs to income to 57.9 percent in the first quarter, compared to 60.2 percent a year earlier, putting it in line with the 56 to 58 percent target set for 2020.
Van Dijkhuizen said "over half" of the 0.9 billion euros in cost savings set for 2020 have been realised, as ABN continues to modernise its IT systems. The bank's core capital adequacy ratio fell slightly to 17.5 percent in the first quarter, putting it at the bottom of the range targeted for this year.
ABN Amro in February said it will maintain relatively high capital buffers, as new banking regulations look likely to ultimately shave 4 to 5 percentage points off its capital requirement ratios in the coming years.
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