EUR 850.00 For Business Accounts Only

Morningstar | New ABN Company Report

Following its IPO in 2015, ABN Amro has witnessed a gradual improvement in its profitability and fundamentals, resulting in a more efficient and leaner bank. Thanks to healthy internal capital generation in recent years, ABN Amro operates with what we view as a healthy capital ratio, which will enable the bank to absorb any inflation arising from possible risk-weighted inflation, IFRS 9 changes, and the ongoing lower/negative interest-rate environment, which has been persistent. With close to 80% of its income originating from the Netherlands, ABN Amro is a Dutch play with a big chunk of its income coming from its retail business (close to 50%), which is heavily invested in mortgage activities (55% of total lending). While increasing mortgage risk weights as a result of Basel IV could pose some downside risk, in the medium term, we believe its capital position affords the bank room to manoeuvre to counter any short-term risk. A recent study from the Dutch Central Bank indicated that Dutch mortgages are less risky than often perceived, as combining loan/value and loan/income data reveals that only a small portion of Dutch mortgages have high loan/value ratios.We believe ABN Amro has improved its position steadily on the cost front, and we expect cost efficiency to continue improving steadily through ongoing restructuring initiatives in regulatory compliance and its continued focus on digitalising.