Dutch bank ABN Amro remains optimistic that it will continue its recovery in 2021. Last year was a special year for several business sectors, in particular because of the coronavirus pandemic. However, the financial institution managed to achieve good results in the fourth quarter. Thus, for the fiscal year of this new year, the bank hopes to continue its progress.
The Dutch bank ABN Amro, in which the Dutch State is a shareholder, ended the year 2020 on a high note. It achieved a very good performance in the fourth quarter of its financial year. In the wake of this, the company announced a better than expected net profit in Q4. The financial institution remains optimistic that it will continue to build on this momentum for the year 2021.
In a press release, Robert Swaak, Managing Director of ABN Amro, confirmed his institution's ambitions for the new year. He and his team remain moderately optimistic about the bank's prospects. In other words, the man hopes that the institution will be able to continue its recovery in 2021.
He believes that the rollout of vaccination campaigns should lead to a rapid lifting of the restrictive measures introduced in several countries to counter the coronavirus epidemic. This could be very beneficial for the strong economic recovery in the second half of the year, he adds.
ABN Amro posted interesting results in the fourth quarter of 2020. However, the bank's quarterly net profit fell by 83% to 54 million euros. This is higher than the market's expectation of a profit of 35 million euros.
However, the bank's results are expected to remain under pressure. This is due to the fact that low interest rates continue to weigh on the bank's margins. During the quarter, net interest income contracted by 15% to 1.35 billion euros.
This figure is slightly below the bank's expectations and the market's expectations. In addition, in the fourth quarter, ABN Amro estimated that provisions for bad debts fell by 30% to 220 million euros. 220 million. Therefore, the Dutch bank says it expects this decline to continue this year.
ABN announced that it had reduced its investment banking portfolio by 45% in the second half of last year. This announcement comes after the bank declared in August that it was halting all its commodity financing operations. This followed heavy losses incurred by the bank.
On the other hand, the Dutch bank has not submitted any new information in connection with the investigation opened by the Dutch public prosecutor's office in September 2019 for money laundering and terrorist financing. In addition, ABN recorded a net loss of EUR 45 million for the year 2020.
As a result, shareholders will not be able to receive a dividend in 2020. However, the dividend payment is deferred for this year. On the subject, the bank's managing director considered that the bank is well placed to do so.