Bloomberg
ABN Amro Group, the state-owned Dutch lender preparing for a share sale next year, will cut as many as 1,000 jobs by 2018 and shrink its branch network as customers move to banking on their phones.
The lender will invest about €150mn ($186mn) through 2018 in information technology to improve mobile banking services, it said in a statement yesterday. The bank, based in Amsterdam, said it will take a provision of €50mn to €75mn in the fourth quarter as the project will result in 650 to 1,000 job losses.
ABN Amro, which also reported a 56% increase in quarterly earnings as the nation’s economy improved, follows bigger peers ING Groep and Rabobank Groep in saying thousands of jobs will disappear as Dutch customers move to mobile banking faster than elsewhere in Europe. One of every four people in the Netherlands use banking services on their phone or laptop, ABN said on November 12.
The bank has about 5mn Dutch customers, less than half of whom have been inside a branch in the past 24 months, chief financial officer Kees van Dijkhuizen told reporters on a conference call yesterday. That compares with 1.5mn visits a day to the bank’s mobile application, he said.
“That’s the background to this operation,” he said. “This is not related to us having a good or bad quarter.”
Cutting 1,000 jobs would be more than 4% of the firm’s 22,242 employees at the end of September. Total employment has dropped by 3,928 from the end of 2010.
The lender, established in its current form after the collapse of Fortis in 2008, is seeking to show it’s an attractive investment as the Dutch government contemplates whether to go ahead with an initial public offering in 2015.
Return on equity, a measure of profitability, increased to 11% in the first nine months, from 7.9% in the year-earlier period. That’s in line with the bank’s 2017 target of 9% to 12%. ABN Amro will pay the state a dividend of €125mn over the first half, it said yesterday.
Finance Minister Jeroen Dijsselbloem, seeking to recoup as much as possible of the €22bn the Netherlands invested in the lender, said last year he plans to sell the first stake in the bank in 2015 if conditions are right. He said last month that he planned to inform parliament of his decision around the end of this year.
The bank today said third-quarter profit excluding one-time items rose 56% to €450mn as net interest income rose 15%. Impairments fell 17% to €287mn, mainly as bad-loan provisions for mortgages and other consumer loans dropped as the Dutch economy improved.
Dutch gross domestic product increased 1.1% in the third quarter compared to a year earlier, the nation’s statistics bureau said yesterday, adding that the recovery remains “fragile.”
ABN Amro, the third-biggest lender in the Netherlands, was formed after the state took over the Dutch banking and insurance units of Fortis, which had joined a €71.9bn takeover of the former ABN Amro Holding with Royal Bank of Scotland Group and Banco Santander in 2007.