ABN Amro Group has reported the value of bonds and notes issued stood at €66.5bn as of June 30, 2016, up from €64.6bn at the end of December. The total issued debt at the end of H1 2016 amounted to €76.5bn, an increase of €0.3bn or 0.4% compared with €76.2bn at December 31, 2015, according to the group's interim report which was published on Wednesday, August 17.
The increase was due to an increase of €4.2bn in covered bonds offset by a decrease of €2.4bn in unsecured medium-term notes and a decrease of €1.6bn in certificates of deposits and commercial paper, the bank said. Movements in these debt instruments 'are a continuous process of redemption and issuance of long-term and short-term funding', according to ABN Amro.
The cumulative change of the fair value of the structured notes attributable to change in credit risk amounted to €10m at June 30, 2016 (2015: €7m). The amount that ABN Amro would contractually be required to pay at maturity for all financial liabilities designated at fair value through profit or loss, was €1.7bn (2015: €1.7bn), the bank said.
Net fee and commission income, at €866m in the first half of 2016, was €60m lower than in the same period of 2015. This was related to the uncertainty and volatility in the financial markets during the first half of 2016, which negatively impacted retail banking and private banking in particular, according to ABN Amro.
Private banking's underlying profit for the period decreased to €96m in the first half of 2016, down by €63m compared with the first half of 2015. The decrease was due to a combination of lower operating income, higher regulatory expenses and loan impairment additions instead of releases, the bank said.
'We are well on track with three of our financial targets: a return on equity (ROE) of 10-13% over the coming years, a common equity tier 1 (CET1) ratio of 11.5-13.5% and a dividend payout ratio increasing to 50% over 2017,' said Gerrit Zalm (pictured), chairman of the managing board, ABN Amro Group, in a statement.
'The underlying net profit for H1 2016, which excludes an additional provision for small and medium-sized enterprises (SME) interest rate derivatives, was flat at €1.1bn. Continued growth of our capital base - the fully-loaded CET1 ratio increased to 16.2% - caused the ROE to decline to 13.1%, above the target range. We will pay an interim dividend of EUR 0.40 per share, or 45% of the reported net profit,' Zalm said.
Click the link to view the ABN Amro interim report & quarterly report.
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