1、Accelerating the sustainability shift ABN AMRO Bank N.V. Integrated Annual Review 2019 Banking for better, for generations to come ABN AMRO is one of the Netherlands leading banks. We provide loans, mortgages and other banking services. We lend to companies and individuals. In doing so, we play an i

2、mportant role in society. Through our lending, we support economic growth and job creation. Were also committed to accelerating the shift to a sustainable economy by providing more sustainable financing, by working closely with clients and by building a bank fit for the future. We take a responsible

3、, long-term approach to doing business. About this report Welcome to ABNAMROs 2019 Integrated Annual Review ABN AMRO takes a core and more approach to reporting. This Review is the banks core report. It is published alongside a number of other more reports (see illustration, right). This Review expl

4、ains how, overtime, our bank creates value for its stakeholders. ABNAMRO plays an important socialrole, notjust as aprovider of banking and financial services, but also as a responsible employer. TheReview describes ABNAMROs business, strategy and performance andits support forthelong-term transitio

5、n to a more sustainable economy. Statement from the Executive Board Collectively, as ABN AMROs Executive Board, we take responsibility for the content, accuracy and integrity of this Review. We have overseen both its preparation and presentation. In our opinion, this Review gives a fair and balanced

6、 impression of ABN AMROs performance, strategy and management, as well as the banks ability to create value for stakeholders over the short, medium and longterm. The Review also addresses ABN AMROs risks and opportunities from both a financial and non-financial viewpoint. We also confirm that this R

7、eview has been prepared in accordance with the International Integrated Reporting Framework. For more information on our approach to reporting, see page 63. To prepare thisReview, weused the International Framework, as published by the International Integrated Reporting Council (IIRC). EY, our indep

8、endent assurance provider, has also assured that thisReview is in accordance with the Framework. Allabbreviations used are detailed onpage76. All our reports are available online at our download centre. Kees van Dijkhuizen Chief Executive Officer Clifford Abrahams Chief Financial Officer Christian B

9、ornfeld Chief Innovation theyre assisted by our financial coaches. ” Is there room for growth? “Eighty percent of our operations are based in the Netherlands, ahealthy market. Our share of the Dutchmortgage market grew in 2019. At the same time,clients are paying back their mortgages early because o

10、f low interest rates. So we need to pursue growth in other client segments, such as lending tosmall and medium-sized businesses. Our returns outsidethe Netherlands must improve before we canpursue further growth abroad. ” “ Two-thirds of our mortgage consultations now take place by video banking. Cl

11、ients whouse this service areextremely satisfied with it.” 4 “ Clients trust us with their money, sowedo everything wecan to keep financial transactions secure.” The world has changed since our Investor Day in 2018. What developments have taken place interms of dividends, targets and costs? “At the

12、end of 2018, everyone expected interest rates to rise but they took a downward turn instead. Interest rates in Europe fell sharply, pushing down our net interest income. At the same time, were spending more on compliance and on detecting financial crime. So we wont be able to meet our cost/income ra

13、tio target in the short term meeting that target will take a bit longer. We are, however, still one of the best performing banks in Europe in terms of returns and capital position. ” Your term ends on 22 April. How do you look back on your time as the CEO of ABN AMRO? “In the past three years, ABN A

14、MRO has delivered goodresults. Weve made great strides in terms of digitalisation. And weve launched an inspiring new purpose and strategy, which our clients and employees are enthusiastic about. I look back on all this with greatpleasure. My intended successor will press aheadwith our anti-money la

15、undering policy and withnew business models in the low interest rate environment. I have every confidence that, under hisleadership, the bank has abright future. ” 5 Contents 2 Interview with our CEO 15 Strategy we are also active in specific markets internationally. Headquartered in Amsterdam, ABNA

16、MRO provides banking and other financial services toretail, private and corporate clients. Worldwide, we employ just under 18,000 people. In the Netherlands, we are the principal bank for around 20% of the population and one in four small and medium-sized businesses. 14 14 24 15 33 82 12 6 Geography

17、 By business (in %) By location (in %) 17,977 Rest of the world Australia: Sydney Brazil: So Paulo Asia: Shanghai, Hong Kong, Tokyo and Singapore US: Dallas, New York, Chicago Belgium Germany France Greece UK Netherlands Norway Number of employees (in FTEs) Please note that ABNAMROs offices intheUni

18、ted Arab Emirates (UAE) closed in2019. During the year, the bank also solditsoperations in the Channel Islands. Europe Retail Banking Commercial Banking Private Banking Corporate most mortgages are sold through intermediaries. Competition from outside the banking sector is increasing across the boar

19、d from FinTechs andinsurers to BigTech companies. To remain competitive, we continue to focus on digitalisation, on reinventing business models and on working closely with partners and clients. To remain relevant to clients, we provide expertise, cost efficiency and effective capital management. 148

20、.2 12.2 90.2 16.4 Retail BankingCommercial BankingPrivate BankingCorporate Finance; Risk Management HumanResources Group Audit; Strategy Legal; Corporate Office and Brand, Marketing human rights were also the centre of the Dutch Banking Sector Agreement, introducedin 2016.4 13 1 For Group 1 banks. S

21、ource: Basel Committee on Banking Supervision (results of the cumulative quantitative impact study). 2 Targeted Review of Internal Models. 3 The timescale varies: banks have two years in the case of non-collateralised NPEs, and up to seven years for collateralised. In recent years, technology has fu

22、ndamentally changed banking. Clients expect 24/7banking wherever they are in the world - exactly the same access offered by otherservice providers. They also expect constant innovation. Technology is becoming faster, less expensive and more universal. As a result, banks need to invest more; inmany a

23、reas, they need to reinvent themselves. Nowadays, most retail banking is conducted digitally. Finance has become a digital industry. Its also ripe for disruption. Start-ups and tech companies are in a position to compete offering new, innovative products and services. At the same time, bank branches

24、 are closing because of the increase in mobile banking. The role of banks as an intermediary is also under pressure; companies can now deal with customers directly online, thanks to a combination of technology, open banking and new regulation, in particular with the EUs Payment Services Directive (P

25、SD II). Consumers also find themselves in the driving seat there is a premium on customer service. The risk is that banks will eventually become utilities they will be able to offer payment services and information, but will have to compete in a market where other companies also have direct access t

26、o their clients. Since the financial crisis, banks have been required to hold more capital as abuffer. To implement Basel IV, it is estimated that European banks will need just overEUR 90 billion in additional capital.1 Other regulations also affect banks capital requirements. These include TRIM2, t

27、he ECBs review of banks internal risk models. TRIM is designed to ensure consistency across the sector, and act as a frontrunner forBasel IV. At the same time, new rules are being introduced for non-performing exposures (NPE); these are loans and other credits that are not being repaid as scheduled.

28、 New rules require banks to fully provision their NPEs.3 ABN AMRO is wellcapitalised and in a good position to meet stricter requirements. Atthe end of2019, ABN AMROs fully-loaded CET1 capital ratio stood at 18.1%, well within the banks17.5-18.5% target range. ABN AMROs CET1 ratio includes EUR 10 bi

29、llion inrisk-weighted assets added in anticipation of TRIM and further model reviews. UnderBasel IV, our ratio at the end of 2019 stood at over 14%. Banking has gone digital3 Banks are adjusting to higher capital requirements4 14 Strategy at the same time,we work hard to protect data privacy and sec

30、urity. In many cases, our goal is totake the hassle out of banking. Were also extending self-service features in theNetherlands, these are proving very popular. In our processes, were removing thepaper so theres no longer the need for pen-and-ink signatures. Engagement with clients has decreased bec

31、ause of digitalisation; in response, weve introduced special real-time triggers to ensure we maintain continuous contact and support ourclients. We are introducing newapps, and extending video banking that allows us toserve clients outside theusualbank opening hours. We are also putting more money i

32、nto FinTech through ourEUR 100 million ABN AMRO Ventures1. To support thisapproach, weare establishing partnerships to develop new products and services. Indoing so, wewillretain the client relationship; our partners will contribute new technologies andsolutions. Strategic pillar 1Strategic pillar 2

33、 1 Formerly ABN AMROs Digital Impact Fund. 17 Strategy implementation ABN AMRO announced its refreshed strategy in November 2018. In 2019, the focus was on implementation. To oversee this process, we have put in place a dedicated strategy execution team, overseen by ABN AMROs Chief Innovation we tak

34、e our role as a gatekeeper very seriously. At the same time, we are increasing our capacity, so we can keep up with theregulatory agenda. We know that clients expect banking to be safe, which is why we put such emphasis on data privacy and protection. What are we doing? ABN AMRO is rationalising its

35、 product portfolio, streamlining processes, changing its service model, and continuing to rejuvenate its IT systems. Using new technologies should make the bank quicker and more responsive. We are looking to progress tothe next level of digitalisation and productivity; were doing this through produc

36、t rationalisation, by changing the service model and balancing investments, while becoming more prudent and efficient in how we deliver our products and services. Weare employing Artificial Intelligence to support regulatory compliance. OurITtransformation is on track; wehave put in place a DevOps p

37、rogramme, combining IToperations and software development to help make us more efficient. Weare also cutting costs: our aim now isto reducecosts byEUR 1.1 billion by the end of 2020.1 Internally, we are developing aworkforce that is fit for the future. That means having the right person at the right

38、 place at the right time. We are focused on attracting and retaining talent, and investing in our workplace to increase productivity and improve the employee experience. Build a future-proof bank Strategic pillar 3 1 Compared with 2015. 18 Key indicators NPS Private Banking (-1), NPS Commercial Bank

39、ing (-2), NPS Corporate we are currently enhancing our methodology forthis metric. 3 Sustainable financing is a new KPI which is still under development. Weexpect toreport results in 2020. 4 Please note that our target for 2022 will be reviewed to reflect the EU taxonomy forsustainable activities. 5

40、 This target was originally set at EUR 16 billion; it has been readjusted toEUR22.5billion. 6 CASY - Client Assessment on Sustainability. 7 This target was originally set at -3; it has been readjusted to -10. 8 This target was originally set at +3; it has been readjusted to +1. 9 This target was ori

41、ginally set at +3; it has been readjusted to +9. 10 This target was originally set at +36; it has been readjusted to +29. For more details on non-financial indicators please see page 70. To support implementation of our strategy, weve put in place a series of performance targets. 19 How we create va

42、lue Input Banking for better, for generations to come Our strategic pillars Our purpose Viable business model System stability Talent attraction Customer experience Co-creation and innovation Digitalisation Support our clientstransition to sustainability Reinvent the customer experience Build a futu

43、re-proof bank Responsible investment these include personal, commercial andcorporate lending, mortgages, payments, savings, advice, and asset management. In return, we receive aninterest margin, fees andcommissions. From our income, we meet our operating costs, reinvest in our business andpay out re

44、turns toourinvestors. S a vi n gs Fi n a nc ia l s er vi c es R ei n ve st a n d pa y ou t In te re st , f ee s an d c o m m is si o ns OutcomeOutput Financial In 2019, we generated value through dividends and interest payments, salaries, taxes and lending. Atthe same time, we took in financial capi

45、tal - in the form of net interest income, fees and commissions. Financial value was also affected by a decline in our share price. Manufactured During the year, we created manufactured value through home ownership and by providing faster access to banking services. Intellectual Through advice, we cr

46、eated intellectual value for clients. We also took in intellectual capital from others, including suppliers and business partners. At the same time, there were adverse effects, forinstance from incidents of cybercrime. Human During the year, employees continued to contribute time, skills and knowled

47、ge. In return, we created value through training, development and increased well-being. We also consumed human capital through services provided by business partners. Social We created social value, largely through the benefits of home ownership and an increase in the banks brand value. That said, s

48、ome clients had financial difficulties, struggling to repay loans and mortgages. Through lending, we may also have cases in our wider value chain of fraud, low pay or labour rights violations. Natural During 2019, we depleted value through carbon emissions, use of natural resources and pollution, bo

49、th through our own operations and as a result of our lending and investment activities.3 EUR 1.28 Proposed full-year dividend per share EUR 634 million Corporation tax paid EUR 3.4 billion Interest paid to clients and ECB EUR 148.2 billion Size of residential mortgages portfolio EUR 99.1 billion Total corporate loans to business clients EUR 20.6 billion Sustainable investments (clients assets) 3.2 Trust