ABN Amro shares jump on buyback announcement, strong earnings

By Bart H. Meijer

AMSTERDAM (Reuters) -ABN Amro shares rose to their highest level in three years on Wednesday after the Dutch lender announced a new share buyback helped by stronger-than-expected fourth-quarter earnings.

Largely state-owned ABN, one of three dominant banks in the Netherlands, said it would buy 500 million euros ($538 million) of its shares in the first half, as it reported a net profit of 354 million euros for the last three months of 2022.

Profit was down from 552 million euros a year earlier, when the results were helped by the sale and leaseback of ABN's Amsterdam headquarters, but was more than triple the 105 million euros analysts on average had predicted in a company-compiled poll.

"The beat is high-quality, as driven by stronger net interest income (10% above consensus) and lower costs," Jefferies analysts said in a note.

ABN Amro shares were up 5% at 15.35 euros in early trading to their highest in three years.

Rising rates pushed up net interest income 17% to 1.56 billion euros in the fourth quarter of 2022, while operating expenses at the bank fell 6% due to staff reductions.

Impairments were 74% lower than a year before at 32 million euros as economic growth in Europe held stronger than expected despite surging inflation.

Since its bailout by the Dutch state in 2008, ABN has refocused its operations and orientation on the Dutch market, cutting thousands of jobs in the process.

ABN Amro was re-privatized in 2015, but the Dutch state still owns 56% of the shares and has sold none since September 2017.

The state will participate in the share buyback, which has been approved by the European Central Bank and will maintain its relative stake, ABN said.

($1 = 0.9302 euros)

(Reporting by Bart Meijer; Editing by Bradley Perrett and Bernadette Baum)