ABN AMRO Bank N : Integrated Annual Report 2023

ABN AMRO Bank N.V.

Integrated

Annual Report 2023

Banking for better, for generations to come

ABN AMRO Integrated Annual Report 2023

Welcome to our 2023 Integrated Annual Report

This integrated report describes our business, strategy and performance over the past year. It also provides an overview of ABN AMRO's system of governance and approach to risk and capital management. Our previous Integrated Annual Report was published in March 2023. The purpose of this report is to explain how, over time, ABN AMRO creates value for its stakeholders.

This is ABN AMRO's main regulatory disclosure document. All financial information is prepared in accordance with the EU-endorsed International Financial Reporting Standards (IFRS). Where applicable, the report also complies with financial reporting requirements under Title 9, Book 2 of the Dutch Civil Code.

We have also applied other reporting guidelines, including the Integrated Reporting Framework. Moreover, we have chosen in this report to begin alignment with the EU Corporate Sustainability Reporting Directive (CSRD) and associated European Sustainability Reporting Standards (ESRS). We expect to make further changes and improvements to our reporting before we fully adopt these standards and as market practice evolves.

This Integrated Annual Report consists of:

• An Executive Board Report, comprising Our bank; Strategy, value creation and performance; Risk, funding and capital; Leadership and governance; Sustainability statements
• Report of the Supervisory Board
• Annual Financial Statements
• Other information

Please see the Other information chapter for further information on our approach to reporting and other legal notices. For the first time in the report, we have included Sustainability Statements, taking ESRS as a starting point. These statements detail ABN AMRO's approach to sustainability1 and emphasise the importance of sustainability to the bank's purpose, strategy and approach to compliance and risk management.

1 Reporting under ESRS is mandatory for our Integrated Annual report of 2024. ABN AMRO will publish its first ESRS-compliant report in March 2025.

Other ABN AMRO reports

ABN AMRO Bank N.V.		ABN AMRO Bank N.V.
Pillar 3 Report 2023		Abbreviations
		and definitions
		of important terms	2023

Pillar 3	Abbreviations and
Report 2023	definitions of important
	terms 2023

ABN AMRO Bank N.V.

Banking for better

Impact Report 2023

Impact Report 2023

ABN AMRO Bank N.V.

Note on methodology:

As used in the Impact Report 2023

Impact Assessment 2023:

Note on methodology

Note on the European single electronic reporting format

This is the PDF version of our 2023 Integrated Annual Report. There is also a version in the European single electronic reporting format (ESEF).

To download our ESEF reporting package, please visit www.abnamro.com/ir or contact us at [e-mail]. Please note that the ESEF version prevails in the event of any discrepancies between these two versions.

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ABN AMRO in 2023

	Net profit (in EUR millions)		Return on average equity
2,697	12%
2022: 1,867	2022: 9%
	Cost-income ratio		Net interest margin (in bps)
61%	157
2022: 69%	2022: 129
	Loans and advances		Percentage
	customers		sustainability (acceleration)
	(in EUR billions)		asset volume
246	34%
2022: 244	2022: 31%
	Percentage of women		CET1 ratio
	at sub-top		(under Basel IV)
31%	15%
2022: 31%	2022: 16%

Please see the Other information chapter for full definitions of all performance indicators.

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Our bank Strategy, value creation & performance Risk, funding & capital Leadership & governance Sustainability statements Annual Financial Statements Other Information

Table of contents

Our bank

Interview with our Chief Executive Officer	6
Who we are	9
Our operating environment	12
Our year in review	16

Strategy, value creation & performance

Our strategy	19
How we create value for our stakeholders	26
Performance on our strategy	28
Interview with our Chief Financial Officer	40
Economic outlook for 2024	50

Risk, funding & capital

Interview with our Chief Risk Officer	54
Key risk developments	56
Risk management	62
Capital	128
Management Control Statement	136
Additional risk, funding & capital disclosures	141

Leadership & governance

Leadership and governance structure	161
Supervisory Board	174
General Meeting and shareholder structure	188
Remuneration report	192
Other governance information	210

Sustainability statements

Introduction	219
Strategy and business model	222
Governance of sustainability matters	226
Risk	230
Environment	238
Social	265
Business conduct	286
EU taxonomy	292
Additional sustainability-related disclosures	307
Responsibility statement	309

Annual Financial Statements 2023

Consolidated Annual Financial Statements 2023	311
Notes to the Consolidated Annual Financial Statements	316
Company Annual Financial Statements of ABN AMRO Bank N.V.	397
Notes to the Company Annual Financial Statements of ABN AMRO Bank N.V.	400

Other Information

How we prepared this report	415
Independent auditor's report	430
Limited assurance report of the independent auditor on the non-financial
information	439
Major subsidiaries and participating interests	442
Cautionary statements	444
Enquiries	445

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Our bank

This section of the report provides an overview of ABN AMRO:

its purpose and values, where the bank operates and its approach to business.

Interview with our Chief Executive Officer	6
Who we are	9
What we do	9
How we operate	10
Where we operate	11
Our operating environment	12
Our year in review	16

ABN AMRO Integrated Annual Report 2023

Interview with our Chief Executive Officer

2024 will mark the end of your first four years as ABN AMRO's CEO and the start of your second term. How is the bank different from when you arrived back in 2020?

"We have a very different profile now. In November 2020, we made clear choices about who we wanted to be, and we have done what we said we would do. As a result, we are now a bank with a focus on the Netherlands and Northwest Europe with client and people centricity at our heart. Our purpose 'Banking for better, for generations to come' shows our long-term commitment to our stakeholders and underlines our focus on long-term value creation. As we continue to change the bank, we have to make sure that we do not leave anyone behind."

How is the bank bringing this commitment to life in day-to-day practice?

"In many, many ways. As a personal bank in the digital age, we always need to bear in mind that some clients struggle to keep up with changes in digital banking.

That is why I am very pleased that we now have an expanding pool of financial coaches who have been specially trained to support them. Another example is

our effort to promote equal opportunities for female entrepreneurs. In 2023, we launched an alliance of more than 60 leading organisations aimed at helping more women to start, fund and grow their businesses.

Our commitment to inclusion can also be seen in our climate strategy. As we work towards net zero emissions, we need to keep an eye on clients who are struggling to keep pace with the transition. Think about young couples who don't have enough money to buy an energy label-A home or small businesses that are excluded from serving customers in climate- neutral zones because they don't have the means for electrically driven vehicles. It's easy to say 'Look, we are not going to finance these activities anymore because we have to meet our climate objectives'. But if we are to make this transition a success, we need to ensure that the costs and benefits are spread fairly, so that everyone can participate. If the transition cannot be fair, the world may very well not transition at all."

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Interview with our Chief Executive Officer  |  Our bank

Robert Swaak

CEO ABN AMRO

"As we continue to change the bank, we have to make sure that we do not leave anyone behind."

Our bank Strategy, value creation & performance Risk, funding & capital Leadership & governance

How do you look back on the past year?

"2023 was very much a year of uncertainty. Geopolitical tensions increased and GDP growth was lagging, and these factors obviously translated into uncertainty for our clients. That said, it was a highly profitable year for ABN AMRO as we continued to benefit from higher interest rates and the improvement in our risk profile. We also did really well commercially. At Corporate Banking, we had a very good year because our focus on our three transition sectors - new energy, mobility and digital - continued to pay off. In terms of portfolio size, we have now completely replaced the loan book that we put into wind-down, and that is something to be very proud of. I am also happy with how our other client units performed: our mortgage book worked its way through difficult market conditions, while Wealth Management continued to position itself as

a market leader.

Another milestone this past year was the continuation of our share buyback programme. We owe investors a healthy return based on clear capital framework. I continue to value our strong capital position, which allows us to continue to operate and grow the bank, to weather crises and to do what's right for our owners,

which is to pay dividend and to return capital if and when we are able to.

The announcement of the acquisition of BUX, one of Europe's fastest growing neo-brokers was another highlight. We have always said that we are open to acquisitions that allow us to accelerate the execution of our strategy, and that is exactly what BUX does. It will strengthen the bank's IT capabilities and provide us with access to a client segment we really want to serve."

The bank's increased profitability triggered a public debate about lagging deposit rates. What's your view on this?

"Of course I understand that clients would like to earn more interest on their savings. But, as a bank, we always have to balance those needs with our responsibility to safeguard our long-term financial stability and ensure we can continue playing our key role in society. I think the discussion focuses too much on the short term. Before ECB rates started rising in 2022, we faced many years of unusually low rates. What people sometimes forget is that it was a long time before we eventually started passing on these costs to consumer clients."

Sustainability statements Annual Financial Statements Other Information

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ABN AMRO Integrated Annual Report 2023

Let's talk about the execution of your strategy. How are you progressing?

"I am pleased with the progress we have made. Over the past 3.5 years, we have de-risked the bank significantly and created a solid platform to deliver on our strategy. We have implemented a new service model that provides convenience supported by expertise at lifecycle moments to our clients and we are working to improve our client offering with more simple financial solutions. An important milestone last year was the Dutch State's decision to start reducing its shareholding again. To me, that is a sign of confidence in our strategic direction. If the State had not believed that we were on the right track, it would never have taken this step."

What else needs to happen for

ABN AMRO to become a personal bank in the digital age?

"My message is simple: we need to stay the course. First of all, we have to continue to focus on improving our Net Promoter Scores, which are still not where we would like them to be. We will also continue redesigning our digital propositions so that we are available to clients whenever and wherever they need us.

We will continue to invest in our expertise and offer the best products and services to support our clients. We will also keep investing in areas such as generative artificial intelligence; these investments allow us to optimise our internal processes while freeing up staff to serve clients better.

We also need to combine this consistency with speed of execution. We live in an ever-changing world. This means we need to execute what we say we will and do it within a timeframe that allows us to change again as necessary. If we do that, I am confident that we will be able to deliver high client and people satisfaction and contribute to the climate transition, while also returning to our shareholders what they are due.

"On top of that, we have

to continue to future-proof the bank, to maintain our cost discipline and to keep executing our climate strategy, while still staying close to our clients."

As we continue to execute our strategy, it is important for our people to feel connected to the bank and our purpose. I am very proud of our employee engagement scores in 2023, which were much better than last year. It is really thanks to our more than 20,000 colleagues that we have been able to do what we have done, and that is something I can only be grateful for. Even though the journey is by no means complete, we have created an ability for the bank to move forward."

Robert Swaak

CEO of ABN AMRO Bank N.V.

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