(Nov 25): ABN Amro Bank NV plans to cut almost 20% of its workforce as new chief executive officer Marguerite Berard seeks to boost profitability.
The net reduction of 5,200 full-time roles compared to last year’s headcount is anticipated to be completed over the next three years, and half of it will take place through attrition, the Dutch lender said in a statement on Tuesday.
“We know that more must be done to enhance our returns and competitiveness,” Berard said in the statement.
ABN Amro’s shares rose as much as 4.5% in early trading in Amsterdam. They have gained about 86% this year.
Berard, who succeeded Robert Swaak in April to became the bank’s first female chief, has vowed to cut costs and optimise capital allocation to boost profitability. She’s already kicked off the restructuring at the Amsterdam-headquartered lender, resulting in a reduction about 1,000 full-time roles this year, and earlier this month announced the biggest acquisition by ABN Amro since it was re-listed on the stock exchange a decade ago.
The Dutch bank will seek to boost return on equity to at least 12% in 2028 while targeting a cost-income ratio below 55%, according to the statement ahead of its capital markets day on Tuesday.
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Berard wants to boost mortgage lending and wealth management at ABN Amro. The firm also wants to get rid of “unprofitable exposures”. On Tuesday, the bank also said it has reached an agreement to sell its Alfam subsidiary, a personal loan business, to Rabobank.
ABN Amro said it will shrink the corporate banking unit’s share of overall risk-weighted assets, which determine a lender’s capital strength, to about 50%. The division’s risk-weighted assets will be cut by €10 billion (US$11.5 billion or $15 billion), partly by enhancing the quality of underlying data, the bank said.
“Our plan is really grounded in all our business units,” Berard said in an interview, citing the potential to increase collaboration between the corporate bank and the wealth business.
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The previously announced €960 million deal to acquire NIBC Bank from Blackstone Inc will increase ABN Amro’s scale in the Netherlands. The bank also recently completed the acquisition of German wealth manager Hauck Aufhäuser Lampe AG.
The bank said on Tuesday that it aims to pay out as much as 100% of the capital it generates from 2026 to 2028. The lender wants to maintain its CET1 ratio, a key measure of financial strength, above 13.75%.
The job cuts will come out of a headcount base of 27,500, including staff from acquired companies. The bank said it will support those staff who lose their jobs “with a robust social plan, offering financial support and assistance in finding new opportunities.”
The lender’s operations are being simplified by reducing the number of legal entities, digitalising processes, phasing out of legacy systems and the use of artificial intelligence, according to the statement.
ABN Amro also set a target of boosting revenue to more than €10 billion by 2028. Its new goals include strengthening its position in Dutch retail banking and becoming a “top-five private bank” in Europe.
Berard, a former BNP Paribas SA executive, is steering the lender as the Dutch state continues to reduces its stake. The government seeks to cut its holding in ABN Amro to about 20%, from 30.5% previously, it said in September.
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