ABN AMRO cuts 9% of jobs

Nationalised Dutch bank ABN AMRO is shedding 2,350 jobs - some 9% of its workforce - as the state readies it for sale or a listing.

The bank said it expected 1,500 redundancies and 850 positions to be lost through natural attrition in the next three to four years.

Most of the job cuts will be in back-office operations such as IT, but some retail and private banking positions will also be axed. The bank said it has taken a restructuring provision of 200 million euros pre-tax for the redundancies.

Global banks have announced close to 50,000 job cuts in recent months in the face of sluggish economic growth, volatile markets and regulatory changes.

The Dutch state, which nationalised ABN AMRO during the 2008 financial crisis, plans to sell ABN AMRO in 2014 or later, preferably by listing it on the stock market, so improving efficiency would make the bank more attractive to potential buyers.

Historically, ABN AMRO has had a relatively high cost-to-income ratio compared with other banks.

It said its cost-income ratio fell to 63% at the end of June, from 75% a year ago.

Dutch rival ING has reported an underlying cost-income ratio of 59.2%, while Rabobank has an efficiency ratio of 59.7%.

The Dutch government nationalised the Dutch operations of ABN AMRO and Fortis for 16.8 billion euros when Belgian-Dutch Fortis group lost investors' confidence at the height of the credit crisis in 2008.

ABN AMRO said in a statement it wanted to improve its services to customers by offering new products such as banking on mobile phones, and reduce bureaucracy, resulting in the job cuts.

The bank said it would pay an interim dividend of 200 million euros, its first since it was bailed out and nationalised.

Underlying second-quarter net profit rose to 391 million euros from 11 million euros a year ago thanks to higher non-interest income and lower provisions.

Underlying results exclude integration and separation costs due to the ABN AMRO break-up following the takeover by Royal Bank of Scotland, Santander and Fortis in 2007.