ABN Amro, the bank owned by the Dutch state, said its second quarter earnings fell 9.9% due to an increased level of bad loans.
Net profit came to €291m, compared with €323m a year ago.
ABN blamed lower interest margins, falling commissions, and a near-doubling in bad loans to €367m from €187m.
The bank's chief executive Gerrit Zalm blamed a Dutch recession, pointing to rising bankruptcies and unemployment rising to 6.5%.
The latest government data show the economy has actually been slowly growing, however.
Meanwhile ABN's retail deposits increased by €7.7 billion, benefitting from savers frightened by Europe's debt crisis.
The government purchased ABN Amro to save the nation's banking system in 2008 as previous owner Fortis slid toward bankruptcy. The deal cost taxpayers around €32 billion.
