Boston, MA 05/20/2013 (wallstreetpr) – The fall in net income from 503 million euros in the previous year to 415 million euros for the present year had led the Amsterdam based ABN Amro Group NV to announce more job cuts. The profits had declined by 17 percent, the economic development is struggling and unemployment is still on the rise. All these factors had led the third largest Dutch lender to reduce an additional 400 jobs over the already announced 2350 job reductions.
IT modernization
ABN Amro Group NV plans to reduce jobs by 1 percent to 3 percent over the years owing to increasing modernization of banking systems through the use of information technology advancements and to the customers switching greatly to mobile and internet banking. This had led to the announcements of job cuts by ABN Amro Group NV in its commercial and merchant banking divisions.
Decline in Housing prices
As the Dutch banks rely heavily on mortgage lending, which is equivalent to 90 percent of the country’s economy the fall in housing prices had further led to the decline of profits for ABN Amro Group NV. The lender plans to bolster its growth in profits for the forthcoming years through expansion into operations such as private banking and energy and commodities finance. While net interest income of ABN Amro Group NV rose by 5 percent over the previous year, the bank faced heavy losses 8 million euros in the non interest income segment which includes earnings from markets, derivative transactions and hedging.
