14/02/2024 - ABN Amro Bank NV: Quarterly Report 2023 Q4

Figures at a glance / Introduction

1

Figures at a glance

Introduction

Net profit/(loss)

(in millions)

Return on equity	Earnings per share
(in %)	(in EUR)

Financial

1,000
					870
800							759	545
600
354		523
400
200
0
	Q4 22	Q1 23	Q2 23		Q3 23	Q4 23

20
16			16.2
			13.6
12		9.6			9.5
8	6.4
4
	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

1.25
1.00			0.98	0.85
0.75					0.60
		0.56
0.50
0.37
0.25
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

review

Cost/income ratio	Cost of risk
(in %)	(in bps) Target is around 20bps through-the-cycle

Net interest margin

(in bps)

Additional financial

100
80	72.1	65.6			71.6
60			51.1	55.5
40
20
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

30
20
10	6	4
			0
0
-10			-10
				-13
-20
Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

200
160	150	163	159	154	152
120
80
40
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

informationRisk developments

CET1 ratio (Basel III)

(end-of-period, in %)

25
20
15	15.2	15.0	14.9	15.0	14.3
10
5
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

CET1 ratio (Basel IV)

(end-of-period, in %) Target is 13%

25
20
15	16	16	16	16	15
10
5
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

Leverage ratio (CRR2)
(end-of-period, in %)
7.5
6.0	5.2	5.0	5.0	5.2	5.3
4.5
3.0
1.5
0	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23

Capital management

Message from the CEO / Introduction

2

Message from the CEO

Key messages of the quarter

1. Good finish to the year with a net profit of EUR 545 million in Q4, reflecting continued high net interest income

and impairment releases.

1. Strong result in 2023, with a net profit of EUR 2.7 billion and a return on equity of 12.2%; all client units delivered

better results.

1. Net interest income in Q4 continued to be strong and increased to EUR 6.3 billion for 2023. Net interest income for 2024

is expected to be broadly in line with 2023.

1. Costs in Q4 were higher as we increased resources for data capabilities, further digitalisation of processes and

sustainable finance regulation.

1. Credit quality continues to be solid. Impairment releases of EUR 83 million in Q4 due to net releases on individual files and releases from model reviews and management overlays.

1. EUR 500 million share buyback announced, and final dividend proposed equivalent to EUR 0.89 per share.

1. Capital position remains strong, with a Basel III CET1 ratio of 14.3% and a fully-loaded Basel IV CET1 ratio of around 15%.

Update on capital framework and financial targets

1. We confirm our strategic choices and continue our journey as a personal bank in the digital age, serving clients where we have scale in the Netherlands and Northwest Europe.

1. We target a fully-loaded Basel IV CET1 ratio of 13.5% by year-end 2026 and are committed to generating and returning surplus equity to shareholders in combination with targeted growth.

1. For 2026, we target a return on equity of 9-10%, and a cost/income ratio of around 60%.

1. We will allocate capital in line with our strategic priorities, building on current market positions while maintaining strict portfolio discipline.

Introduction

Financial review

Additional financial information

Message from the CEO

ABN AMRO delivered a strong annual result, generating a net profit of EUR 2.7 billion and a return on equity of over 12%. The financial results for 2023 were marked by

a further recovery of our net interest income due to interest rates turning positive, lower operating costs and impairment releases. All client units delivered better results. Our strategy of being a personal bank in the digital age, serving clients in segments where we have scale in the Netherlands and Northwest Europe, is a clear driver of our improved risk profile. We confirm our strategic choices and continue to focus on attractive segments where we can grow profitably, bringing convenience into the daily lives of our clients and expertise when it matters.

Net profit in Q4 was EUR 545 million, reflecting continued high net interest income and impairment releases.

The resulting return on equity was 9.5%. Net interest income in Q4 was EUR 1,504 million despite some margin pressure on mortgages and consumer loans and the loss of remuneration on the ECB minimum reserve requirement. For 2024, net interest income is expected to be broadly in line with 2023. Costs in the fourth quarter were higher, reflecting higher staff numbers for data capabilities, the further digitalisation of processes and sustainable finance regulation. For 2024, we expect costs of around EUR 5.3 billion, as these costs will remain elevated throughout the year.

Credit quality remains solid, with impairment releases of EUR 83 million in Q4 due to net releases on individual files and releases from model reviews and management overlays. Cost of risk for the full year was -5 basis points, reflecting the credit quality of the loan book and successful recovery of client files. We recalibrated the through-the- cycle cost of risk from around 20 basis points to 15-20 basis points. We remain cautious and continue to stay close to our clients, while prudent buffers remain in place. Risk- weighted assets increased by EUR 3.6 billion. This was mainly due to model updates as part of our ongoing review of models. Our capital position remains strong, with a Basel

1. CET1 ratio of 14.3% and a fully-loaded Basel IV CET1 ratio of around 15%, after the impact of the share buyback and proposed dividend. In line with our capital framework, we propose a final cash dividend equivalent to EUR 0.89 per share. In addition, we are continuing our share buyback programme and have announced a third share buyback of EUR 500 million.

We target a 13.5% CET1 on a fully-loaded Basel IV basis by year-end 2026. We are committed to generating and returning surplus equity to shareholders in combination with targeted growth in our focus segments and in specific transition themes. We will review our capital position annually at Q4 results publication. Our dividend policy remains unchanged at 50% of net profit. For 2026, we target a return on equity of 9-10%. We expect business growth at

Risk developments

Capital management

Other

a level slightly above GDP growth. Costs for data capabilities, further digitalisation of processes and sustainable finance regulation are expected to decline by mid-2025, enabling us to invest further in revenue-generating initiatives.

Our cost/income ratio target is around 60% in 2026.

In the past year, we faced challenges such as the continued climate crisis, inflation, and the energy crisis sparked by the war in Ukraine. I remain concerned about the ongoing uncertainty in the geopolitical environment, especially in Ukraine and the Middle East, and our thoughts are with all those affected by war. Climate change is one of the greatest challenges of our time, and ABN AMRO wants to help tackle this. Sustainability has been embedded in our strategy since 2018, and is part of our purpose, 'Banking for better, for generations to come'. We are convinced we need everyone to be part of a responsible, just and sustainable transition. I am glad that our bank can play a role here.

We seek long-term value creation for all our stakeholders, financial as well as non-financial. Healthy profits enable us to invest in growth, safe and secure banking and innovative products for our clients. I am pleased that the availability of our online and mobile services is very stable.

Strong, safe and profitable banks are important for society as they support economic growth by financing companies and investments, facilitating the payment system and helping detect financial crime. A healthy profit is also key to ensuring confidence and trust in banks, contributing to financial stability.

Message from the CEO / Introduction

3

After having served two terms as Chief Risk Officer, Tanja Cuppen will step down at the General Meeting in April. I want to sincerely thank Tanja for her leadership and invaluable contribution to the success of our bank. She has shown strong leadership in turbulent times and made a difference through her independent thinking, tremendous expertise and personal dedication.

Over the past few years, we have worked hard to transform the bank, creating a platform to successfully deliver on our strategy. In the next few years, we will accelerate our journey towards becoming a personal bank in the digital age with a clear licence to grow. Our staff have demonstrated tremendous agility and determination throughout this process. I am pleased that the outcome of the Employee Engagement Survey was much improved, as we could not have achieved this result without the commitment of

our people. We will continue to build on our success for the benefit of all our stakeholders and I look forward to continuing this journey with you all.

Robert Swaak

CEO of ABN AMRO Bank N.V.

Introduction

Financial review

Additional financial informationRisk developments

Capital management

Other

Update on our strategy / Message from the CEO / Introduction

4

Introduction

Update on our strategy

Strategic targets for 2026

We are executing our strategy of becoming a personal bank in the digital age for the resourceful and ambitious, the outcome of our comprehensive strategy review announced in November 2020. We confirm our strategic choices and will continue to focus on attractive segments where we can grow profitably, bringing convenience into the daily lives of our clients and expertise when it matters. We aim to be the first-choice partner for our clients in sustainability, providing distinctive expertise in supporting their transition. And we will continue to future-proof the bank, enhancing client service, compliance, and efficiency, including the further simplification of our operating model. We maintain our strict risk focus, with our culture and licence to grow as clear priorities. Our strategic pillars - customer experience, sustainability, and a future-proof bank - are the guiding principles of our strategy.

Since 2020, we have implemented a new service model that provides convenience supported by expertise at lifecycle moments. We are making progress with the Entrepreneur & Enterprise concept, combining the knowledge we have in the commercial, private and corporate parts of the bank. Our mortgage book has grown by more than EUR 5 billion since 2020 despite periods of challenging market conditions, and we saw growth in our transition theme portfolios: digital, mobility and new energy. We now operate in the Netherlands with 25 branches, while offering all services to our clients digitally or remotely. We have worked hard to restructure and reposition the bank. We have simplified the organisation into three client units, and successfully wound down the non-core part of Corporate Banking. We are validating the AML client file remediation, while continuing our efforts to ensure that our ongoing AML activities reach a sustainable and adequate level and meet regulatory requirements.

We have launched our climate strategy and are supporting our clients in their journey towards more sustainable business models and assets. We have reached our lending commitment to renewables and other technologies two years earlier than targeted and now have EUR 4 billion outstanding. When it comes to our consumer clients, we remain focused on the needs of those who are challenged by the digital offering or struggle to make ends meet by providing budget coaches and financial coaches.

We have successfully built the platform to execute further on our strategy, but we need to accelerate. In the coming years, we will continue to work on future-proofing the bank, focusing on data quality, regulatory requirements and further digitalisation of processes.

We will continue to grow in our focus segments, including SMEs as well as wealthy and affluent clients, and in our transition theme portfolios (digital, mobility and new energy). We see broadening our client base to younger generations as an opportunity and are already successfully winning more minors and students as new clients. Recently, we acquired BUX, one of Europe's most rapidly growing neobrokers, creating a powerful foundation for growth in a new generation of investors. We will further integrate the sustainability transition into our business models, leveraging our current exposures and sector knowledge. We will increasingly work with non-financial partners in for example SME lending, payments and investments, and develop digital asset capabilities to prepare for the transformation of the financial markets infrastructure. We remain open to bolt-on M&A opportunities that contribute to our strategic goals while maintaining financial discipline. We will allocate capital in line with our strategic priorities and build on current market positions while maintaining strict portfolio discipline.

We are working to improve our client offering with simplified financial solutions, optimising the user experience as we move towards a modular architecture. This will enable us to reduce time-to-market, make it easier to work with partners and reduce maintenance costs going forward. We will also reduce the number of applications. Further digital and process optimisation will enable our relationship managers to increase their commercial time. We are already piloting with a private version of ChatGPT, the new wave of artificial intelligence whose impact is only just beginning to take shape. We expect that ChatGPT will allow our staff to spend more time with our clients and help them work more efficiently. We will also remain focused on further improving our data and model landscape and will continue to invest in our own cybersecurity, monitoring threats and educating clients on how they

can best protect themselves.

We have updated our strategic targets towards 2026, replacing our previous strategic targets for 2024. Our return on equity target for 2026 is 9-10% and we target a cost/ income ratio of around 60%. We remain focused on cost discipline. We have also updated our capital framework, removing the 15% threshold for considering share buybacks. Our target is a fully-loaded Basel IV CET1 ratio of 13.5% by year-end 2026 and we will review our capital position annually at Q4 results publication.

Financial review

Additional financial informationRisk developments

Capital management

Other

Our strategic targets for 2026

Metric

Return on equity

Cost/income ratio

CET1 ratio (Basel IV)

Dividend payout ratio

2026 targets

9 - 10% c. 60% 13.5%

50% of net profit

Update on our strategy / Message from the CEO / Introduction

5

Details on market share, client satisfaction, diversity and inclusion, digitalisation and sustainable client loans and assets remain included in our disclosures. We continue to progress steadily on the execution of our climate strategy, including our carbon reduction targets, and will communicate the second wave of targets for agriculture and inland shipping in our annual report, to be published in March 2024.

Introduction

Financial

Later in the year, we will provide further updates on our ambitions for our leading strategic non-financial KPIs.

review

Performance on our strategic targets

Our strategic KPIs for 2023

Strategic pillars	Metric	2024 targets7		2023 results	2022 results
Customer experience
	Relational NPS1				First half 2022
	Mortgages	> 0	-1	0
	SMEs (incl. self-employed)	> 0	-46	-38
	Market share growth in focus segments
	New production mortgages	20%	14%	17%
	SMEs2	20%	16%	16%
Sustainability
	Supporting clients' transition to sustainability
	Percentage sustainability (acceleration) asset volume3	36%	34%	31%
	Diversity & Inclusion
	Percentage of women at sub-top	34%	31%	31%
Future-proof bank
	Digitalisation
	Straight-through-processing rate of high volume service and product processes4	90%	65%	63%
	Financial targets
	Absolute cost base (in EUR billions)5	<4.7	5.1	5.3
	Through-the-cycle cost of risk (in bps)	20	-5	3
	Return on equity	10%	12%	9%
	CET1 ratio (Basel IV)6	13%	15%	16%

1. Net Promoter Score is calculated as the percentage of promoters minus the percentage of detractors.
2. Market share SMEs is based on previous year-end results.
3. For definition of sustainability (acceleration) asset volume, see Operational sustainability KPIs table.
4. High volume service and product processes in scope are considered to be generic service, transaction banking and (home and other) financing solutions processes key to serving Personal & Business Banking and Wealth Management clients (i.e. the client segment with the highest client volumes) with the highest annual transaction volumes (i.e. annual transaction volumes of ≥30,000). In 2023, the amount of processes in scope has been changed due to the improvement of our recording of processes. This resulted in an increase of our straight-through-processing rate and this progress is not reflected in the outcome of our STP score of 65%. The comparative figure has not been adjusted.
5. Excluding large incidentals in 2022 (Q1: EUR 50 million, Q2: EUR 34 million, Q3: EUR 12 million, Q4: EUR 34 million) and 2023 (Q2: EUR 20 million, Q4: EUR 81 million).
6. CET1 ratio (Basel IV) is rounded to the nearest whole percent. For more information about CET1 ratio Basel IV, please refer to the Capital section in the Risk, funding & capital chapter.
7. 2024 targets will be replaced by the strategic targets for 2026. For more information please refer to the Update on our strategy section.

Additional financial informationRisk developments

Capital management

Customer experience

We focus on attractive segments in the Netherlands and Northwest Europe where we can grow profitably and further develop our leading positions in mortgages and SMEs by offering new propositions.

ABN AMRO's market share in new mortgage production decreased to 14% in 2023, reflecting strong competition and our focus on sustainable margins. Our market share for SMEs remained at 16% in a competitive market.

Other

Update on our strategy / Message from the CEO / Introduction

6

Introduction

As we increasingly become a personal bank in the digital age, the digital experience remains the most valued element of our service for clients. Our NPS for mortgages was close to target, and our NPS for SMEs came down while we continued to invest in our new client service model. As we continue to optimise our processes, we will also work to reach out to our clients more proactively. Contact with our employees and their expertise is the most important reason for clients to recommend our bank.

Sustainability

We aim to increase the asset volume of sustainable client loans (including mortgages and corporate loans) and ESG and impact investments from around one-fifth to over one-third in 2024. The Sustainability Acceleration Standard (SAS) KPI rose from 31% to 34%. Sustainable loans at Corporate Banking grew from 19% to 25%, mainly due to a rise in these loans to Commercial Real Estate clients and New Energy. At Wealth Management we have now brought impact investing within reach for a larger group of clients through the Impact Funds Mandate, making the full breadth of the ESG investment spectrum available to all clients.

To live up to our purpose and achieve our strategic goals, we need to have the right talent on board and continuously invest in diversity and inclusion. A key factor is fostering an inclusive climate for both our people and our clients - an

environment that reflects the diversity of our society. This is important for employee engagement and a pleasant working environment and makes for a better risk culture and decision-making. The percentage of women in the sub-top remained at 31%.

Future-proof bank

We are building a future-proof bank. In the digital age, our personal touch is often digitally enabled, combined with expertise as our main differentiator. Clients expect easy digital delivery through apps, fully digital services and seamless self-service. As we transform into a personal bank in the digital age, we are staying close to our clients in a different way, including through our mobile banking app which now also enables direct contact by phone or video call.

We adapt our IT systems and organisation on an ongoing basis to the developing requirements of our bank-wide strategy and evolving approach to data and data quality. For all high-volume processes, our focus is on end-to-end digitalisation - to enable the digital-first customer experience, but also to increase efficiency. We have made further progress in the end-to-end digitalisation of our high-volume processes, but as we have broadened the scope of the STP (straight-through-processing) target, this progress is not reflected in the outcome of our STP score of 65%. All our daily banking services and products are available remotely.

Financial review

Additional financial informationRisk

Operational sustainability KPIs

		Targets		Results
	2024	2023	20234	2022
Percentage sustainability (acceleration) asset volume1
- ESG + impact investments	42%	40%	47%	46%
- Residential mortgages	34%	31%	30%	28%
- Corporate loans to clients2	27%	21%	25%	19%
Total	36%	32%	34%	31%
External rating
S&P Global ESG Dow Jones Sustainability Index3	top 5%	top 5%	top 20%	top 15%

1. The definition of sustainability (acceleration) asset volume is based on ABN AMRO's Sustainability Acceleration Standards. These standards contain internal definitions with regard to clients' sustainability policies, practice and governance. The overall target for sustainability (acceleration) asset volume is calculated as the sum of sustainability (acceleration) asset volume (mortgages and corporate loans) and sustainability (acceleration) client asset volume, divided by the sum of the outstanding mortgage loan book, corporate loan book and relevant client asset volume.
2. Corporate loans include loans from all three client units. Non-core loans are not included.
3. The result indicates to which extent ABN AMRO deviates from the highest score of the industry leader.
4. In 2023, ABN AMRO has implemented the EU Taxonomy and included Taxonomy-aligned loans (mortgages and corporate loans) in the sustainability (acceleration) volume. The addition of Taxonomy-aligned volume does not have a substantive impact on the total percentage that is reported as sustainability (acceleration) asset volume as most of these loans were previously categorised as acceleration volume already.

developments

Capital management

Progress on our financial targets is addressed in the relevant sections of this report.

Other

Results / Financial review

7

Financial review

Introduction

This financial review includes a discussion and analysis of the results and sets out the financial position of ABN AMRO.

Results

Financial review

Operating results

(in millions)	Q4 2023	Q4 2022	Change	Q3 2023	Change
Net interest income	1,504	1,564	-4%	1,533	-2%
Net fee and commission income	452	443	2%	442	2%
Other operating income	85	-145		237	-64%
Operating income	2,041	1,861	10%	2,211	-8%
Personnel expenses	647	634	2%	627	3%
Other expenses	815	709	15%	601	36%
Operating expenses	1,462	1,343	9%	1,228	19%
Operating result	580	518	12%	983	-41%
Impairment charges on financial instruments	-83	32		-21
Profit/(loss) before taxation	662	486	36%	1,004	-34%
Income tax expense	117	132	-11%	246	-52%
Profit/(loss) for the period	545	354	54%	759	-28%
Attributable to:

2023	2022	Change
6,278	5,422	16%
1,782	1,778
558	640	-13%
8,618	7,841	10%
2,492	2,458	1%
2,741	2,968	-8%
5,233	5,425	-4%
3,385	2,415	40%
-158	39
3,544	2,376	49%
847	509	66%
2,697	1,867	44%

Additional financial information

Owners of the parent company	545	354	54%	759	-28%	2,697	1,868	44%

Other indicators

Net interest margin (NIM) (in bps)	152	150	154	157	129
Cost/income ratio	71.6%	72.1%	55.5%	60.7%	69.2%
Cost of risk (in bps)1	-13	6		-5	3
Return on average equity2	9.5%	6.4%	13.6%	12.2%	8.7%
Dividend per share (in EUR)3	0.89	0.67		1.51	0.99
Earnings per share (in EUR)3 , 4	0.60	0.37	0.85	2.99	1.96
Client assets (end of period, in billions)	317.7	301.2	309.0
Risk-weighted assets (end of period, in billions)	140.2	128.6	136.6
Number of internal employees (end of period, in FTEs)	20,872	20,038	20,513
Number of external employees (end of period, in FTEs)	4,092	4,575	4,231

1. Annualised impairment charges on loans and advances customers for the period divided by the average loans and advances customers (excluding at fair value through P&L) on the basis of gross carrying amount and excluding fair value adjustments from hedge accounting.
2. Annualised profit/(loss) for the period, excluding payments attributable to AT1 capital securities and results attributable to non-controlling interests, divided by the average equity attributable to the owners of the company excluding AT1 capital securities.
3. Annualised profit/(loss) for the period, excluding payments attributable to AT1 capital securities and results attributable to non-controlling interests, divided by the average outstanding and paid- up ordinary shares.
4. For Q4 2023, the average number of outstanding shares amounted to 865,575,379. (Q3 2023: 865,575,379; for the year 2023: 871,515,973; 2022: 907,707,706).

Risk developments

Capital management

Other

Large incidentals

Q4 2023

Provision for variable interest compensation

During Q4 2023, the provision for client compensation was raised by EUR 34 million, mainly due to an increase in average compensation for ICS clients. This provision was recorded in net interest income at Personal & Business Banking.

Goodwill impairments

In Q4 2023, the result of the annual impairment test triggered a EUR 81 million goodwill impairment in relation to a number of past acquisitions. No goodwill remains on the balance sheet after this impairment.

CB non-corewind-down

In Q4 2023, a EUR 85 million tax benefit for deferred tax assets was recognised for our remaining US business activities.

Results / Financial review

8

Q3 2023 & Q4 2022

TLTRO programme

During Q4 2022, TLTRO III terms and conditions changed, resulting in a loss of

EUR 319 million recorded in other operating income at Group Functions. This amount was partially offset by the discount of EUR 60 million from the TLTRO programme, which was recorded in net interest income.

Collective Labour Agreement

In Q4 2022, ABN AMRO concluded a collective labour agreement (CLA), resulting in structural salary increases, and a one-off payment of EUR 34 million in Q4 2022 recorded in personnel expenses.

Introduction

Financial review

Fourth quarter 2023 results

Net interest income (NII) amounted to EUR 1,504 million in Q4 2023 (Q4 2022: EUR 1,564 million). Excluding large incidentals, NII increased by EUR 34 million compared with Q4 2022, mostly due to higher deposit margins recorded in all client units. This was partly offset by asset margin pressure in the mortgages and consumer loan portfolios, as well as lower Treasury results (also impacted by the loss of remuneration on the ECB minimum reserve requirement).

The net interest margin amounted to 152bps in Q4 2023 (Q4 2022: 150bps). The increase was due to a decline in the average amount of total assets on the balance sheet this quarter.

In comparison with Q3 2023, net interest income (excluding large incidentals) increased by EUR 5 million, mainly due to a slight improvement in corporate loans margins, even though average volumes decreased. Improvement in Treasury result was more than offset by the negative impact of the introduction of zero interest rate on the mandatory cash reserve, which was mostly visible as of this quarter.

Net fee and commission income, at EUR 452 million in Q4 2023 (Q4 2022: EUR 443 million), increased by EUR 9 million mainly due to growth in asset management fees, payment services, and ICS credit card usage. This was partly offset in Corporate Banking, where fee income on payment services and corporate finance declined. Compared to the previous quarter, fee income increased by EUR 10 million, mostly due to growth in asset management fees driven by improved market performance, and higher service fee income at Wealth Management (where volumes were boosted by a campaign) and Clearing.

Other operating income totalled EUR 85 million in Q4 2023 (Q4 2022: negative EUR 145 million). Excluding large incidentals, other operating income decreased by

EUR 89 million, mainly due to a decline in volatile items. These items came down by EUR 166 million in comparison with Q4 2022, due to lower asset and liability management results at Treasury (negative EUR 118 million in Q4 2023 versus EUR 38 million in Q4 2022), lower CVA/DVA/FVA1 results (negative EUR 23 million in Q4 2023 versus negative EUR 2 million in Q4 2022) and higher equity participation results (EUR 21 million in Q4 2023 versus EUR 10 million in Q4 2022).

Note that asset and liability management results at Treasury included a loss on the sale of a public sector loan portfolio and break funding costs resulting from other smaller portfolio sales (offset at P&BB).

The abovementioned decrease in volatile items was partly offset by higher fair value adjustments from IFRS 17 "Insurance contracts".

Compared with Q3 2023, other operating income decreased by EUR 152 million, solely due to volatile items which decreased by EUR 172 million.

Personnel expenses totalled EUR 647 million in Q4 2023 (Q4 2022: EUR 634 million). Excluding large incidentals, personnel expenses increased by EUR 47 million compared with last year. This increase was mainly related to a salary increase as part of the collective labour agreement (CLA) and an increase in FTEs.

Compared with Q3 2023, personnel expenses increased by EUR 20 million, mainly due to an increase in FTEs.

Additional financial informationRisk developments

Capital management

Other

Internal FTEs numbered 20,872 FTE in Q4 2023, an increase of 833 FTE from Q4 2022. The increase is mainly in Corporate Banking and in Group Functions. Compared with Q3 2023, the number of FTEs grew by 358 FTE. The increase versus both comparative periods is, amongst others, driven by regulatory and data programs.

Other expenses amounted to EUR 815 million in Q4 2023 (Q4 2022: EUR 709 million). Excluding large incidentals and regulatory levies, other expenses went up by EUR 40 million, mainly reflecting an increase in consultancy expenses and higher marketing costs.

Compared with Q3 2023, excluding large incidentals and regulatory levies, other expenses grew by EUR 66 million, mainly due to an increase in consultancy costs and higher marketing costs.

Impairment charges showed a release of EUR 83 million (Q4 2022: EUR 32 million addition), resulting in a cost of risk of -13bps (Q4 2022: 6bps). Impairment releases were recorded for corporate and consumer loans, mainly in stages 1 and 3, partly offset by impairment charges for residential mortgages.

Income tax expense was EUR 117 million in Q4 2023

(Q4 2022: EUR 132 million), resulting in an effective tax rate of 17.6%, which is significantly lower than the Dutch corporate income tax rate of 25.8%. The difference is mainly attributable to the recognition of a deferred tax asset of EUR 85 million for losses in the US resulting from the CB non-corewind-down (large incidental), partly offset by the impact of non-deductible interest resulting from Dutch "thin capitalisation" rules for banks and the non-deductible Dutch banking tax.

Profit attributable to owners of the parent company amounted to EUR 545 million in Q4 2023 (Q4 2022: EUR 354 million). After coupons attributable to AT1 instruments, this amount was EUR 523 million in Q4 2023 (Q4 2022: EUR 332 million).

RWA increased by EUR 3.6 billion compared with

30 September 2023, mainly reflecting a rise in credit risk RWA due to model updates, partly offset by seasonal business developments. Operational risk RWA remained unchanged. Risk-weighted assets related to market risk showed a slight decline, as expected volatility decreased marginally.

Full-year results

ABN AMRO's full-year profit for 2023 amounted to EUR 2,697 million and improved significantly compared with 2022 (EUR 1,867 million).

Results / Financial review

9

Return on Equity for 2023 was above target at 12.2%, compared with 8.7% in 2022.

Net interest income increased by EUR 856 million to

EUR 6,278 million in 2023, compared with EUR 5,422 million in 2022. Excluding large incidentals, net interest income increased by EUR 979 million, mainly due to higher interest margins on deposits. This was partly offset by asset margin pressure, mainly for residential mortgages (while average volumes increased) and consumer loans, and lower Treasury results.

Net fee and commission income totalled EUR 1,782 million in 2023, flat in comparison with EUR 1,778 million in 2022. The marginal increase in fees compared with 2022 was mainly attributable to improved fee income from payment services driven by higher credit card usage and increased package pricing at P&BB. This was offset by a decrease at Corporate Banking, partially due to lower income from corporate finance fees.

Other operating income amounted to EUR 558 million in 2023 (2022: EUR 640 million). Excluding large incidentals, other operating income decreased by EUR 226 million, mainly due to a decline in volatile items. The decline was driven by lower asset and liability management results at Treasury (negative EUR 137 million in 2023 versus EUR 248 million in 2022, excluding the TLTRO amendment loss, lower CVA/DVA/FVA1 results (negative EUR 8 million in 2023 versus EUR 60 million in 2022) and higher equity participation results (EUR 97 million in 2023 versus

EUR 67 million in 2022, excluding the divestment of MP Solar in 2022). Note that asset and liability management results at Treasury included a loss on the sale of a public sector loan portfolio and break funding costs due to other smaller portfolio sales (offset at P&BB). The abovementioned decrease in volatile items was partly offset by higher fair value adjustments from IFRS 17 "Insurance contracts" and positive equity stake revaluations (mainly CB non-core).

Personnel expenses increased by EUR 34 million to total EUR 2,492 million in 2023 (2022: EUR 2,458 million). Excluding large incidentals, these expenses increased by EUR 68 million, mainly due to salary increases as part of the collective labour agreement (CLA) and a rise in FTEs, especially in H2 2023, related mainly to regulatory activities and strategy execution (including IT).

Other expenses decreased by EUR 227 million to EUR 2,741 million in 2023 (EUR 2,968 million in 2022). Excluding large incidentals and regulatory levies, this decrease was EUR 169 million, mainly due to a reduction in external staffing expenses related to our AML and

IT activities.

Introduction

Financial review

Additional financial informationRisk developments

Capital management

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