The Dutch bank says provisions could rise to €2.5bn for the full year due to exposure to two clients, with Covid-19 making repayments harder
Amsterdam — ABN Amro Bank’s new CEO will review the bank’s strategy after the Dutch lender posted its first loss since 2013 and set aside almost twice as much as expected to cover future loan losses.
“The ongoing corporate and investment banking review is a short-term priority for me,” Swaak said in a statement on Wednesday. Despite recent improvements, “this has not resulted in the required profitability. Also the risk profile of parts of the CIB is not fully aligned with that of the bank”. The investment bank is tied to losses that compound the company’s challenges in dealing with the pandemic. ABN Amro announced a one-time profit hit at the end of March, when it reported a $200m net loss at its clearing business, after a US client failed to meet risk and margin requirements amid market volatility caused by the pandemic.
The Frankfurt-based bank said on Wednesday that €185m of its €326m in credit provisions was directly related to the pandemic, while the crisis also caused a hit of €295m in the value of customer derivatives. The Dutch lender made a claim in April against a Singapore oil trading giant that filed for protection from creditors. Hin Leong Trading owes almost $4bn to more than 20 banks.
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