(Reuters) – ABN Amro reported better-than-expected fourth-quarter net profit on Wednesday, benefiting from high interest rates and despite some pressure on mortgage and consumer lending margins.
The Dutch bank posted a roughly 54% rise in fourth-quarter net profit to 545 million euros, while analysts had expected 422 million euros, according to a survey compiled by the company.
On the Amsterdam Stock Exchange, ABN Amro shares rose 5.51% to 14.18 euros at 08:55 GMT.
The banking sector has been one of the main beneficiaries of rising interest rates over the past two years. However, the outlook is clouded by economic uncertainty and expectations of possible rate cuts later in the year.
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The bank’s net interest income, which measures the difference between interest received and the cost of deposits, fell to 1.5 billion euros in the fourth quarter, from 1.56 billion euros a year earlier . This figure is slightly higher than analysts’ consensus of 1.49 billion euros, according to the survey.
The company said it expected net interest income for 2024 to be broadly in line with the 6.3 billion euros recorded last year.
ABN Amro’s CET1 ratio, a key measure of a bank’s financial resilience, fell 0.9 percentage points to 14.3% as of December 31, compared with analysts’ estimate of 14.7%.
Costs in the last quarter of 2023 were higher due to “increased resources for data capabilities, continued digitalization of processes and regulation of sustainable finance,” the group said.
ABN Amro expects these costs to remain significant this year.
(Written by Gaëlle Sheehan and Nathan Vifflin in Gdansk, French version Corentin Chappron and Nathan Vifflin, edited by Kate Entringer)
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