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ABN to cut 7,000 jobs
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February 22, 2001: 10:37 a.m. ET
Dutch bank aims to slash costs after domestic unit's profit falls
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LONDON (CNN) - Faced with a big drop in profit at its home-turf unit, Dutch bank ABN AMRO said on Thursday it's cutting some 7,000 jobs and closing branches.
The bank said it will reduce its workforce in its consumer business to 23,000 staff from 29,000 and cut 770 jobs from its corporate banking unit in Holland. The company previously had expected to cut just 2,500 jobs.
ABN will also cut the number of branches to 630, from 830 currently. The closures and job cuts are expected to save the bank  500 to 600 million ($450 to $540 million) starting in 2004.
"The Netherlands is really a mature market," Chairman Rijkman Groenink told a news conference, saying the need for ABN AMRO's heavy infrastructure to provide banking and some insurance services to clients had dropped sharply.
"You can't gain much by adding new revenues in the Netherlands. That would only erode margins further. So we have to reach our goals by cutting costs," Floris Deckers, head of the Dutch retail operations, told journalists.
Groenink said the job cuts would take place mainly through attrition, fewer temporary employees and retraining.
The cuts follow a 22 percent drop in ABN AMRO's Dutch unit's operating profit to 1.15 billion in the year ended 2000, from 1.48 billion in the previous year.
Operating profit at the bank as a whole increased 7.1 percent to 5.27 billion in the year as revenue increased 18.9 percent to 18.47 billion.
Net profit, excluding one-off restructuring charges, rose 21 percent to 3.10 billion. Analysts polled by Reuters had expected net profit between 2.96 billion to 3.14 billion.
Part of the increase was due to lower taxes and smaller provisions for bad loans.
Although the bank said it expected to meet its targets this year, it was cautious.
"Given the uncertain economic outlook and changing market conditions it is too early in the year to give a more quantitative outlook," the bank said.
ABN AMRO shares tumbled 6.4 percent to 23.98 in Amsterdam.
Underlying results are disappointing," said Bart van der Feen, analyst at Rabo Securities. "At first sight the results looked better than everyone had expected, but if you take a look at individual points, it's mainly due to lower taxes and somewhat lower provisions than expected for loan losses."
--from staff and wire reports 
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