EUR 850.00 For Business Accounts Only

Morningstar | ABN Amro Reports 1Q 2019 Results: FVE Maintained

ABN Amro reported first-quarter results of EUR 478 million, down 20% from the same period a year prior, as lower operating expenses as well as lower impairment charges could not offset weaker income generation. Net interest income declined 6% year over year on the back of continued deposit margin compression and a mix of volume and margin developments in the corporate, residential mortgage, and customer loan operations, which in sum were a negative this quarter. The group’s net interest margin fell 7 basis points to 160 basis points. Net fee and commission income was down 4% vis-à-vis last year partially owed to the lower level of client assets following the market decline toward the end of 2018 as well as clients progressively shifting toward execution-only rather than managed portfolios in the private banking segment. Operating expenses developed well in the quarter. Personnel expenses declined 3% on an underlying basis driven by FTE reductions as part of ABN’s cost savings program, while other operating expenses were negatively impacted by higher regulatory levies. Impairment charges came in lower than last year at 15 basis points compared with 27 basis points as the result of active derisking of ABN’s loan portfolio. The impact was mostly seen in its exposure to shipping, diamonds, and offshore energy. We maintain our fair value estimate of EUR 23 and no-moat rating.