The announcement comes in the wake of its earlier December 2017 statement wherein it had hinted at the possibility of such a cost cutting measure.
On Wednesday, ABN Amro stated it would shed 250 jobs as part of a cost cutting exercise in its international corporate bank business in order to boost its profitability.
The bank said it would focus its cost cutting exercise to its Corporate and Institutional Banking (CIB) division in order to generate higher-yielding activities, including clearing, private equity and lending to Dutch corporations.
“To improve profitability, capital allocated to CIB will be reduced. This will predominantly be in global sectors, mainly in trade and commodity finance,” said Kees van Dijkhuizen, ABN’s Chief Executive in a statement.
In December, ABN had hinted at this development when it said, it would weigh the future of its corporate banking business in the light of the introduction of new regulations which have hurt its profitability. New regulations have called for banks to hold more capital for assets which have relatively higher risks.
The cut in corporate activities will reduce the risk-weighted assets on ABN’s balance sheet by $5.81 billion (5 billion euros) to 34 billion euros by 2020, said the bank.
At the end of June 2018, ABN’s CIB division employed around 2,600 employees and delivered 11% of ABN’s total net profit in the second quarter.
On Wednesday, ABN Amro reported a 28% fall in its Q2 net profit at $799.5 million (688 million euros).