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ABN Amro profit plunges
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November 12, 2001: 3:45 a.m. ET
Dutch bank puts ore money aside for risky loans, 3Q profit falls 40 percent
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LONDON (CNN) - ABN Amro, the largest Dutch bank, said on Monday third-quarter profit fell 40 percent as it set aside more money for possible bad loans.
The Dutch bank, which announced plans to cut 7,000 jobs earlier this year as part of an effort to cut costs, warned last month its full-year profit would fall 15 percent due to tough economic conditions.
European banks have been putting aside money as customers find it increasingly difficult to pay back loans as the global economic slowdown accelerated after the September 11 terror attacks.
Provision for bad loans rose to  308 million, a 21.7 percent increase from the levels in the second quarter. ABN warned last month it would raise provisions to cover risky loans, particularly in the troubled airline industry where it is one of the biggest lenders.
Uncertain economic conditions and weak equity markets have also hit profits at ABN's corporate banking unit and rival investment banks, which advise clients on mergers, acquisitions and share offerings.
"Weak market conditions seen in the first and second quarter have continued and hardened in the third quarter, crystallised to a large extent by the tragic events in the United States," said ABN chairman Rijkman Groenink.
"We expect current market conditions to continue for the remainder of the year and, indeed, into the new year."
"An undesirable aspect of the current economic and market conditions is the level of provisioning. Provisioning has increased this quarter again."
Net income for the three months to September 30 fell to 476 million, or 0.30 a share, from 796 million, or 0.52 a share, in the same period a year ago. Revenue was little changed at 4.67 billion.
Analysts polled by Reuters expected ABN to report third quarter net profit of 415 million to 498 million.
ABN stock, which has fallen more than 35 percent since hitting a high for the year of 27.83 in January, was little changed at 18.01 in early Amsterdam trading on Monday. The stock fell to a low for the year of 15.26 on September 17. 
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