Wednesday 15 February 2017 2:50 pm

ABN Amro profits leap in fourth quarter, beating analysts' expectations

ABN Amro beat expectations today by reporting its fourth quarter profits grew by more than a fifth. 

The figures

The Dutch lender reported profits of €1.8bn (£1.5bn) for its 2016 full year, down six per cent on €1.9bn the year before. However, profits for the fourth quarter alone sprung up to €333m, an increase of 23 per cent compared with €272m for the same period in 2015.

Meanwhile, the partly state-owned bank's fully-loaded common equity tier 1 capital ratio improved to stand at 17 per cent by the end of 2016, up from 15.5 per cent at the end of 2015 and from 16.6 per cent at the end of the third quarter of 2016.

ABN Amro also proposed a final dividend of €0.44 per share, bringing the total dividend for 2016 to €0.84, up slightly from €0.81 in 2015.

Shares are trading up 3.3 per cent at €22.43 at time of writing. 

Why it's interesting

Like many of its European peers, including Commerzbank and UniCredit to name just two, ABN Amro is currently undergoing a restructure of its business model, which it announced in the latter half of last year, having determined its cost to income ratio was still too high for its tastes. 

However, unlike some of its European peers, the costs of carrying out a restructuring plan seem yet to have hit ABN Amro's books, which remained relatively healthy for the final quarter of last year and beat analyst expectations. 

Restructuring costs of €153m were accounted for in the bank's fourth quarter. 

What ABN Amro said

"The fourth-quarter results are solid. We are a financially healthy and robust bank," said chief executive Kees van Dijkhuizen.

In short

Boosted share price clearly reflects the better-than-expected figures