ABN raises forecast on revenue strength

Dutch bank ABN AMRO raised its 2003 earnings guidance this morning as robust retail operations and recovering investment banking…

Dutch bank ABN AMRO raised its 2003 earnings guidance this morning as robust retail operations and recovering investment banking helped it post a higher than expected 41 percent jump in quarterly net profit.

Its shares leapt as the Netherlands' biggest bank announced record third-quarter operating income and predicted a 25 per cent rise in 2003 net profit to over €3 billion - above its August guidance of a 15 per cent full-year profit increase.

Increased revenues across the board combined with cost cuts and lower provisioning to drive third-quarter net profit to €832 million, above even the most optimistic of forecasts.

Total revenue climbed 11.7 per cent to €4.83 billion as operating profit jumped 23.7 per cent to €1.63 billion.

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Company watchers had in previous quarters voiced fears that ABN AMRO was too heavily dependent on US mortgage income, but this time welcomed the broad-based increase in revenues.

"It is clear they have seen good progress in all their businesses. These are very healthy numbers -it isn't just one business driving them forward," said one Amsterdam trader.

Twelve analysts polled by Reuters had expected ABN AMRO on average to report third-quarter net earnings of €697.6 million, up from €591 million in the year-ago period.