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ABN Amro (ABNd.AS), a Dutch bank, saw its stock drop 10% on Wednesday due to higher-than-expected costs, including new anti-money laundering (AML) provisions.
After a €54 million loss in the same quarter last year due to a large money laundering fine, the company made a net profit of €295 million ($310.6 million) in the first three months of this year, exceeding the average analyst estimate of €259 million.
However, the bank's costs were higher than expected as a result of increased anti-money laundering (AML) provisions of €50 million and regulatory levies.
In 2024, the company reiterated its goal of keeping costs below €4.7 billion.
On a conference call, CEO Robert Swaak said the cost target was not a "smooth glide path," but he saw no reason to "adjust the guidance."
The strong increase in costs, according to KBC Securities analyst Thomas Couvreur, is "particularly worrisome."
Mr Swaak said the company wanted "full-year visibility" before making any decisions on share buybacks and was aware of the consequences of the current Ukraine crisis.
"Our world changed significantly in the last quarter," Mr Swaak said in a statement, "The war in Ukraine shook our sense of security and stability, causing further economic uncertainty and sharp inflation. "
He went on to say that ABN AMRO was "extremely concerned" about the conflict, despite the lender's "very limited" direct exposure to Russia.
The bank's quarterly net interest income of €1.31 billion was broadly in line with expectations, and it expects to exceed its full-year guidance range of 5.0-5.1 billion.
By fLEXI tEAM