The private banking arm of Dutch lender ABN Amro has reported a net profit of €66m for the first quarter of 2018, an increase of 23% compared to €53m in the previous year.
The division’s operating profit before tax for the quarter ended 31 March 2018 was €88m, a surge of 28% from €69m in the corresponding quarter of 2017.
The unit’s operating income remained stable at €333m, while operating expenses dropped 11% year-on-year to €240m.
The cost/income ratio of the private banking unit was 72% at the end of March 2018, as against 80.4% last year.
Client assets at the end of March 2018 totalled €200.1bn, with €3.6bn of net new assets.
Overall, the banking group posted a net profit of €595m for the first quarter of 2018, down 3% compared to €615m reported in the same period last year. The group attributed the fall in profit to higher impairments that totalled €208m.
ABN Amro CEO Kees van Dijkhuizen said: “We saw a solid start to the year with net profit coming to €595m, reflecting a strong increase in our operating result, offset by high impairments. Net interest income remained strong, benefiting from loan growth, especially in Dutch SMEs and corporate loans. The underlying cost trend in Q1 continues to benefit from cost savings. Impairments were high this quarter due to provisions for specialised loans in a few specific sectors. Impairment provisions for offshore service and offshore shipping clients were elevated as recovery is still fragile in these sectors.
“The cost/income ratio improved from 60.2% to 57.9%. The return on equity decreased from 13.2% to 11.5% and our capital position remained strong with a fully loaded CET1 ratio of 17.5%, including the First Time Adoption impact for IFRS 9.”