(Bloomberg) -- ABN Amro Bank NV raised its outlook for lending income, showing how Europe’s high interest rates continue to provide tailwind for the banking industry.
The Dutch lender lifted the full-year guidance for the metric to above €6.4 billion ($7 billion) from about €6.3 billion previously thanks to “higher-for-longer interest rates,” it said in a statement on Wednesday.
Profit in the three months through June came in at €642 million, beating analyst expectations.
ABN Amro’s shares rose as much as 4.1% in Amsterdam.
ABN Amro Chief Executive Officer Robert Swaak has announced he’s leaving in a surprise move that came just over three months after he got reappointed for a new term. He didn’t explain his decision to step down next year and the bank hasn’t named a successor yet.
His announcement also came shortly after ABN Amro agreed to buy German bank Hauck & Aufhäuser Lampe Privatbank AG as part of its effort to grow in wealth management. The deal will make it the third-biggest private bank in Germany, it has said.
On Wednesday, Swaak didn’t provide any new details on his decision to step down although several analysts asked about it on the earnings call. There were no disagreements with the supervisory board over M&A, Swaak only said.
ABN Amro’s second-quarter net interest income — the difference between what a bank earns on loans and pays for deposits — inched up 1% from the previous three months, it said in the statement. While the metric’s growth has slowed, it has so far defied expectations that it would start contracting now that the European Central Bank has started cutting rates.
The boost in outlook for lending income was “unexpected,” KBC Securities analyst Thomas Couvreur said in a note to clients.
ABN Amro, which counts the Dutch government as its largest shareholder, released funds set aside for souring loans. Analysts had anticipated provisions to rise instead.
The CET1 ratio — a key measure of financial strength — stood at 13.8% in the second quarter, below estimates.
--With assistance from James Cone.
(Updates with details and share move)
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