ABN Amro warns of loss in the first quarter, scraps dividend

AMSTERDAM: Dutch bank ABN Amro said yesterday that it expected the economic impact of the coronavirus pandemic to drive it to a loss in the first quarter, while it scrapped dividend payouts until at least Oct 1.

ABN Amro said last week that its clearing business had suffered a net loss of around $200 million during the market turmoil sparked by the pandemic.

It added that the economic fallout of the fight against the coronavirus had significantly increased its costs overall, which would lead to a loss in the first three months of the year.

Following similar moves by the other two big banks in the Netherlands, ING Group and Rabobank, ABN said it would follow the European Central Bank’s advice to scrap dividend payouts until at least Oct 1, to bolster its capital position.

The ECB told euro zone banks on Friday to skip dividend payments and share buybacks until the start of October at the earliest and to use capital instead to weather losses and to improve their ability to lend.

ING said yesterday that it had taken its proposal for the dividend for 2019 off the agenda for its upcoming shareholders meeting and did not expect to pay an interim dividend over 2020.

Any announcement on further dividend payments would be reviewed after Oct 1, the bank said.

“These are extraordinary times for all of us,” ING chief executive Ralph Hamers said.

“While we are well capitalised and funded, we think it is prudent to follow the ECB’s recommendations, enabling us greater flexibility to support our customers and society in this crisis and work together with governments and regulators towards a recovery.”

Hamers is set to leave ING at the end of June to become CEO of Swiss bank UBS Group AG.

His new employer on Sunday said that it was sticking to its previously announced dividend for 2019, despite markets supervisor FINMA urging it to reconsider the payout.