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MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  ABN AMRO Bank N.V.    ABN   NL0011540547

ABN AMRO BANK N.V.

(ABN)
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ABN Amro exits trade, commodity finance in corporate bank shake-up

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08/12/2020 | 03:37am EDT
ABN AMRO logo is seen at the headquarters in Amsterdam

ABN Amro is to end all trade and commodity financing after a string of losses, in a massive overhaul of its activities that will see the Dutch bank cut 800 jobs.

Shares in ABN, which had lost almost half their value this year, were up 6.8% at 0925 GMT after it said its corporate bank will retreat to northwest Europe, exiting the United States, Asia, Australia and Brazil, except for clearing operations.

"We are over-exposed to global sectors and we had more than our fair share of exceptional client files", Robert Swaak, who became chief executive in April, told reporters on Wednesday.

ABN, in which the Dutch state still has a 56% stake, will focus on areas where it has significant scale, he added, including local energy markets, where the European Union's "green deal" is expected to lead to huge demand for finance.

The restructuring will affect around 45% of client loans, worth 18 billion euros (16 billion pounds) and follows several failed attempts to increase the profitability of the corporate bank, which has grappled with losses in offshore energy markets.

"Finally what we wanted", Barclays analysts wrote in a note.

Several other European banks have been rethinking their trade and commodity finance operations, including Natixis and BNP Paribas after energy trading losses and a shift to greener finance initiatives.

IMPAIRMENTS

Write-offs at ABN's corporate bank hit 1.4 billion euros in the first half, up from 128 million euros a year before, as oil and gas sector loans soured along with the economic outlook and large Asian clients got into trouble.

In China, ABN was lead arranger of a $430 million (329 million pounds) syndicated loan for two companies under the Fangyuan group, which had liquidity problems last year.

It also had nearly $300 million in outstanding loans to Singapore-based Hin Leong Trading, whose founder admitted to hiding hundreds of millions of dollars in losses.

"This has been the higher risk and more volatile part of the bank, which is why we are choosing to wind it down", Chief Financial Officer Clifford Abrahams told Reuters.

The clearing and European parts which ABN aims to keep, however, were not without their own problems as impairments jumped to 591 million euros in the second quarter.

This was partly due to a "potential fraud case" in Germany, where ABN had a significant exposure to Wirecard.

ABN took a $200 million first quarter loss on clearing after a U.S. hedge fund missed its margin requirements.

ABN said impairments led to an overall net loss of 5 million euros in the second quarter, which was not as bad as analyst expectations for a loss of 46 million euros.

(Reporting by Bart Meijer; Additional reporting by Tom Daly in Beijing and Roslan Khasawneh in Singapore; Editing by Tom Hogue, Stephen Coates, Louise Heavens and Alexander Smith)

By Bart H. Meijer

Stocks mentioned in the article
ChangeLast1st jan.
ABN AMRO BANK N.V. -1.44% 7.134 Delayed Quote.-55.52%
NATIXIS -2.76% 1.9235 Real-time Quote.-50.05%
WIRECARD AG 1.43% 0.7865 Delayed Quote.-99.27%
WTI -0.74% 40.318 Delayed Quote.-34.65%
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Financials
Sales 2020 7 849 M 9 136 M 9 136 M
Net income 2020 -516 M -600 M -600 M
Net Debt 2020 - - -
P/E ratio 2020 -13,1x
Yield 2020 0,66%
Capitalization 6 356 M 7 385 M 7 399 M
Capi. / Sales 2020 0,81x
Capi. / Sales 2021 0,82x
Nbr of Employees 18 684
Free-Float 46,9%
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Technical analysis trends ABN AMRO BANK N.V.
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Income Statement Evolution
Consensus
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Mean consensus HOLD
Number of Analysts 22
Average target price 10,16 €
Last Close Price 6,76 €
Spread / Highest target 181%
Spread / Average Target 50,3%
Spread / Lowest Target -26,1%
EPS Revisions
Managers
NameTitle
Robert Swaak Chairman-Executive Board & Chief Executive Officer
Tom de Swaan Chairman-Supervisory Board
Clifford Abrahams Vice Chairman-Executive Board & CFO
Christian Bornfeld Chief Innovation & Technology Officer
Jurgen Stegmann Member-Supervisory Board
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