ABN Amro Loss Worse Than Expected After $1.2 Billion Hit

ABN Amro Bank NV’s new chief executive officer will review the bank’s strategy after the Dutch lender posted its first loss since 2013 and set aside almost twice as much as expected to cover future loan losses.

The bank made 1.1 billion euros ($1.2 billion) of provisions to account for loans going bad and said the figure may rise to 2.5 billion euros for the full year. The net loss of 395 million euros was driven by the provisions and its exposure to two clients. CEO Robert Swaak, just three weeks into the job, said reviewing the investment bank will be a top priority.

ABN Amro joined lenders across Europe in building up provisions as measures to contain the virus make it harder for clients to repay loans. The Dutch bank’s exposure to the oil-and-gas industry, one of the highest in Europe, is also putting pressure on earnings after the sector was hit hard by the pandemic and roiled by a price war.

“The ongoing CIB review is a short-term priority for me,” Swaak said in a statement on Wednesday, referring to the investment bank. Despite recent improvements, “this has not resulted in the required profitability. Also the risk profile of parts of the CIB is not fully aligned with that of the bank.”

ABN Amro will also review its overall strategy, with a focus on anti-money laundering controls and improving its digital capabilities, the CEO said.

ABN Amro dropped as much as 8.6% in Amsterdam trading and was down 7.6% at 6.17 euros as of 11:35 a.m. That brings the drop this year to 62%, the fourth-worst performance on the STOXX Europe Banking Index.