First Half Results 2005

Transcription

1 First Half Results 2005 Net profit up 9.8 compared with first half 2004 Tom de Swaan Chief Financial Officer, Member of the Managing Board Amsterdam/London, 1 August 2005

2 Group operating income rose by 8.1 due to continuing growth in C&CC Operating income ABN AMRO* (EUR mln) Operating income per (S)BU (H1 2005, EUR mln, y-o-y ) C&CC: H1 04 H NL NA BR NGM BF WCS PE PC AM GF *All figures are excl. consolidation effect controlled investments of BU Private Equity Decline operating income Group Functions (GF) was due to absence of the gain on sale of our stake in Bank Austria (EUR 115 mln) booked in Q

3 7.2 increase in expenses, mainly due to higher costs in BU NL and BU Brazil Expenses per (S)BU (H1 2005, EUR mln, y-o-y ) Increase in expenses in BU NL, mainly caused by costs related to the CLA, partly of a one-off nature Sharp increase in expenses BU Brazil, mainly due to appreciation Brazilian real NL NA BR NGM BF WCS PE PC AM GF Increase in expenses at WCS on the back of higher IT expenses and higher bonuses, reflecting improved net performance Increase in expenses Group Functions due to rising costs related to compliance, audit, Sarbanes Oxley and Basel II. 35

4 Group operating result up by 10.5, reflecting strong performance of C&CC Operating result per (S)BU (H1 2005, EUR mln, y-o-y ) 150 C&CC: NL NA BR NGM BF WCS PE PC A M GF 36

5 Lower provisioning due to releases and improvement of quality of loan portfolio WCS benefited from releases, primarily in loan portfolios of North America and EMEA Provisions in BU NA came down, due to an unusual low level of gross provisions and ongoing recoveries in the commercial banking portfolio Provisions in BU NL up, mainly related to the strong increase in RWAs Provisions in BU Brazil up due to an increase in delinquency rates in the consumer portfolio in the second quarter Loan loss provisions per (S)BU (EUR mln) Provisioning H1 04 H1 05 Change BU NL BU NA BU Brazil BU NGM Bouwfonds WCS Other ABN AMRO Annualised provisions / RWA () Q04 3Q04 4Q04 1Q05 2Q05 C&CC WCS ABN AMRO PC+AM&T 37

6 ROE and EPS impacted by pre-funding of BAPV Return on Equity (ROE, ) Earnings per Share (EPS, EUR) H1 05 ROE 0.90 H1 04 H1 05 EPS 38

7 Interim dividend und Dividend (EUR) Dividend yield H1 05 Interim Dividend Final Dividend Dividend yield (dividend/average share price) 39

8 Second quarter operating performance

9 Net profit increased by 10.3 in the second quarter of 2005 (EUR mln) Q Q Quarterly Year to date * H H * Total operating income 4,840 4, ,285 8, Operating expenses 3,406 3, ,502 6, Operating result 1,434 1, ,783 2, Provisioning loan losses (37.4) (46.6) (48.2) (56.2) Net operating profit 1, ,918 1, Net profit** ,882 1, Net profit ,882 1, *At constant forex rates; ** Excluding discontinued operations All figures are excluding consolidation effect of controlled private equity holdings Operating income up due to improved performances of C&CC and WCS Operating expenses up, mainly due to higher expenses in C&CC, WCS and Group Functions Operating result up due to improved performance of C&CC and WCS 41

10 Continuing solid performance C&CC, driven by BU NL and BU Brazil (EUR mln) Q Q Quarterly Year to date * H H * Total operating income 2,821 2, ,388 4, Operating expenses 1,823 1, ,470 3, Operating result ,918 1, Provisioning loan losses Net operating profit , Net profit , * At constant forex rates: Operating income up by 9.9, mainly due to rise in BU NL and BU Brazil Operating income BU NL benefited from loan growth and higher volumes and margins in savings products Operating income BU Brazil benefited from the growth of the retail loan portfolio Operating expenses up, mainly due to increase in BU NL and BU Brazil 42

11 BU NL Quarterly Year to date (EUR mln) Q Q H H Total operating income ,838 1, Operating expenses ,348 1, Operating result Provisioning loan losses Net operating profit Net profit Efficiency ratio Staff (fte) 20,078 20, ,078 Risk-weighted assets (in bln) Please note that the operating income and expenses were impacted by the transfer of Stater (mortgage processing business) to BU NL from 1 January

12 Further improvement operating result and efficiency ratio BU NL Efficiency ratio ()* Operating result (EUR mln)** H Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Dutch GAAP IFRS * 2003 is adjusted for sale of insurance business to Delta Lloyd (EUR 111 mln) and for the revenues related to the release of retained credit spreads related to the Amstel securitisation programme (EUR 120 mln), 2004 for GSS charge (EUR 287 mln) and H1 05 for interest income incidental ** Q2 05 adjusted for interest income incidental (EUR 45 mln) 44

13 BU NA (EUR mln) Q Q Quarterly Year to date * H H * Total operating income (3.7) Operating expenses (1.3) 2.6 Operating result (5.5) (10.2) Provisioning loan losses 2 5 (60.0) (64.0) 7 52 (86.5) (86.0) Net operating profit (2.5) Net profit (2.0) Efficiency ratio Staff (fte) (0.0) Risk-weighted assets (in bln) * At constant forex rates: 45

14 Higher income BU NA driven by solid commercial banking results Operating income commercial banking (USD, Q1=100) Commercial loans (USD mln) and spreads () Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q

15 BU Brazil (EUR mln) Q Q Quarterly Year to date * H H * Total operating income , Operating expenses Operating result Provisioning loan losses Operating profit before tax Regular taxes Cayman taxes 38 (1) 37 (20) Net operating profit (34.1) (0.2) (14.1) (2.3) Net profit (34.9) (13.9) (1.4) Efficiency ratio Staff (fte) 26,658 26,848 (0.7) 26,658 Risk-weighted assets (in bln) * At constant forex rates: 47

16 BU Brazil continues its good performance due to strong loan growth & strict cost control Retail loans (BRL mln) and interest spread () Changes in expenses and inflation Brazil (H1=100) Loan growth: H1 05 / H1 04: Q2 05 / Q1 05: Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q H1 04 H1 05 Retail loans (avg. balances) Interest spread Change in expenses at constant exs Inflation * Retail= Individuals and SME 48

17 BU NGM (EUR mln) Q Q Quarterly Year to date * H H * Total operating income Operating expenses Operating result Provisioning loan losses Net operating profit (4.5) Net profit (4.5) (14.0) (11.5) Efficiency ratio Staff (fte) 5,020 4, ,020 Risk-weighted assets (in bln) * At constant forex rates: Please note that the operating income and expenses were impacted by the transfer of Stater (mortgage processing business) to BU NL from 1 January

18 Fast growth in NGM Asia underpinned by ongoing customer growth Revenue development NGM Asia (EUR mln) Customer and credit card development NGM Asia (in thousands) ,000 2,500 2, ,500 1, Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q Q1 04 Q2 04 Q3 04 Q4 04 Q2 04 Q2 05 Operating income Credit cards Customers 50

19 Bouwfonds Quarterly Year to date (EUR mln) Q Q H H Total operating income Operating expenses Operating result (8.9) Provisioning loan losses (2) Net operating profit (7.4) Net profit (7.5) Efficiency ratio Staff (fte) 2,075 1, ,075 Risk-weighted assets (in bln)

20 Growth of operating income Bouwfonds driven by improved results property development Income development Bouwfonds (EUR mln) Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Interest income Other income Total operating income Steady development of net interest income is a reflection of strong mortgage refinancing activities. Quarterly increase in net interest income due to reclassifications Second quarter increase in other income reflects improved results in residential property development The transfer of the mortgage activities of Bouwfonds to the BU NL will be effective from 1 January

21 Improved results WCS in Q2 05, but first half return needs to be further improved (EUR mln) Q Q Quarterly Year to date * H H * Total operating income 1,299 1, ,425 2, Operating expenses 1,135 1, ,214 2, Operating result (15.9) (22.0) Provisioning loan losses (74) (57) (131) 33 Net operating profit Net profit Efficiency ratio Risk weighted assets (in bln) * At constant forex rates: Improved results primarily driven by the strong performance of structured derivatives, one of the key growth areas for WCS, and fixed income origination Higher expenses primarily driven by higher bonus accruals on the back of the improved performance of WCS in the second quarter 53

22 15.4 revenue increase WCS due to improvement in all value centers Operating income and results (EUR mln) Breakdown of revenues per value centre (EUR mln) Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Commercial Banking FIFF* Equities & Investment Banking Q1 05 Q2 05 Operating income Operating result *FIFF (Fixed Income, Futures and FX) includes fixed income trading activities, structured derivatives, futures and foreign ex 54

23 Fair market value s main reason for decline in income BU Private Equity (EUR mln) Q2 2005* Q Q Quarterly Year to date H H Total operating income (15.0) (5.4) Operating expenses (16.9) Operating result (33.3) (1.2) Provisioning loan losses (1) (1) (75.0) Net operating profit (22.2) Net profit (18.1) Efficiency ratio * Including consolidation effect of private equity holdings; Total operating income down primarily driven by a decrease in results from financial transactions Operating expenses up due to a non-recurring catch-up of cross-(s)bu charges 55

24 BU Private Clients shows steady growth despite weak financial markets (EUR mln) Q Q Quarterly Year to date * H H * Total operating income Operating expenses Operating result (1.2) (1.4) Provisioning loan losses (1) (1) (2) 2 Net profit (1.6) (1.9) Efficiency ratio Staff (fte) 4,003 3, ,003 Risk-weighted assets (in bln) Assets under adm. (in bln) * At constant forex rates: Operating income increased by 2.4, driven by higher net interest income 6.0 increase net interest income due to growth in average client balances Other revenue remained stable, mainly due to weak financial markets performance (in the US in particular) over the preceding quarter 56

25 Good results BU AM due to in asset mix towards more profitable products (EUR mln) Q Q Quarterly Year to date * H H * Total operating income Operating expenses Operating result Net operating profit Net profit Efficiency ratio Staff (fte) 1,678 1,934 (13.2) 1,678 Risk-weighted assets (in bln) (41.2) 1.0 Assets under adm. (in bln) * At constant forex rates: Results BU Asset Management positively impacted by net gain on sale of trust business in Q2 05 (EUR 17 mln) Operating income (adjusted for gain) up by

26 Summary

27 ABN AMRO is well positioned for sustainable profitable growth Continued strategic discipline - focus on mid-market segments Disciplined approach to capital Disciplined approach to raise returns of WCS Disciplined approach to deliver at least EUR 600 mln savings by 2007 Average ROE of 20 and top five TRS as targets for

28 Cautionary Statement regarding Forward-Looking Statements This announcement contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in this document that expresses or implies our intentions, beliefs, expectations, forecasts, estimates or predictions (and the assumptions underlying them) is a forward-looking statement. These statements are based on plans, estimates and projections, as they are currently available to the management of ABN AMRO Holding N.V.. Forward-looking statements therefore speak only as of the date they are made, and we take no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, without limitation, the conditions in the financial markets in Europe, the United States, Brazil and elsewhere from which we derive a substantial portion of our trading revenues; potential defaults of borrowers or trading counterparties; the implementation of our restructuring including the envisaged reduction in headcount; the reliability of our risk management policies, procedures and methods; s resulting from the acquisition of Banca Antonveneta, including the risks associated with its business, as well as the difficulties of integrating its systems, operations functions and cultures with ours; and other risks referenced in our filings with the U.S. Securities and Ex Commission. For more information on these and other factors, please refer to our Annual Report on Form 20-F filed with the U.S. Securities and Ex Commission and to any subsequent reports furnished or filed by us with the U.S. Securities and Ex Commission. The forward-looking statements contained in this announcement are made as of the date hereof, and we assume no obligation to update any of the forward-looking statements contained in this document. 60