(Bloomberg) -- ABN Amro Bank NV posted a loss in the first quarter as a fine for weak anti-money laundering controls wiped out gains from releasing money stashed for doubtful loans in the pandemic.

The net loss in the three months through March was a bigger-than-expected 54 million euros ($65.5 million) after a loss of 395 million euros a year earlier. The Dutch bank said it buoyed earnings by releasing 77 million euros from its credit loss reserves.

The money laundering probe by Dutch authorities has weighed on ABN Amro as it overhauls its business to focus on retail and commercial banking and dangles the prospect of returning its high levels of excess capital to investors. The lender joined European rivals in taking a rosier view of the economic fallout from the pandemic, saying it expects the Dutch economy should rebound in the second half.

Lending income slid 11% to 1.36 billion euros in the first quarter from a year earlier as ABN Amro shrank its corporate and investment bank to reduce risk. The bank said it partly offset the hit from low interest rates by lowering the threshold for charging for deposits.

ABN Amro said it expects loan loss provisions excluding operations it is exiting to be “at or below the through-the-cycle guidance of 25-30 basis points” this year. Impairments at the corporate and investment banking businesses “remain uncertain but are expected to be significantly below last year.”

Chief Executive Officer Robert Swaak, a former PwC Netherlands chairman with experience advising organizations on know-your-customer and anti-money-laundering initiatives, was appointed to the role last year to help the lender move past the probe as well as a tax scandal. He is retreating from large parts of the investment banking business as he focuses on cost cutting and digitization.

ABN Amro posted a loss in the first quarter of last year after the collapse of a Singapore oil trading giant as well as a U.S. client’s failure to meet risk and margin requirements amid market volatility caused by the pandemic.

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