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Investing.com -- Shares of ABN Amro ( Euronext (EPA:ENX):ABN) climbed 4% following the bank’s fourth-quarter earnings announcement.
Despite a headline miss, the bank reported a net profit of EUR 397 million, which exceeded analyst expectations after adjusting for several one-time items. The company’s earnings were bolstered by lower-than-expected loan losses and a strong net interest income, which beat consensus estimates.
ABN Amro’s Q4 earnings were marked by a net profit that fell short of consensus forecasts by EUR 36 million. However, the market responded positively to the bank’s adjusted figures. Loan losses were significantly lower than anticipated, coming in at just EUR 9 million compared to a consensus estimate of EUR 89 million.
The bank’s reported pre-provision results were 9% below expectations, but revenues exceeded forecasts by 3%, and operating expenses aligned with consensus after adjusting for non-operational items totaling EUR 118 million.
The bank’s net interest income outperformed, with a 4% beat over consensus, although it included EUR 50 million in temporary treasury income. Excluding these one-offs, the net interest income was close to consensus predictions. The bank also saw a 6% increase in net fee and commission income over consensus, with growth across all subsegments.
Expenses excluding levies rose 13% quarter over quarter and 8% YoY on both a reported and adjusted basis. The reported expenses for Q4 included non-recurring items such as EUR 95 million in legal provisions and EUR 23 million in restructuring costs. Despite these costs, the underlying expenses were nearly in line with consensus after adjustments.
The bank’s capital position also surpassed expectations, with a Basel 3 Common Equity Tier 1 (CET1) ratio of 14.5%, against a consensus of 14.2%. The clarity on the Basel 4 ratio was a highlight, with Q4 figures mirroring the Basel 3 ratio and surpassing consensus estimates.
ABN Amro announced an interim dividend of EUR 0.75 per share, slightly below the consensus of EUR 0.77 per share. The bank has indicated it will provide an update on its capital distribution framework in the second quarter of 2025 once the impact of Basel 4 on its CET1 ratio is clearer.
RBC commented on the results, stating, "Q4 results missed at the headline level but beat consensus making a number of adjustments especially to costs. A stronger capital ratio and more visibility on the B4 ratio are positives but we will only get full clarity on capital distribution with Q2 results."
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