ABN Amro to quit trade, commodity financing

AMSTERDAM: ABN Amro is to end all of its trade and commodity financing operations in a shit that will see 800 jobs go at the Dutch bank as it calls time ater a string of losses in those businesses.

In a massive overhaul of its activities, ABN Amro said on Wednesday its corporate bank will retreat to northwest European markets, exiting the United States, Asia, Australia and Brazil, except for clearing operations.

The restructuring, will affect around 45% of the corporate bank’s client loans, worth 18 billion euros ($21 billion) and follows several atempts to increase the profitability and reduce risks at ABN’S corporate bank ater difficulties in the offshore energy markets saddled it with losses on its loans.

“We will serve clients in segments where we can achieve scale, so we will focus on the Netherlands and Northwest Europe, where we will invest and grow,” Chief Executive Robert Swaak said.

Several other European banks have been rethinking their trade and commodity finance operations, including Natixis and BNP Paribas, hit by losses in energy trading and a drive to focus on greener finance initiatives.

Write-offs at ABN’S corporate bank ballooned to 1.4 billion euros in the first half of 2020, up from 128 million euros a year before, as loans to the oil and gas sector soured along with the economic outlook.

Loan-loss provisions at the unit jumped to 591 million euros in the second quarter alone, due to the low oil price and a “potential fraud case” in Germany.