Company Reports

ABN Amro entered 2026 with a clear strategic agenda: Shift capital away from corporate banking and toward the higher-returning retail and wealth franchises. The corporate bank’s share of group capital was targeted to fall to around 50% from 58%, a level it had nearly reached by mid-2026, with noncore assets wound down and client selection tightened. The freed-up capital is meant to fund growth in retail banking and wealth management, where returns are substantially higher.

ABN Amro delivered a 32% increase in pretax profits for the second quarter of 2026—beating consensus expectations by 18%. It is running ahead of most of its 2028 targets already.

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks.

European banks have declined around 10% from their highs as rising oil and gas prices and the prospect of higher-for-longer interest rates fuel fears that loan defaults will rise.

ABN Amro held a capital markets day in late 2025, setting out a plan to redirect capital away from corporate banking and toward its higher-returning retail and wealth franchises. We have reassessed ABN Amro’s competitive position in light of the plan and its recent fiscal 2025 results.

ABN Amro entered 2025 with a clear strategic agenda: Shift capital away from corporate banking and toward the higher-returning retail and wealth franchises. The corporate bank’s share of group capital is targeted to fall from around 60% to closer to 50%, with noncore assets wound down and client selection tightened. The freed-up capital is meant to fund growth in retail banking and wealth management, where returns are substantially higher.

ABN Amro's third-quarter net profit fell 11% year on year, weighed down by lower interest rates, while profitability continues to benefit from abnormally low credit costs. The bank also announced plans to acquire Dutch rival NIBC for EUR 1 billion.

ABN Amro’s second-quarter earnings beat FactSet-compiled estimates but fell 6% year on year and 2% sequentially. The bank announced its long-delayed share buyback of EUR 250 million, half the size we had expected. Shares dropped nearly 8% on the Aug. 6 market open.

After emerging from outright government ownership, ABN Amro is one of the simplest banks in Europe. It is essentially a retail and commercial bank with limited capital markets activities. Its strong retail deposit base supported above-average profitability until negative interest rates started to bite. Having a lending book dominated by fixed-rate mortgages did not help either. The long-duration lending book forces ABN Amro to use more expensive long-term funding to manage liquidity risk, which compounds margin pressure in a declining interest-rate environment.

After emerging from outright government ownership, ABN Amro is one of the simplest banks in Europe. It is essentially a retail and commercial bank with limited capital markets activities. Its strong retail deposit base supported above-average profitability until negative interest rates started to bite. Having a lending book dominated by fixed-rate mortgages did not help either. The long-duration lending book forces ABN Amro to use more expensive long-term funding to manage liquidity risk, which compounds margin pressure in a declining interest-rate environment.

ABN Amro's first-quarter 2025 net profit fell 8% year on year. As expected, salary hikes pushed operating expenses up 4%, amplifying a slight revenue dip. Results beat company-compiled consensus by 6%—entirely due to lower-than-expected credit costs.

Narrow-moat ABN Amro reported a net profit of EUR 690 million for the third quarter of 2024, 12% lower than a year earlier, but 23% higher than company-compiled consensus. While the release of loan-loss provisions played a vital role in the earnings beat, revenue growth was also better than expected. ABN Amro has generated a return on equity of 11% for the first nine months of 2024, ahead of its 2026 target of 9%-10%. However, profitability currently benefits from ultralow loan-loss provisions and is arguably above through-the-cycle levels.

Narrow-moat ABN Amro reported roughly stable year-over-year and quarter-over-quarter earnings for the second quarter, comfortably ahead of the company-compiled consensus. Releases from loan-loss provisions were the main driver of the earnings beat, which we don’t think the company can maintain. ABN raised its net interest income guidance for fiscal 2024 slightly to EUR 6.4 billion from EUR 6.3 billion, with its cost guidance unchanged at EUR 5.3 billion. ABN remains one of the European banks with the greatest gearing to the interest-rate cycle. Still, fee income has steadily grown, and recent acquisitions support further revenue diversification, placing it in a better position for future lower interest rates. Although CEO Robert Swaak's recently announced departure was unexpected, we do not expect a change in strategy. We updated our model to incorporate new NII guidance, labor agreement changes, and restructuring provisions. Still, the net impact was negligible, and we kept our fair value estimate unchanged at EUR 21/share.

After emerging from outright government ownership, ABN Amro is one of the simplest banks in Europe. It is essentially a retail and commercial bank with limited capital markets activities. Its strong retail deposit base supported above-average profitability until negative interest rates started to bite. Having a lending book dominated by fixed-rate mortgages does not help either. The long-duration lending book forces ABN Amro to use more expensive long-term funding in order to manage liquidity risk, which then compounds margin pressure in a declining interest-rate environment.

Narrow-moat ABN Amro announced the purchase of German private bank Hauck Aufhäuser Lampe on May 28. The purchase will strengthen ABN Amro's existing presence in the German wealth management market. We estimate the deal will add around 5% to ABN Amro's earnings, including synergies. We tend to view wealth management as a moaty business and HAL's mid-double-digit historical returns on equity suggest a competitive advantage. ABN Amro's revenue mix is heavily skewed to net interest income, which can be volatile and capital-intensive. The deal will lead to a modest increase in the contribution of stable, low-capital-intensity fee income to ABN Amro's revenue mix. ABN Amro will use some of its excess capital to fund the cash purchase price of EUR 672 million. The purchase price is roughly equal to HAL's tangible book value and around 10 times its presynergy earnings. If ABN Amro can deliver its targeted EUR 60 million of synergies, it would imply a 5 times price/earnings multiple. We think these are modest multiples for an acquisition that will immediately enhance profitability and is an excellent strategic fit.

Narrow-moat ABN Amro posted strong results for the first quarter of 2024, beating company-compiled consensus on almost every line item. Net profit reached EUR 674 million, 29% above the comparable period a year earlier and 29% above the consensus estimate. Net interest margin has been a focus area for investors and ABN Amro delivered a 162-basis-point NIM. Stronger-than-expected loan volume growth drove net interest income higher than expected. Good cost discipline led to a 57% cost/income ratio, below the bank’s 2026 target of 60%. Credit quality remains sound with stable nonperforming loans reported. The only blemish in the results was an unexpected 50-basis-point decline in the common equity Tier 1 Basel III ratio to 13.8% due to model changes. We still model a 14.6% fully loaded CET 1 for 2024 after considering a EUR 500 million buyback and 50% dividend payout. Despite a solid start to the year, ABN Amro did not increase its guidance for the full year, which shows us that the second half of the year could be more challenging. We maintain our fair value estimate of EUR 21 per share and believe ABN Amro is undervalued.

After emerging from outright government ownership, ABN Amro is one of the simplest banks in Europe. It is essentially a retail and commercial bank with limited capital markets activities. Its strong retail deposit base supported above-average profitability until negative interest rates started to bite. Having a lending book dominated by fixed-rate mortgages does not help either. The long-duration lending book forces ABN Amro to use more expensive long-term funding in order to manage liquidity risk, which then compounds margin pressure in a declining interest-rate environment.

Narrow-moat ABN Amro reported a 58% year-on-year increase in net profit for fourth-quarter 2023. Reported net profit for the quarter came in substantially ahead of our expectations, but the outperformance was largely due to an unexpected loan-loss provision release. Provision releases are naturally not a maintainable source of profit growth. We welcome the greater clarity around ABN Amro’s capital targets. We believe ABN Amro will increase its share buybacks from 2024 above the new EUR 500 million buyback program announced on Feb. 14. Given the pressure that some European banks expect on the NII line in the face of lower interest rates, we view the guidance of flat NII for 2024 as positive. Cost guidance is less bullish than before. We maintain our fair value estimate of EUR 21 per share and narrow moat rating, but will update our model shortly to incorporate the new guidance from ABN Amro.

Narrow-moat ABN Amro reported earnings/share of EUR 0.85 for the third quarter of 2023, slightly ahead of the EUR 0.80/share recorded a year earlier and materially ahead of the company-compiled consensus estimate at EUR 0.66/share. However, net interest income came in below expectations, disappointing the market, and the ABN Amro share price declined by 9% on Nov. 8. We are puzzled by this reaction. We already highlighted our view that NIM expansion peaked in our comment on the previous quarter's results. As expected, there were no further details on the return of excess capital. ABN Amro previously indicated that they will only update the market about their capital strategy at the beginning of next year.

The lower house of the Dutch parliament approved proposals for higher bank taxes and measures to eliminate the difference between withholding taxes on dividends and share buybacks. We estimate that the increase in Dutch bank taxes implies a 2% hit to our 2023 earnings estimates for ABN Amro and ING. The tax treatment of withholding taxes differs according to investors' residency and tax status and should not directly influence our valuation for ABN Amro and ING. However, we are concerned that continued European regulatory and government intervention will lead to higher risk premiums and lower valuations for banks. We recently had the opportunity to speak to several U.S. institutional investors and the risk of increased government/regulatory intervention in European banks was a topic that came up in all our discussions. The Dutch proposals follow windfall taxes on Italian and Spanish banks and the pandemic-related dividend distribution ban.