Analyst Note
| Johann Scholtz |Narrow-moat ABN Amro reported EPS of EUR 0.56 for the first quarter of 2023, nearly double what it recorded a year earlier and 52% higher than the final quarter of 2022. Higher net interest margins were the main driver. The base for the rest of the year is more challenging, but we still expect robust growth. However, NIM expansion will slow as competitive pressures on deposit and lending margins intensify. The future drivers of top-line growth for ABN Amro are less evident. That said, it mystifies us that shares continues to trade nearly 20% below their peak in March. The ongoing turmoil in the U.S. regional banking sector has not hit ABN Amro's operations, with very sound liquidity and no sign of asset-quality issues. We expect to increase our fair value estimate of EUR 17 by around 10%.