ABN AMRO suffers 183 million euro loss to single client

ABN Amro logo on a building in Rotterdam
ABN Amro logo on a building in RotterdamPhoto: Maarten_Zeehandelaar/DepositPhotos

ABN Amro took a 183-million euro hit to its profits after a single US client failed to meet margin calls required to keep trading. The bank pointed to the market turmoil during the coronavirus pandemic when it reported the loss in a statement at the beginning of the business day.

"As a result of the unprecedented volumes and volatility in financial markets following the outbreak of COVID 19," the bank's Clearing house will incur the 250 million dollar pretax "incidental loss," the bank said in a statement. The net loss equates to about 200 million dollars, or roughly 183 million euro.

The client responsible for the loss was not disclosed.

The client had a specific strategy, trading US options and futures, and failed to meet the minimum risk and margin requirements following extreme stress and dislocations in US markets. To prevent further losses, ABN AMRO Clearing decided to close-out the positions of this client. The impact will be included in the first quarter 2020 results of ABN AMRO

The bank, which is partly-owned by the Dutch government, had been beginning to see signs of a stock price recovery after a fall of nearly six consecutive weeks. News of the loss, which amounts to approximately 10 percent of ABN Amro’s annual profits, sent the bank's stock price tumbling by about five percent on Thursday, and was priced at nearly 8.41 at 4:50 p.m.

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