Underlying profit at state-owned Dutch bank ABN AMRO was boosted by an improving economy and a recovering housing market, but one-off charges hit net income, the bank said today.
Growth in underlying profit of 47% to €322m was driven in part by a drop in impaired loans in its credit portfolio, caused by the housing market recovery in the Netherlands.
Net profit fell to €39m from €402m a year earlier.
The charges included a €216m transfer to the bank's new defined contribution pension scheme and a €67m levy paid for the nationalisation of Dutch bank SNS Reaal.
"The increase in profit was driven by lower impairment charges, especially in the SME segment and in residential mortgages," said chief executive Gerrit Zalm, a former Dutch finance minister.
The Dutch government paid out nearly €40 billion to rescue the domestic financial sector during the 2008 financial crisis, when it provided capital injections for banking and insurance group ING, insurer Aegon and financial group SNS Reaal, as well as nationalising ABN AMRO.
The Dutch government aims to reprivatise ABN AMRO, but has not set a date.
The bank also today reported a decline of €164m in the volume of impaired loans in its credit portfolio to €342m.
"It is clear that the housing market is improving. There are more transactions, more houses being sold. This means we have lower impairments for mortgage loans not being paid back," Zalm said.
He said the bank was well on the way toward achieving financial targets it had set for itself for 2017.
The bank has previously said progress on these targets is a precondition for recommending to the government that it be privatised again.
In the first six months of the year, the bank achieved a return on equity of 10.1% - a significant increase from the 7.6% the same time in 2013, and meeting the bank's 2017 target of between 9-12%.
The bank said geopolitical developments, particularly in Russia and Ukraine, might pose a risk to future performance by putting the economy under pressure. The bank said it had limited direct exposure to Russia and "negligible" exposure to Ukraine.