ABN AMRO Announces 13.0% Rise in Half-Year Profits.Business Editors AMSTERDAM Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. , The Netherlands--(BUSINESS WIRE)--Aug. 17, 2000 ABN AMRO ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) (NYSE NYSE See: New York Stock Exchange : ABN ABN Advance beneficiary notice, see there ), a leading international banking group, today announced results for the first half 2000 ending June June: see month. 30, 2000. NEW FINANCIAL TARGETS UNVEILED AND UPDATE ON RESTRUCTURING restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). - Net profit up 13.0% to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1,625 million - Net return on equity rises to 28.0% - Earnings per share 11.3% higher at EUR 1.08 - Interim dividend per share 33.3% higher at EUR 0.40 - Current financial targets expected to be outperformed again in 2000 - Ambitious new financial targets announced - Restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for full year 2000 up to EUR 800 million, to be recouped in two years - Cost savings: - amounting to approx. EUR 2.0 billion over next four years - annually recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. amount of at least EUR 600 million from 2004
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(in EUR and %) 1st half 2000 1st half 1999 % change
Operating result 2,803 m 2,510 m 11.7%
Pre-tax profit 2,515 m 2,190 m 14.8%
Net profit 1,625 m 1,438 m 13.0%
Earnings per share 1.08 0.97 11.3%
Dividend per ordinary share 0.40 0.30 33.3%
June 30, 2000 Dec 31, 1999
Total assets 533.3 bn 457.9 bn 16.5%
Group capital 30.6 bn 28.9 bn 5.9%
Total risk-weighted assets 271.9 bn 246.4 bn 10.3%
BIS ratio 10.22% 10.86%
Tier 1 ratio 6.75% 7.20%
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Results overview Profits benefited from strong growth across our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and high volumes in world financial markets in the first half, which boosted returns from our securities businesses. - On top of the strong revenue growth in the first half of 1999, another strong increase in revenues - up 20.2% to EUR 9,166 million - enabled us to again exceed our financial targets for net profit growth, earnings per share growth and net return on equity. The latter rose to a level of 28.0%, up from 27.4% in the same period last year. - Net commission income was up 44.9% to EUR 3,009 million, due to high turnover in world stock markets and another strong performance by our global equities brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. business. - Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased 24.4% in the first six months, mainly because of performance-related bonuses and - to a lesser extent - restructuring costs of EUR 108 million for our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. wholesale banking business. This reflects our strategy of continuing to build our global presence in wholesale banking and strengthen the long term profitability of this business. - Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia/Pacificrose by more than 20% in each region, pushing pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profits for the International Division - which comprises all commercial banking activities and some investment banking activities outside the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. - up 23.7% to EUR 1,346 million. - The high and improving quality of our asset base worldwide enabled us to further reduce specific loan loss provisioning in most of our major markets, with total provisioning (excluding additions to the Fund for General Banking Risks) falling 25.4% from the first half of last year to EUR 247 million. - The Managing Board reconfirms the profit forecast stated at the publication of the 1999 annual figures, that the current financial targets will again be outperformed in the full year 2000 (excluding the restructuring charge). Rijkman Groenink, Chairman of the Managing Board, commented: "These are sound results, but we know we can do even better in the future. The revised strategy and new structure for the bank that we announced at the end of May will give us the focus and managerial accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. we need to further increase profitability in the coming years. Implementation of the changes is firmly on track and due to be completed by the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , with the first benefits being realized in 2001." "We will communicate more details of our new plans for Consumer & Commercial Clients, Wholesale Clients and Private Clients & Asset Management - our three new strategic business units - in the final quarter of this year. But the demanding financial targets we have unveiled today underline underline an animal's ventral profile; the shape of the belly when viewed from the side, e.g. pendulous, pot-belly, tucked up, gaunt. how seriously we are taking our governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. objective of maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: value for our shareholders. ABN AMRO must change and it will change. We will be single minded in focusing our efforts and resources on businesses which add value and divert di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. resources from those that do not. We will be rigorous in evaluating and rewarding managers throughout the organization on their record in building value. This will benefit shareholders, clients and employees." Update on strategic review New financial targets - ABN AMRO has established maximizing shareholder value as its over-riding governing objective. Focusing on shareholder value provides a decision making process that allows us to manage explicitly ex·plic·it adj. 1. a. Fully and clearly expressed; leaving nothing implied. b. Fully and clearly defined or formulated: "generalizations that are powerful, precise, and explicit" the diverse interests of all other stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. in our firm. - We have set ourselves a challenging financial goal to deliver Total Return to Shareholders (TRS See traffic engineering methods. TRS - term rewriting system ), defined and measured as share price appreciation plus dividend yield, that consistently places us in the top 5 of a demanding set of peers. Based on historical performance data, this would require us to realize a 100% increase in value in 4 years. This level of stock performance requires outstanding financial performance. It means that over the next four years we would expect the following performance while almost doubling our capital base by 2004: - average ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. of over 25% (in Dutch GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). By the end of this year we will also publish an ROE restated in internationally accepted GAAP terms. - average EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. growth of 17%. The above will also be achieved in the context of: - maintenance of our AA credit ratings; - exposure to emerging markets in line with our AA credit ratings. - Our peer set reflects our ambition Ambition Alger, Horatio author of a series of rags-to-riches stories. [Am. Lit.: Ragged Dick] Bart, Lily sacrifices her principles and her chance for love in schemes to climb the social ladder. [Am. Lit. to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. superior management teams in our industry. This is a significant raising of our sights given that our past performance (measured on the basis of TRS) has placed us at number 10 in this set of peers. The peer set will be:
Bank One Chase Manhattan HSBC Holdings Morgan Stanley
Barclays Citigroup HypoVereinsbank Nordic/Baltic
BBVA Credit Suisse ING Group Societe Generale
BNP Paribas Deutsche Bank Lloyds TSB UBS
BSCH Fleet Boston Merrill Lynch Wells Fargo
- To support the new value-based organization, and ensure consistency Consistency can refer to:
n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from standards for all businesses, Economic Profit (defined as net operating profit after tax and provisions minus cost of equity on a risk adjusted basis) will be adopted as a company-wide measure of value creation. - We will also change the basis for top management financial rewards. Delivery of the TRS goal (a 100% increase in value in 4 years) will drive a substantial part of cash compensation for the Managing Board from January January: see month. 2001. Similar schemes (based on Managing for Value) will be developed for top management. - In order to increase transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. , we will start publishing quarterly figures in 2001 at a Group level, and from 2002 also at an SBU SBU St. Bonaventure University (St. Bonaventure, New York) SBU Stony Brook University (State University of New York) SBU Southwest Baptist University (Bolivar, MO) level. - These changes will be supported by the new organizational structure of ABN AMRO announced on May 30, 2000. This will come into effect on January 1, 2001 as planned. Rijkman Groenink, Chairman, commented: "This sets a new standard for management and decision making. It demands we look at the business in a different way and organize organize /or·ga·nize/ (or´gan-iz) 1. to provide with an organic structure. 2. to form into organs. or·gan·ize v. 1. ourselves differently to develop and deliver our strategies. We will not allow capital to be invested in businesses, products, clients, and geographies, where we do not have a clear idea of how and how much economic value can be created. These new decision making standards will have zero tolerance The policy of applying laws or penalties to even minor infringements of a code in order to reinforce its overall importance and enhance deterrence. Since the 1980s the phrase zero tolerance has signified a philosophy toward illegal conduct that favors strict imposition of for value destruction." Restructuring charge and cost savings - Following reviews by our new Strategic Business Units we have now largely completed the analysis of how our international network can support the new strategy. We will further strengthen our presence in certain key markets and at the same time we will rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear businesses in a large number of countries and exit a small number of other countries, thus creating a more profitable and effective global network. Announcements on resulting steps will be made at the appropriate time for each business and country concerned. - The formation of the new Strategic Business Units is on track. We have finalized See finalization. the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of activities: - Wholesale Clients SBU will provide a superior service to defined sector based client segments through the integrated global network; - Consumer & Commercial Clients SBU will focus on a limited number of key home markets; - Private Clients & Asset Management will expand its business primarily through autonomous growth. - We will take a restructuring charge in the second half of 2000 of up to EUR 800 million (before tax), to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution all the above mentioned steps. This charge will be recouped through cost savings in 2 years time. - Cost savings resulting from the strategic review, mainly due to the integration of Investment Banking and Corporate Banking in the Wholesale Clients SBU, are expected to amount to an aggregate total of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. EUR 2 billion over the next 4 years. By 2004, cost savings are expected to have reached an annually recurring level of at least EUR 600 million. Details of half-year results Group profit Total revenue increased by 20.2% to EUR 9,166 million, largely due to a sharp rise (44.9%) in net commissions, mainly from securities and asset management activities. Results from financial transactions rose 12.5%. Interest revenue growth was constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by the narrowing margin between short and long term interest rates worldwide, rising 5.9% to EUR 4,513 million. In addition, in the first six months of 1999 interest income was influenced by non-recurring income from duration-related sales out of our investment portfolio. Other revenue, including commercial development income from Bouwfonds and lease revenues, rose 72.0% to EUR 509 million. Adjusted for currency translation and acquisitions (notably Bouwfonds, which was acquired in February February: see month. 2000) the increase in revenue was 11.6%. Operating expenses rose by 24.4% to EUR 6,363 million, mainly as a result of costs incurred in further strengthening the Group's position in international wholesale banking, including restructuring the North American wholesale banking business. Excluding acquisitions - principally Bouwfonds - currency translation and restructuring costs expenses were 13.2% higher. As a result, the efficiency ratio was 69.4%, compared with 67.1% in the first half.
Provisioning for loan losses / Fund for general banking risks
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(in EUR million and %) June 30, June 30, % change
2000 1999
Specific bad debt provisioning 319 385 -17.1%
Cross-border risks provisioning -72 -54 -33.3%
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Total specific provisioning 247 331 -25.4%
Addition to fund for
general banking risks 72 -
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Total amount charged to
the income statement 319 331 -3.6%
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The total amount of provisioning for loan losses (and addition to the Fund for General Banking Risks (FAR) fell again, to 23 basis points of total risk-weighted assets Risk-Weighted Assets In terms of the minimum amount of capital that is required within banks and other institutions, based on a percentage of the assets, weighted by risk. Notes: The idea of risk-weighted assets is a move away from having a static requirement for capital. . Specific bad debt provisioning fell 25.4% to EUR 247 million, with lower provisioning in The Netherlands, Latin America and the Middle East and Africa comfortably exceeding increased provisioning in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Provisioning for Asia/Pacific was unchanged, following the substantial reductions last year. There were further releases in cross-border risks Cross-border risk Describes the volatility of returns on international investments caused by events associated with a particular country as opposed to events associated solely with a particular economic or financial agent. provisions, particularly in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . EUR 72 million was added to the FAR, to keep it at the level of 0.5% of risk weighted assets. Pre-tax profit increased by 14.8% to EUR 2,515 million, including an amount of EUR 193 million from acquisitions and currency translation. The effective tax rate was 28.5%, up from 27.5% in the first six months of 1999 and compared with 31.1% for the whole of last year. Return on equity rose to 28.0% from 27.4% in the first half of 1999. Balance sheet and group equity at June 30, 2000 Total assets increased by 16.5% (EUR 75.4 billion) over December December: see month. 31, 1999 to EUR 533.3 billion. Adjusted for currency translation and acquisitions total assets grew by EUR 48.8 billion (+10.7%).
Capital and BIS ratios
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(in EUR million and %) June 30, December 31, % change
2000 1999
Shareholders' equity 12,393 11,987 3.4%
Total qualifying capital 27,793 26,764 3.8%
of which tier 1 capital 18,347 17,735 3.5%
Total risk-weighted assets 271,850 246,374 10.3%
BIS ratio 10.22% 10.86%
Tier 1 ratio 6.75% 7.20%
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Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. has risen 3.4% since December 31, 1999 to EUR 12,393 million, largely because of retained profit. Risk weighted assets - which were influenced by the acquisitions of Bouwfonds and Dial - grew 10.3% to EUR 271.9 billion. Adjusted for exchange rate movements and acquisitions, risk weighted assets rose by EUR 10.5 billion (or by 4.2%). The growth in risk weighted assets and goodwill charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Bouwfonds and Dial resulted in a slight decline in our capital ratios. Results by division This is the final year in which ABN AMRO will report its results according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. its current structure, which principally comprises the Netherlands Division, International Division and Investment Banking Division. From January 1, it will be organized into three new strategic business units based around clients: Consumer & Commercial Clients, Wholesale Clients and Private Clients & Asset Management.
Netherlands Division
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(in EUR million and %) 1st half 1st half % change
2000 1999
Net interest revenue 1,369 1,460 -6.2%
Net commissions 535 436 22.7%
Results from
financial transactions 19 42 -54.8%
Other revenue 75 50 50.0%
-- -----
Total revenue 1,998 1,988 0.5%
Operating expenses 1,322 1,300 1.7%
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Operating result 676 688 -1.7%
Provisioning for loan losses 31 39 -20.5%
Value adjustments
to financial fixed assets -21 -
----- ------
Pre-tax profit 666 649 2.6%
Efficiency ratio 66.2% 65.4%
Number of employees (FTE) 25,612 25,608
Number of branches and offices 894 926
(in EUR billion and %) June 30, 2000 December 31,
1999
Total assets 116.7 99.9 16.8%
Total risk-weighted assets 82.1 76.5 7.3%
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Pre-tax profit rose 2.6% to EUR 666 million. Interest revenue fell 6.2%; although lending volumes rose considerably, with stable margins resulting in a satisfactory increase in the commercial loan book, this was not enough to offset the negative impact of the flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. yield curve in the first six months. In addition, in the same period over 1999 interest income benefited from non-recurring income from duration-related sales. Securities commissions surged 60.8% on the back of growing demand for our brokerage services. Provisioning for loan losses fell again, to just EUR 31 million, reflecting the exceptionally high quality of our assets in The Netherlands. Operating expenses rose 1.7%, resulting in a marginal (jargon) marginal - 1. Extremely small. "A marginal increase in core can decrease GC time drastically." In everyday terms, this means that it is a lot easier to clean off your desk if you have a spare place to put some of the junk while you sort through it. 2. rise in the efficiency ratio to 66.2%.
International Division
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(in EUR million and %) 1st half 2000 1st half 1999 % change
Net interest revenue 2,981 2,595 14.9%
Net commissions 1,463 1,084 35.0%
Results from
financial transactions 374 281 33.1%
Other revenue 358 229 56.3%
-- ---- -----
Total revenue 5,176 4,189 23.6%
Operating expenses 3,549 2,760 28.6%
----- ----- -----
Operating result 1,627 1,429 13.9%
Provisioning for loan losses 281 341 -17.6%
--- ----- -----
Pre-tax profit 1,346 1,088 23.7%
Pre-tax profit per region
Europe 240 158 51.9%
North America 593 584 1.5%
Latin America
and the Caribbean 350 287 22.0%
Asia / Pacific 132 101 30.7%
Middle East and Africa 31 -42
Efficiency ratio 68.6% 65.9%
Number of employees (FTE) 62,489 62,823
Number of branches and offices 2,626 2,576
(in EUR billion and %) June 30, Dec. 31,
2000 1999
Total assets 274.8 241.7 13.7%
Total risk-weighted assets 152.3 141.5 7.6%
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Strong growth in revenues in most of our major markets pushed pre-tax profit for the International Division up 23.7% to EUR 1,346 million. Total revenue rose 23.6%, on the back of sharp increases in net commissions (35.0%) and net interest revenue (14.9%). In particular securities commissions and payment services around the world showed good growth. Adjusted for currency translation, total revenue was up 13.1%. Expenses rose 28.6% as a result of performance-related bonuses and the cost of restructuring our North American wholesale banking business, which now fully integrates corporate and investment banking. Provisioning for loan losses fell 17.6% to EUR 281 million. Pre-tax profit for Europe climbed 51.9% to EUR 240 million, with especially strong performances in France, Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. and the UK. Asset quality again improved. North America was impacted by restructuring costs of EUR 108 million, which held back pre-tax profit growth in the region to 1.5%. Specific provisioning doubled, bringing total provisioning to a still comfortable level of 0.33% of risk weighted assets. Strong revenue growth - and a decline in specific provisioning - in Latin America and the Caribbean pushed pre-tax profits there up 22.0% to EUR 350 million. Pre-tax profit in Asia/Pacific grew 30.7% to EUR 132 million. Revenues grew strongly across the region, notably in Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. , where Bank of Asia's results showed substantial improvement. Specific provisioning was little changed from last year. The Middle East and Africa region achieved a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in its performance, from a pre-tax loss of EUR 42 million to pre-tax profit of EUR 31 million, principally because incidental Contingent upon or pertaining to something that is more important; that which is necessary, appertaining to, or depending upon another known as the principal. Under Workers' Compensation statutes, a risk is deemed incidental to employment when it is related to whatever a bad debt provisioning incurred in the same period last year was not repeated.
Investment Banking Division
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(in EUR million and %) 1st half 2000 1st half 1999 % change
Net interest revenue 2 110 -98.2%
Net commissions 941 502 87.5%
Results from
financial transactions 528 496 6.5%
Other revenue 101 94 7.4%
--- -----
Total revenue 1,572 1,202 30.8%
Operating expenses 1,219 879 38.7%
----- ---
Operating result 353 323 9.3%
Value adjustments
to financial fixed assets -10 -11 -9.1%
--- ----
Pre-tax profit 363 334 8.7%
Efficiency ratio 77.5% 73.1%
Number of employees (FTE) 8,351 7,226
Number of branches
and offices 68 62
(in EUR billion and %) June 30, Dec. 31,
2000 1999
Total assets 116.1 107.8 7.7%
Total risk-weighted assets 19.3 20.5 -5.9%
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Pre-tax profit from investment banking rose 8.7% to EUR 363 million. The biggest revenue contributor was securities commissions, which rose 83.0% on the back of heavy volumes in world financial markets and another strong performance by our global equities business. Asset management, corporate investments (private equity) and corporate finance also performed strongly. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. grew to EUR 123.0 billion from EUR 112.9 billion at December 31, 1999. Results from financial transactions increased by only 6.5%, largely as a result of trading losses The following contains a list of trading losses which eventually forced major corporations to go bankrupt or restructure parts of their organisation. This list is not exhaustive. following the World Online IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. . Interest revenue was down by 98.2%, partly because of the non-recurring income from duration-related sales in the same period in 1999. Expenses rose 38.7%, reflecting higher performance-related bonuses and new hirings in origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real , trading, research and sales, which are aimed at further strengthening our position in selected wholesale banking products and sectors. Dividend The 2000 interim dividend has been fixed at half of the dividend for the 1999 financial year (EUR 0.80) i.e., EUR 0.40 per ordinary share of NLG NLG The ISO 4217 currency code for the Dutch Guilder. 1.25 nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. (EUR 0.30 in 1999). The interim dividend will be payable wholly in cash or, at the shareholder's option, wholly in ordinary shares chargeable to the share premium account in a ratio which is still to be determined. The ratio of the value of the stock dividend to that of the cash dividend will be determined on September September: see month. 5, 2000, after the close of trading on the Amsterdam Exchanges Amsterdam Exchange (AEX) Exchange that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. , on the basis of the average quotation QUOTATION, practice. The allegation of some authority or case, or passage of some law, in support of a position which it is desired to establish. 2. Quotations when properly made, assist the reader, but when misplaced, they are inconvenient. for that day. The value of the stock dividend will be virtually equal to that of the cash dividend. The new ordinary shares will qualify for the final dividend over the 2000 financial year and the full dividend over subsequent years. The ordinary shares will be quoted ex-dividend Ex-Dividend The trading of shares when a declared dividend belongs to the seller rather than the buyer. Notes: A stock trades ex-dividend on or after the ex-dividend date (ex-date). from Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant August 18, 2000. Shareholders can submit instructions stating whether they opt for dividend payments in cash or in stock from August 21, 2000 to September 5, 2000 inclusive (theory) inclusive - In domain theory, a predicate P : D -> Bool is inclusive iff For any chain C, a subset of D, and for all c in C, P(c) => P(lub C) In other words, if the predicate holds for all elements of an increasing sequence then it holds for their least upper . The 2000 interim dividend will be payable as from September 8, 2000. ABN AMRO shares trade in the US on the NYSE in ADR ADR - Astra Digital Radio form, and are listed on the principal stock exchanges in Europe. The ordinary shares may be accessed on the Reuter Reu·ter , Baron Paul Julius von 1816-1899. German-born British journalist who founded (1848) Reuter's, one of the first international news agencies. Equities 2000 Service under the symbol ABN.AS and on Quotron under the symbol AABN AABN Assault Amphibian Battalion (USMC) AABN Association for the Advancement of Being Nice (Israel) .EU. Additional information is available on ABN AMRO's home page: http://www.abnamro.com. This press release is also available on the internet on http://www.abnamro.com/newsnet/ A web-cast of today's press conference in Amsterdam can be viewed on http://www.abnamro.com/, and the analyst meeting on www.abnamro.com/investorrelationse/
Consolidated profit
and loss account for
the first half 2000
(in millions of euros)
% change
1st half 2nd half 1st half 1st half
2000 1999 1999 2000/1999
Net interest revenue 4,513 4,425 4,262 5.9
Revenue from securities
and participating
interests 214 185 172 24.4
Payment services 662 609 567 16.8
Insurance 111 89 87 27.6
Securities 1,330 914 796 67.1
Asset management
and trust funds 336 291 269 24.9
Guarantees 81 73 66 22.7
Leasing 67 64 59 13.6
Other 422 338 233 81.1
---------- ---------- ---------
Net commissions 3,009 2,378 2,077 44.9
Securities 235 98 319 -26.3
Foreign exchange dealing 311 240 259 20.1
Derivatives 284 177 194 46.4
Trading LDC-portfolio 13 25 16 -18.8
Other 78 15 31 151.6
---------- ---------- ---------
Results from
financial transactions 921 555 819 12.5
Other revenue 509 358 296 72.0
---------- ---------- ---------
Total revenue 9,166 7,901 7,626 20.2
Staff costs 3,648 2,912 2,856 27.7
Other administrative
expenses 2,265 2,161 1,880 20.5
Depreciation 450 420 380 18.4
---------- ---------- ---------
Operating expenses 6,363 5,493 5,116 24.4
Operating result 2,803 2,408 2,510 11.7
Provision for loan losses 247 322 331 -25.4
Addition to / release
from Fund for general
banking risks 72 -20
Value adjustments to
financial fixed assets -31 46 -11
---------- ---------- ---------
Operating profit
before taxes 2,515 2,060 2,190 14.8
Taxes 718 718 602 19.3
---------- ---------- ---------
Group profit after taxes 1,797 1,342 1,588 13.2
Minority interests 172 210 150 14.7
---------- ---------- ---------
Net profit 1,625 1,132 1,438 13.0
Preference share dividend 40 40 40
---------- ---------- ---------
Net profit, available
to ordinary shareholders 1,585 1,092 1,398 13.4
========== ========== =========
Earnings per ordinary
share of NLG 1.25(1) 1.08 0.75 0.97 11.3
Average exchange rate
of US dollar 0.95 1.04 1.08 -12.0
(1) Based on the average number of ordinary shares outstanding. The half-yearly Half´-year`ly a. 1. Two in a year; semiannual. Adj. 1. half-yearly - occurring or payable twice each year biannual, semiannual, biyearly figures have not been audited.
Consolidated balance sheet
at June 30, 2000 after profit
appropriation
(in millions of euros)
June 30, Dec. 31, June 30,
2000 1999 % change 1999
Assets
Cash 7,341 6,806 7.9 6,919
Short-dated
government paper 10,883 10,375 4.9 10,090
Banks 64,718 47,201 37.1 71,121
Loans to public sector 10,641 12,007 -11.4 9,049
Loans to private sector 241,659 206,974 16.8 198,792
Professional securities
transactions 50,812 40,742 24.7 39,590
----------- ----------- ---------
Loans 303,112 259,723 16.7 247,431
Interest-earning securities 102,743 92,583 11.0 92,439
Shares 18,523 16,990 9.0 16,045
Participating interests 1,948 1,884 3.4 1,663
Property and equipment 6,031 5,205 15.9 4,845
Other assets 7,337 6,894 6.4 6,409
Prepayments and
accrued income 10,624 10,223 3.9 7,541
----------- ----------- ---------
533,260 457,884 16.5 464,503
=========== =========== =========
Liabilities
Banks 103,416 80,990 27.7 96,265
Saving accounts 77,327 71,729 7.8 67,450
Deposits and other
customer accounts 149,195 128,507 16.1 131,783
Professional securities
transactions 45,555 29,756 53.1 39,873
----------- ----------- ---------
Total client accounts 272,077 229,992 18.3 239,106
Debt securities 59,687 54,228 10.1 44,809
Other liabilities 43,155 42,113 2.5 37,877
Accruals and
deferred income 12,498 10,974 13.9 9,286
Provisions 11,834 10,706 10.5 8,860
----------- ----------- ---------
502,667 429,003 17.2 436,203
Fund for general
banking risks 1,360 1,232 10.4 1,219
Subordinated liabilities 11,701 10,717 9.2 10,661
Shareholders' equity 12,393 11,987 3.4 11,436
Minority interests 5,139 4,945 3.9 4,984
----------- ----------- ---------
Group equity 17,532 16,932 3.5 16,420
----------- ----------- ---------
----------- ----------- ---------
Group capital 30,593 28,881 5.9 28,300
----------- ----------- ---------
533,260 457,884 16.5 464,503
=========== =========== =========
Contingent liabilities 46,867 43,561 7.6 37,372
Committed facilities 136,947 115,441 18.6 101,164
Exchange rate of US dollar 0.96 1.00 -4.0 1.03
The half-yearly figures have not been audited.
Analysis of private sector loans per division
(in billions of euros)
June 30, Dec. 31, June 30,
2000 1999 % change 1999
Netherlands Division 95.9 88.6 8.2 88.8
Europe 24.9 21.6 15.3 20.9
North America 63.3 56.4 12.2 52.6
Latin America and
the Caribbean 8.3 8.2 1.2 7.9
Middle East and
Africa 1.6 1.5 6.7 1.5
Asia / Pacific 18.8 17.6 6.8 14.9
-------- -------------- ---------
International Division 116.9 105.3 11.0 97.8
Investment Banking
Division 5.3 5.4 -1.9 5.3
ABN AMRO Lease
Holding N.V. 8.6 7.7 11.7 6.9
ABN AMRO Bouwfonds 15.0
-------- -------------- ---------
Total 241.7 207.0 16.8 198.8
======== ============== =========
Operating profit before taxes
(in millions of euros)
% change
1st half 2nd half 1st half 1st half
2000 1999 1999 2000/1999
Netherlands Division 666 720 649 2.6
Europe 240 195 158 51.9
North America 593 545 584 1.5
Latin America and
the Caribbean 350 289 287 22.0
Middle East and
Africa 31 -10 -42
Asia / Pacific 132 99 101 30.7
-------- ------------ ----------
International Division 1,346 1,118 1,088 23.7
Investment Banking
Division 363 168 334 8.7
ABN AMRO Lease
Holding N.V. 80 63 65 23.1
ABN AMRO Bouwfonds 60
-------- ------------ ----------
2,515 2,069 2,136 17.7
Non allocated
provisions for
cross-border risks 72 -29 54
Addition to / release
from Fund for general
banking risks -72 20
-------- ------------ ----------
Total 2,515 2,060 2,190 14.8
======== ============ ==========
Return on equity per division
half year 2000 year 1999 year
1998
Netherlands Division 28.9% 28.3% 22.6%
International Division 24.1% 18.2% 15.3%
Investment Banking
Division 49.9% 38.6% 16.5%
ABN AMRO Lease
Holding N.V. 28.8% 27.6% 29.1%
ABN AMRO Bouwfonds 22.8%
Total 28.0% 23.7% 16.9%
The return per division is calculated based on the following data:
- net profit per division,
- the allocated part of shareholders' equity of ABN AMRO based on the risk
weighted assets of the divisions.
Staff
(fte's)
June 30, Dec. 31, June 30,
2000 1999 change 1999
Netherlands Division 25,612 25,634 -22 25,608
Europe 9,295 9,230 65 9,363
North America 19,201 18,978 223 18,795
Latin America and
the Caribbean 23,088 23,550 -462 25,824
Middle East and Africa 1,290 1,243 47 1,222
Asia / Pacific 9,615 9,162 453 7,619
---------- ---------- --------- ---------
International Division 62,489 62,163 326 62,823
Investment Banking
Division 8,351 7,512 839 7,226
Other divisions and
policy support 5,636 5,268 368 5,127
ABN AMRO Lease
Holding N.V. 6,809 5,278 1,531 5,014
ABN AMRO Bouwfonds 1,088 1,088
---------- ---------- --------- ---------
Total 109,985 105,855 4,130 105,798
========== ========== ========= =========
Share data
June 30, Dec. 31, June 30,
2000 1999 % change 1999
Number of ordinary
shares outstanding
(in millions) 1,481.3 1,465.5 1.1% 1,453.9
Net asset value per
ordinary share (in euros) 7.78 7.59 2.5% 7.27
Number of preference
shares (in millions) 362.5 362.5 362.5
Number of convertible
preference shares
(in millions) 1.4 1.4 1.6
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