(Bloomberg) --

ABN Amro posted a worse-than-expected 20% decline in first-quarter profit as negative interest rates in Europe and Brexit preparations weighed on income from lending.

Net income fell to 478 million euros from 595 million euros a year earlier, the company said Wednesday. Analysts polled by the bank had expected a profit of 499 million euros. Income from lending was impacted by 40 million euros from increasing non-euro funding in preparation for Brexit.

Key Insights

• Net interest income, by far the largest source of earnings, fell to 6%, highlighting the impact of the low interest rate environment and competition from new players in the Dutch mortgage market.
• The cost-to-income ratio worsened to 64% from 58% a year earlier. Costs have been rising as the bank steps up compliance and controls following money laundering scandals that engulfed much of Europe’s financial industry.
• The bank, still part-owned by the government following a bailout after the financial crisis, has refocused on traditional lending, but growth is hard to come by amid competition and low interest rates.

Get More

©2019 Bloomberg L.P.