ABN AMRO Group reports substantial increase in underlying profit to EUR 974 million in H1 2011 and declares an interim dividend of EUR 200 million.
ABN AMRO Group reports substantial increase in underlying profit to EUR 974 million in H1 2011 and declares an interim dividend of EUR 200 million
- Reported net profit for H1 2011 is EUR 864 million compared with a reported net loss of EUR 968 million in H1 2010
- Underlying net profit amounts to EUR 974 million. Underlying net profit for H1 2010 was EUR 325 million
- Retail & Private Banking showed strong results, Commercial & Merchant Banking realised higher net profit
- The underlying cost/income ratio improved to 63% from 75% in H1 2010
- At 30 June 2011, core Tier 1, Tier 1 and total capital ratio under Basel II were 11.4%, 13.9% and 18.2% respectively
- Reported net profit for Q2 2011 was EUR 325 million. Underlying net profit for Q2 2011 amounted to EUR 391 million despite a EUR 149 million (after tax) restructuring provision for
the customer excellence programme - Interim dividend of EUR 200 million to be paid on the ordinary shares
Gerrit Zalm, Chairman of ABN AMRO Group comments: ”The first six months of 2011 were marked by increasing uncertainty over sovereign debt, which resulted in more challenging business conditions. Nevertheless, our businesses have continued to show good commercial growth and we recorded an underlying net profit of EUR 974 million in the first six months of 2011, compared with EUR 325 million in the same period last year. We are pleased to announce that we will pay an interim dividend of EUR 200 million on our ordinary shares.
The impact of the government debt concerns on the global economy is still unclear. Though our resilient businesses and strong capital base put us in a good position, we remain cautious for the remainder of the year. We continue to expect impairments to be somewhat higher in the second half and pressure on interest margins to increase. Our first-half 2011 results should therefore not be extrapolated to the remainder of the year.
We are on schedule and more than halfway through the integration, which will run until the end of 2012. The benefits of the first year of integration are visible in the improvement of the underlying cost/income ratio from 75% a year ago to 63% in the first six months of 2011. Following the first phase of the integration, we have increased our ambition levels. This has resulted in additional initiatives and more ambitious goals for the short and medium term. These initiatives are geared to further increase customer focus and improve operational excellence, the combination of which we call customer excellence. The customer excellence programme specifically identifies and improves those aspects of our service which matter most to our clients and aims to improve the efficiency of our service, processes and systems.
Unfortunately these initiatives will have an impact on our employees. At this point in time we expect a total of 2,350 positions to be lost in the next 3-4 years. Despite continuous efforts to reduce redundancies to a minimum, 1,500 positions are expected to go through redundancies and the remaining 850 through natural attrition. At the same time, 450 new jobs will be created. A restructuring provision of EUR 200 million (pre-tax) has been recorded for this purpose in the first half of 2011. Under normal economic and business conditions and depending on the impact of further legislation for the financial sector, the customer excellence initiatives should result in a cost/income ratio structurally below 60% by 2014."