Dutch bank ABN AMRO expects a weaker operating performance this year because of falling income at its US mortgage business, but it maintained its net profit guidance.
The bank reported net profit of €838 million for the third quarter today, excluding an expected €200 million capital gain on the sale of its Bank of Asia stake.
ABN AMRO, which is expected to cut thousands of Dutch jobs in a new drive to save €500 million from 2007, maintained its forecast for a 10 per cent rise in full-year net profit.
But it said a worst-than-expected decline in its US mortgage refinancing business, depressed by higher interest rates, meant its operating result would be weaker than expected.
ABN AMRO - which is divesting non-core assets and agreed last month to sell its direct custody and securities clearing business to Citigroup - said operating profit after loan-loss provisions was €1.48 billion from €1.33 billion a year earlier.
The bank - whose shares are virtually unchanged this year and have underperformed the DJ Stoxx Bank index - is viewed by many analysts as cheap compared with peers, having a price earnings ratio of around 9. Italy's Unicredito has a ratio of about 13 and Deutsche Bank 11.