ABN AMRO Bank (ABN) Q2 2024 earnings summary

Executive summary

• Net profit for Q2 2024 was €642 million, with a return on equity of 10.8%, supported by strong net interest income and net impairment releases.

• Mortgage loan book expanded by €1.6 billion, maintaining a 20% market share in new mortgage production; corporate loan book grew by €0.7 billion.

• Announced acquisition of Hauck Aufhäuser Lampe to strengthen private banking in Germany and expand wealth management in Northwest Europe.

• CEO Robert Swaak to step down in H1 2025; search for successor underway.

• Interim dividend set at €0.60 per share, totaling €500 million.

Financial highlights

• Net interest income for Q2 2024 was €1,608 million, up 3% sequentially and flat year-over-year; net interest margin rose to 162bps.

• Fee income up 4% year-over-year to €462 million; other operating income declined 36% year-over-year.

• Operating expenses increased 11% year-over-year to €1,263 million; full-year costs expected around €5.3 billion.

• Credit quality remains solid with a stable impaired ratio of 1.9% and impairment releases of €4 million.

• Client loans at period end were €240.3 billion, client deposits €224.2 billion.

Outlook and guidance

• NII guidance for 2024 raised to above €6.4 billion due to favorable rate outlook.

• Full-year cost of risk projected well below through-the-cycle average of 15-20 bps.

• Cost guidance for 2024 maintained at around €5.3 billion despite CLA impact.

• 2026 targets: return on equity c.9-10%, cost/income ratio c.60%, CET1 Basel IV target around 14%, 50% dividend payout.

• Gradual normalization of impairments expected to start in 2025.