ABN AMRO Bank N : Roadshow booklet Q2 2019 ​ (PDF 1 MB)

Investor Relations

results Q2 2019

roadshow booklet 7 August 2019

Highlights Q2; strong financial results and operational delivery

Financials

• Strong net profit at 693m and ROE of 13.6%
• NII strong despite low interest rates
• Good operating result (C/I ratio 56.4%)
• Moderate impairments, CoR of 18bps, reflecting de-risking of portfolio and continuing strong Dutch economy
• Strong Basel III CET1 ratio of 18.0%, leverage ratio at 4.2%, Basel IV CET1 ratio stable vs. YE2018 1)
• Interim dividend : DPS EUR 0.60, 50% pay-out

Strategic

• We have been working on programmes to strengthen detecting financial crime activities
• Continuing good progress on execution of "banking for better" strategy
• Cost savings programmes and CIB refocus on track
• Focused on financial targets in a more challenging environment
• Strongly capitalised and well positioned to manage transition through TRIM and Basel IV
• Material divestments concluded, open to bolt on acquisitions

1) Capital ratios exclude the accrual of HY2019 profit

2

Fully committed to preventing and detecting financial crime

Further strengthening of CDD foundation

• Client Due Diligence (CDD) foundation in place
• CDD workforce tripled since 2013 to more than 1,000 FTEs 1), expect to increase substantially in the next few years

Foundation Client Due Diligence (CDD) in place

	Client		Know		Risk		Transaction
	Identification &		Your Client		Assessment		Monitoring
	Verification
	verify client		collect client		determine client		detecting & analysis of
	identification details		information		profile		unusual transactions

• Centralising and bolstering Detecting Financial Crime activities;
• • investing in skills, capacity and systems
  • centralising skills & expertise to enhance control, uniformity and synergies
  • developing bank wide programmes
  • using more innovation incl. artificial intelligence
  • participating in public/private partnerships for intelligence and CDD

1) FTEs in both the business and support functions

CDD remediation programmes extended to include Retail

• CDD review of main CIB portfolios, Private Bank clients and high risk retail clients undertaken in past years
• Acceleration of CDD remediation programmes in CB and ICS announced (incl. 85m provision) in Q4 2018 is making progress
• DNB has determined that we are to review all our retail clients in the Netherlands
• Consequently we will undertake further measures and extend the CDD remediation programme; we have made an additional provision of 114m
• Sanctions like for instance an instruction, fines, may be imposed by authorities
• Across the bank we will take all remedial actions necessary to ensure full compliance with legislation
• Welcome plans Dutch government to jointly combat financial crime and achieve broader cooperation

3

Good progress on execution of 'Banking for better' strategy

Sustainability	Customer experience	Future-proof bank

Support our clients' transition to	Effortless and proactive customer
sustainability as a business case	experience through client and data focus
 'Western Europe's Best Bank for	 Improving NPS by extending our lead
Sustainable Finance' (Euromoney)	in video banking for all segments
 Investments in solar: Ideematic	 Partnering with YES Corporate
(tracking) and NorSun (ultra-high	Finance, offering M&A advice to SMEs
efficiency panels) 1)	 Expanding blockchain pilot
 Front office tool to improve	'DELIVER' 2), a supply chain
sustainability dialogue with clients	management ecosystem for containers
(Casy)

Structure, capabilities and culture for competitiveness and compliance

• IT transformation on track; DevOps programme initiated
• Rationalising product portfolio (simpler, more intuitive), >50% in coming years
• Progressing to centralise, standardise and automate mid- and back-offices

Euromoney on CIB: "The Bank has been working hard not just to maintain its market share at home, but also to make sure the CIB business as a whole is sustainable in terms of its own profitability - and its impact on the environment"

1. ABN AMRO Energy Transition Fund
2. Developed in partnership with the Port of Rotterdam and Samsung SDS

4

Digitising to improve customer experience and IT cost efficiency

Video banking driving NPS and efficiency

• Clients value personal contact, video banking (VB) a substitute for physical contact at a branch
• Key enabler moving clients towards digital channels, driving operational efficiencies while improving Net Promotor Score
• ABN AMRO frontrunner in branch reductions in NL, with branches per inhabitant already lowest in Europe
• High adoption rate in Retail Banking: two-thirds of mortgage meetings, half of all meetings
• Good first adoption in PB (c.20%), rollout starting in CB

1) DevOps way of working: small teams with operations and developers working together

On track with IT transformation

• Steadily reducing IT spend to move to sweet spot of 12-13% IT C/I ratio
• Focused on demand, productivity and supply levers
• To improve productivity; shift from Agile to DevOps 1) to further automate and speed software testing and delivery
• Leads to cost reduction and increasing IT change capacity
• DevOps programme initiated and expect c. 600 teams with DevOps capabilities by 2022

Number of teams with DevOps capabilities

600

140

60

2018

2019

2022

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