- ABN Amro Holding NV, the largest Dutch bank, said third-quarter profit rose 41 percent, boosted by mortgage sales at its U.S. unit and a return to profit at its corporate and investment banking business.
Net income climbed to 832 million euros ($967 million), or 51 cents a share, from 591 million euros, or 37 cents, in the third quarter last year, ABN Amro said in a statement distributed by Euronext Amsterdam. Analysts had forecast profit would rise to 690 million euros, according to a Bloomberg News survey.
Chief Executive Officer Rijkman Groenink has revived earnings growth at the Dutch bank by cutting more than 10,000 jobs, scaling back the investment banking business and focusing on consumer lending. Earnings have been buoyed by a boom in mortgage loans in the U.S., ABN Amro's biggest consumer banking market. The company said today it expects 2003 net income to rise 25 percent.
Banks such as Wells Fargo & Co., the biggest U.S. mortgage lender, have seen earnings climb as consumers refinanced their home loans as interest rates fell to a 45-year low in June. ABN Amro's U.S. mortgage business accounts for about a third of total revenue, and the U.S. consumer banking business as a whole accounted for half of the Dutch bank's profit in the first half of this year.
ABN Amro Mortgage Group Inc. made $36 billion of home loans in the quarter, up 12 percent from the year-earlier period, the unit said last week. Sales slowed from the second quarter, however, as lending rates rose.
Mortgage Market Outlook
While some analysts say mortgage refinancings may have peaked, home sales have kept rising. Americans bought a record 7.835 million homes in September, the National Association of Realtors said this week, extending three years of growth in the industry.
ABN Amro expanded its U.S. consumer bank in 2001 with the $2.75 billion purchase of Michigan National Corp., making it the second-largest bank in the Midwest. The bank has said it's interested in more takeovers in Ohio and the area around Chicago.
Bank of America Corp., the No. 3 U.S. bank, earlier this week agreed to buy FleetBoston Corp., the biggest bank in New England, for $47 billion, a transaction that may spur further takeovers among regional banks, analysts have said.
While lending to consumers has boosted profit at retail banks, earnings growth has lagged rivals with large investment banking businesses as demand for advice on share sales and mergers picked up in the third quarter.
Investment Banking
Merrill Lynch & Co., the biggest securities firm by capital, reported a 50 percent jump in third quarter profit, while Citigroup Inc. said earnings in the quarter climbed 20 percent on gains from investment banking.
ABN Amro's wholesale unit, which combines corporate and investment banking, was forecast by analysts to return to profit in the third quarter after a loss in the year-earlier period.
The Dutch bank has been reducing the capital invested in the wholesale business and dropping clients that use the bank for low- margin loans and take more lucrative business elsewhere. At the end of June, ABN Amro had 66.1 billion euros of risk-weighted assets in the unit, down from 96.9 billion euros at the beginning of 2001.
ABN Amro, Europe's No. 8 bank by assets, has also been slashing costs to revive profit at its consumer bank in the Netherlands, where it has cut more than 6,000 jobs and shut a third of its branches
Hier beknopt in het nederlands.
ABN AMRO verwacht stijging van nettowinst over heel 2003 met 25%
Resultaten derde kwartaal 2003:
Derde kwartaal 2003 (in vergelijking met derde kwartaal van 2002)
- Bedrijfsresultaat gestegen (+23,7%) dankzij hogere baten
- Voorzieningen verlaagd (-10,4%)
- Nettowinst fors hoger (+40,8%)
- Efficiency ratio met 330 basispunten verbeterd tot 66,2%
Derde kwartaal 2003 (in vergelijking met tweede kwartaal van 2003)
- Baten stijgen met 5,2% dankzij diversiteit van inkomstenstroom
- Lasten nemen toe met 7,5%, deels door incidentele uitgaven
- Bedrijfsresultaat verbetert voor vierde achtereenvolgende kwartaal (+1,0%)
- Nettowinst komt 6,4% hoger uit
- Ratio voor kernvermogen (Tier 1) verbetert verder tot 7,79%