ABN Amro takes $200m hit from failure of a single client

Dutch bank ABN Amro has announced a $ 200 million drop in profits after recent market volatility caused a customer to fail in its catering business for proprietary trading companies.

ABN Amro Clearing was forced to liquidate the positions of its anonymous client at significant loss after the company was unable to respond to margin calls on its options and future transactions in the United States.

The resulting net loss of $ 200 million (€ 183 million) to the customer is equivalent to 9% of the group’s annual profit.

ABN shares fell 5% at the start of trading on Thursday, compared with a 2% drop in the broader Stoxx 600 index.

ABN – which is majority controlled by the Dutch state after being bailed out during the 2008-2009 financial crisis – was already under pressure since the start of the coronavirus pandemic due to its high exposure to the energy sector.

In February, it announced a second review of its corporate and investment banking activities in as many years. It suffered a sharp increase in bad debts among customers in the offshore oil and gas sector, even before the recent sharp drop in oil prices.

The negotiating groups urged regulators to relax the rules for option trading, warning that current standards are adding to market volatility.

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