Dutch Banks H1 2023 Earnings: Tailwinds Still Strong

DBRS Morningstar has released a commentary discussing the H1 2023 results of the three large Dutch Banks (ABN AMRO, Rabobank, ING Group).

• Net interest income increased significantly in H1 2023, but could be plateauing
• Asset quality is still sound, but economic conditions are deteriorating
• Capital ratios are still solid despite share repurchases by listed banks

“The three major Dutch Banks joined the ranks of European banks reporting significant H1 2023 profit increases following the steep interest rate hikes since mid-2022, further supported by still low cost of risk (COR) and lower regulatory expenses” notes Sonja Förster, Vice President, Global FIG at DBRS Morningstar. “However, given a number of factors such as the speed and extent of the rate increases, portfolio duration, lower loan demand, an inverted yield curve and deposits that have started to reprice, net interest income (NII) could have reached a peak in 2023”