ABN AMRO sees some cheer as loss rises

However, after some 1.4bn euros (1.21bn) in costs arising from the mandatory sale of part of the Dutch commercial bank, separation, integration and restructuring, it had a net loss of 627m euros, versus a profit of 352m euros a year ago.

The Dutch state pumped about 24bn euros into ABN AMRO and Fortis after the dramatic failure of a three-pronged hostile takeover of ABN AMRO in 2007 by Royal Bank of Scotland, Fortis and Banco Santander.

Their bid trumped an agreed bid by Barclays backed by Bank of America, but the funding costs proved too high in the ensuing economic downturn and credit crisis.

The group is made up of the ABN AMRO and Fortis Dutch retail banking activities, as well as commercial and merchant banking services for Dutch firms, and private banking units in 13 countries with a growth focus on Asia.

"ABN AMRO is well on its way to improve the reported and underlying profitability of the bank as synergies will start to emerge from now on and integration costs will start to decline," chief executive Gerrit Zalm, a former finance minister, said in a statement.

"ABN AMRO Bank and Fortis Bank Nederland merged on July 1, 2010. It is very encouraging to see the positive reactions so far from staff and customers alike," he added. The bank said loan impairments fell 47 per cent on the back of an improving Dutch economy, while impairments on the mortgage portfolio were marginally lower. Staff numbers were down 10 per cent. The state has all the ordinary shares and most of the preference shares.

The Dutch group has roots going back to 1720. Five years ago it had a global network including a big US presence, but it was frustrated in its efforts to expand into Italy. The bank said it carefully monitored new regulatory developments like Basel III.