Dutch Banks: Spotlight on Net Interest Income in a Higher Rate Environment

DBRS Morningstar has released a commentary on the three large Dutch Banks’ (ABN AMRO, ING Group, Rabobank) H1’22 results focusing on the increase in market rates and the ECB rate hike.

Key points include:

• Dutch banks’ net interest income set to benefit from rising rates.

• Some headwinds remain in 2022 with the impact more visible in 2023.

• Downside risk from weaker loan demand as a result of higher rates and a weaker economy.

“Overall, we view the current interest rate development as beneficial for all three Dutch banks, although we also note some offsetting factors, especially in the short-term,” said Sonja Förster, Vice President, Global Financial Institutions at DBRS Morningstar. “With the reversal of the prime rate back to zero, banks have announced that they will discontinue the negative charging agreements for client deposits, however, we do not expect further rate hikes to be passed on to customers as swiftly.”