Dutch bank ABN Amro today posted fourth-quarter net profit way below analysts' expectations as loan impairments jumped.
Net profit plunged 42% to €316m from €542m a year earlier. This compares with an average expectation of €446m in a Reuters poll of analysts.
"Net profit was impacted by elevated loan impairments in specific sectors," the bank's chief executive Kees van Dijkhuizen said.
Loan impairments soarded to €208m from €34m a year earlier, as shipping, oil services, jewellery and some other sectors continued to struggle despite a strong recovery in the Dutch economy and rising oil prices.
ABN Amro last year said it would limit trade and commodity finance operations in the offshore energy, diamond and shipping sectors, to improve profitability.
Its net profit was also dented by €85m in extra costs for the scrutiny of clients, as the bank stepped up its fight against money laundering and other criminal activities.
This followed a record $900m fine paid by fellow Dutch bank ING Group in September for failing to spot criminal activities financed through its accounts for years.
Outside the Netherlands, Denmark's largest bank - Danske is involved in a money laundering scandal in Estonia, and Germany's biggest, Deutsche Bank, also faces money laundering allegations.
"We must remain vigilant in detecting financial crime," van Dijkhuizen said.
"We are raising the bar even further to strengthen and enhance our customer due-diligence activities, also as regulatory requirements and scrutiny are intensifying," he added.
The core capital adequacy ratio was 18.4% at the end of December, compared with 18.6% three months earlier and near the upper end of the 17.5-18.5% range set for 2018, the bank said.
Its dividend over 2018 was set at €1.45 per share, increasing the pay-out ratio to 62% of net income from 50% a year earlier.
