ABN AMRO Bank N.V.

Welcome to ABN AMRO's Q1 2026 Analyst and Investor Call. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. Analysts will have the opportunity to ask questions after the presentation. This can be done by pressing pound key 5 on your telephone keypad. I will now hand the call over to the speakers. Please go ahead.

Good morning, and welcome to ABN AMRO's Q1 2026 Results Presentation. I am joined today by OCFO and OCRO . I will cover the key messages of progress and strategy in our financial results for the quarter, and after the presentation, we will open the line for your questions. Let me begin with the key highlights of the first quarter on slide two. This first quarter was a strong start to the year, with net profit increasing 12% compared to the same period last year. We booked a net profit of $693 million, leading to a return on equity of 10.7%. There was solid growth in mortgages and corporate loans during this quarter. Growing deposit volumes were the main contributor to higher commercial net interest income. reached a record level driven by strong gearing performance resulting from high market volatility. Underlying costs declined further. We are therefore lowering our full year 26 cost guidance to around 5.5 billion. Credit quality remains solid with limited net impairment and a cost of risk of 9 basis points despite increased geopolitical uncertainty. Our capital position remains strong with a CT1 ratio of 15.5%. Let me now go into more detail on how we are delivering on our strategy targets. For our core projects, mortgages and client deposits, we are on track to reach our 28th ambition. For client deposit growth, we stand at 46% of our 28th ambition, and including the intended acquisition of an IBC at around 63%. With 2 billion of mortgage growth this quarter, 30% of our growth ambition has been realized, and again, including an IBC, this rises to around 73%. We are making sustainability more accessible and financially attractive for homeowners. Now, mortgage interest rates can be linked to the home's energy label. This rewards our clients for making their homes more sustainable. Now, turning to client assets, this quarter was impacted by market volatility and seasonal effects. However, the conversion of cash and time deposits into mandated and advisory products continued. We expanded our investment offering with the launch of regulated crypto investment projects. This gave its clients transparent access to the new asset class. In corporate banking, profitability benefited from record high clearing fees and also strong fees for global markets. This came alongside growth in our transition financing, including defense and renewable energy. Now, on the next slide, turning to our cost ambition. By sanctifying our bank and reducing run rate costs, we are delivering on our promise to right-size our cost base. Over the first quarter, FTEs again decreased by more than 500, mainly on more external staff. Total FTE reductions since the end of 24 now represent around 40% of our 28 targets. In terms of cost savings, a server of 60 million was achieved in Q1. This brings cumulative savings to around $220 million out of a total of $900 million, mainly from increased efficiency and ongoing IT streamlining. Alongside cost discipline, we are also improving productivity by embedding technology and AI more deeply in our daily work. We have moved faster than expected in achieving cost reduction, so I expect the pace to slow down somewhat from here. This quarter, We also made further progress in capital optimization, now turning on to the next page. Optimizing capital allocation is a strategic priority. Corporate banking has three reduction targets for both portfolio optimization and RWA optimization. Together, these targets attend billion reduction, and this quarter we realized an additional reduction of 1 billion. We have, therefore, now realized around 50% of our targets, mainly through RWA organizations. This reflects the partial reintroduction of the SDME support factor, improvements to our data quality, and collateral sourcing. Portfolio organizations are more gradual and include the closure of asset-based finance international. This is proceeding as planned. We have identified 8 billion of RWAs for active portfolio management, and around 20% has been securitized by the SRC transaction we executed in Q4. All these RWA reductions strengthen our capital position and enable us to invest selectively in profitable growth opportunities. We are on track with our commitment to lower the share of allocated RWAs in corporate banking, which currently amounts to 51%. Now, turning to the Dutch economy. The Dutch economy remains resilient despite the current headwinds. Q1 GDP growth slowed to 0.1% quarter-on-quarter. Over the full year, GDP growth is forecast at 1.5%, slightly downgraded due to the Iran conflict and energy shock, while inflation has been revised up to 2.8%. On housing, after two years of work, 8% price growth, we expect prices to moderate to plus 3% in 26 and plus 4% in 27. Transaction volumes hit a 10-year record of around 239,000 in 25, but are expected to decline by 2% in 26 and 4% in 27 amid heightened uncertainties and also limited supply of new homes. Despite this, the economy faces its turbulence from a position of strength. High household savings, low debt ratios, and a still tight labor market are providing meaningful benefits. I'm turning now to our financial performance for the first quarter, starting with client deposits on slide eight. The quarterly movements in client deposits should be seen in the context of some seasonal effects. Around year end, clients tend to hold more cash, while in Q1, we typically see higher tax payments. In this context, broadly flat client deposits in Q1 are a solid outcome. Over the past quarters, we have seen a continuous growth in deposits in regular strategy conditions. Turning to client assets, I already mentioned that volatile markets during March led to lower asset values. Overall, we continue to see that our commercial efforts are leading to conversion to mandated advisory projects, keeping our progress on track. Now, turning to interest income. This quarter, commercial NII improved by 36 million. Mortgage volumes continue to increase, with growth increasingly coming from government-backed mortgages. These mortgages carry lower margins, and this explains the basis point decrease in asset margin. Average liability volumes were higher, reflecting continued underlying growth in deposit volumes. This was the main driver for the growth in commercial NRI. The liability margin was broadly unchanged, reflecting a stable replicating yield. Other commercial NRI also increased in Tier 1, amongst others from higher financing demands from clearing clients. Now, turning to the interest rate outlook and what this means for us. Compared with last quarter, forward rates have risen sharply in reaction to geopolitical events. Current forward rates imply a further tailwind to our liability margin. This creates upside to our full-year commercial NII guidance, as this forward rate This could be close to 100 million additional interest income over 26. However, we have decided to keep our guidance unchanged for now. It is difficult to foresee, indeed, if these rates would persist given the unpredictable nature of current events. We expect we can narrow down our NRI guidance with our Q2 results. And now turning to our fee income. Fee income increased 6% quarter-on-quarter showing growth in scalable, capital-efficient business revenues. In personal and business banking, we introduced new pricing for final accounts at the beginning of the year, and this led to higher fees. The negative market performance in Q1 affected fees in wealth management. By contrast, the higher market volatility led to strong results for clearing due to increased trading volumes. Also, our global market activities had a good first quarter. On other operating income, it has been relatively low the past three quarters. One reason has been the lower equity participation results. Market circumstances are unfavorable for both revaluations and exits. Also, island treasury results have been lower than seen on average over the past three years. I'm now turning to OCO. Given stronger-than-expected delivery and cost predictions, we have decided to lower our cost guidance for 2016 by around $100 million to approximately $5.5 billion. Health discipline is central to our strategy. Compared to Q1 last year, we have a more or less similar cost level. However, when we exclude health, expenses are in fact down 6%, reflecting the impact of lower FTEs and lower IT costs. We are on track with integration of Hull, and this accounts for the largest part of the 63 million integration costs we've booked this quarter. For the remainder of the year, restructuring costs will be limited. We are also starting discussions on the renewal of the current collective labor agreement, which will run until the end of June. Assuming we reach an agreement, this may impact personal expenses starting Q3. Turning to our credit to our credit quality. Credit quality remains solid with a Stage 3 ratio of 2.1% and a coverage ratio of 15.8%. Impairments in Q1 were broadly at the same level as Q4, while individual impairments declined versus last quarter. Model impairments and contrasts were higher this quarter. This reflects updated macro scenarios and a significant increase of our negative scenario weighting from 30% to 55%. The negative scenario includes longer disruption to energy supplies due to the war in the Middle East. With these changes, we believe we have taken into account both first and potential second-order effects. We have not made additions to the management overlay, which remains stable at around 75 million. We continue to actively monitor potential impacts from macroeconomic and geopolitical developments on our loan portfolios. So far, we do not expect a material impact. This reflects the strong quality of our loan book, prudent risk management, and strong collateral across all of our failures. This is also reflected in our very limited private credit exposure of around 200 million. Turning now to our capital position. Our portfolio CET1 ratio rose slightly to 15.5%. This excludes the potential impact of around 70 to 80 basis points from the acquisition of NIDC, which we expect to book with Q3. RWA increased by 1.2 billion in Q1, largely related to business development and corporate banking, partly offset by data quality improvements. RWA's stock period increased from a reversal of the seasonally lower RWA in Q4 and the onboarding of new clients. The Dutch central bank has decided not to continue the mortgage floor beyond the current period ending at the end of November. Depending on market and volume developments, this could lead to a reduction of around 7 billion in our mortgage RWAs. In terms of capital implications, let me start by saying we are committed to returning at least 7.5 billion of capital by paying out up to 100% of net profit over the years 26 to 28. These represent substantial commitments. The removal of the D&D mortgage floor is an upside to our plan and all NCPO benefits our capital position. We said at the CMD that if over a period of time our capital position remains significantly above our target and we are delivering on our strategy competitions, we may consider additional distributions. While we are progressing well on our strategic delivery, we are still at the beginning of our strategic period. So before considering additional distributions, we need to seek capital consistently exceeding our target and further delivery on our strategic ambitions. Let me close with a key takeaway for the quarter. Today's results show that we are delivering on what we said we would do. In Q1, we made strong progress across our strategic priorities, worked profitably, right size of cost base, and optimized capital allocation. We showed profitable growth, adding a further $2 billion to our mortgage portfolio. We also delivered record high fees. We are keeping our NII guidance unchanged while acknowledging the potential upside from current interest rates. We also maintained strong cost discipline and have lowered our cost guidance for full year 26 by $100 million to around $5.5 billion. And with CET1 ratio of 15.5%, we remain well positioned to invest in our strategy, support our clients, or our returning capital to our shareholders. In a nutshell, we are focused, we are committed, and we continue to deliver on our promises. I thank you very much for your attention, and we will now open the line for your questions.

Thank you. If you wish to ask a question, please press pound key 5 on your telephone keypad. If you wish to withdraw your question, please press pound key 6 on your telephone keypad. The next question comes from Julia Aurora Miato from Morgan Stanley. Please go ahead.