ABN Amro to Cut 1,500 More Jobs; Net Profit Up -- Update

By Maarten van Tartwijk

AMSTERDAM--Dutch bank ABN Amro Group NV said Wednesday it will shed another 1,500 jobs in the coming years as it accelerates restructuring efforts to reduce costs and invest in digital services.

ABN Amro said the cuts, which will result in EUR400 million ($428.9 million) extra savings, come on top of existing restructuring plans that will result in around 1,000 job losses. The measures will reduce the bank's workforce by around 13% and generate a total of EUR900 million in savings by 2020, which ABN Amro said are needed to offset higher regulatory costs and investments in digital services.

The announcement came as ABN Amro said it reported a solid performance for the third quarter, with net profit rising 19% to EUR607 million, reflecting lower loan-loss provisions and higher net interest income. Outgoing Chief Executive Gerrit Zalm, who led the bank after its nationalization in 2008 and oversaw its return to the market, said the continued restructuring efforts should make the bank "more digital and agile."

ABN Amro isn't the only Dutch bank downsizing. Local rival ING Groep NV said last month it would slash 7.000 jobs in the next few years to improve both efficiency and its digital offerings. Meanwhile, Rabobank Group is in the midst of shedding 9,000 staff.

The cutbacks highlight how banks' business models are being disrupted by more stringent capital requirements, record low interest rates and a shift to online banking. The Dutch central bank said in a recent study banks need to improve efficiency to protect profitability but the double-digit returns seen before the global financial crisis are no longer obvious."

Shares in ABN Amro fell 1.7% after the announcement, having gained around 20% since last year's initial public offering.

Write to Maarten van Tartwijk at [e-mail]

(END) Dow Jones Newswires

November 16, 2016 04:18 ET (09:18 GMT)

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