ABNAmro in a 29m third quarter loss
STATE-owned ABN Amro continued to be loss making in the third quarter as it prepared for a series of demerger steps that will allow the Dutch government to nurse it back to health and sell it back into private hands.
Lower asset and liability management income weighed on third-quarter earnings, offsetting a slight improvement in interest income, ABN said. Operating expenses remained stable, the lender added.
ABN AMRO made a loss of €32m (£29m), after posting a €10m loss from continuing operations in the preceding quarter, ABN said in a statement.
It said it would book a provision in the fourth quarter for the bankruptcy of smaller Dutch rival DSB Bank, due to its obligation under a deposit insurance scheme. Analysts say ABN will have to contribute at least €100m.
ABN said it was making good progress on separating itself from assets owned by Royal Bank of Scotland. It is in the process of being split from ABN Amro Group, which is jointly owned by RBS, Spain’s Santander and the Dutch state.
One roadblock to the deal was removed when the Dutch government announced a deal to sell part of ABN to Deutsche Bank. That deal is expected to generate a loss of €800m to €900m and the state is pumping €3bn in capital into ABN.
The Netherlands replaced Belgian-Dutch Fortis as a shareholder after Fortis lost investors’ confidence last year. RBS, Santander and Fortis bought ABN Amro group for €70bn in 2007 and have split up the bank.
The separation is on track, and ABN expects to complete the legal demerger in the first quarter of 2010. After the breakup, the Dutch want to combine Dutch ABN operations with Dutch Fortis banking operations and list the new bank in a few years.