Dutch bank ABN Amro beat analyst expectations today with a jump of 21% in second-quarter net profit to €475m, as the release of previous impairments offset rising costs.

Analysts in a company-compiled poll had predicted net profit of €312m for the months from April to June, down from €393m a year ago.

ABN's earnings were lifted by an economic recovery in the Netherlands, which stimulated demand for corporate and mortgage loans and improved the credit quality of existing clients.

This mitigated an 8% increase in operating expenses, driven by rising costs of anti-money laundering efforts and investments relating to regulatory changes.

Costs came in higher than analysts' estimates, while net interest income slightly missed expectations as it dropped 3% to €1.27 billion.

Still, the lender said it expects net interest income to bottom out in the second half of the year as interest rates climb, leading to a total interest income of around €5.2 billion for the full year.

ABN, one of three dominant banks in the Netherlands, had previously guided for net interest income of around €5.1 billion.

ABN said the European Central Bank had approved a potential share buyback worth €250m, conditional on the potential sale of shares by the Dutch state, which still holds a 56% stake.