Mortgage bolster ABN Amro results, as bank launches €250m share buyback plan
ABN Amro posted slightly lower profits in the second quarter, partly due to lower interest income. Further growth in mortgages bolstered the results, as did the release of funds previously set aside for bad loans. Along with its quarterly results, the bank announced on Wednesday that it will repurchase €250 million worth of its shares, allowing some money to flow back to shareholders.
The bank booked €606 million on the bottom line last quarter, down 6 percent compared to quarter two of 2024. The profit was mainly due to higher mortgage lending.
ABN Amro’s mortgage portfolio grew by €1.8 billion to €160 billion in the second quarter. On Monday, De Nederlandsche Bank also reported that Dutch banks had significantly increased their mortgage lending after a period of slowdown. The mortgage market started regaining momentum after the European Central Bank began lowering interest rates last year.
ABN Amro also benefited from a 6 percent increase in fees and commissions for services like asset management.
On the downside, ABN Amro’s interest income fell by 5 percent. The bank has also been struggling with high costs, especially wage costs, as the bank hired many new employees last year, and salaries increased.
The bank has implemented stricter spending controls, especially for hiring external staff, and these are starting to have an effect. But costs are still higher than the bank wants. For every euro earned, the bank incurs 61.6 cents in costs. For comparable banks, this is closer to 55 cents. The bank will continue focusing on cutting costs where it can.
ABN Amro also announced the launch of a share buyback program in which the bank plans to repurchase up to €250 million of its shares. The buyback will start on August 7 and is expected to be completed by December. The repurchased shares will be canceled in due course.
