NETHERLANDS – Dutch banking group ABN Amro says there may be an outflow of assets under management as it reviews the profitability of some mandates and products.
The bank said in April that it was reviewing the profitability of its existing products and mandates. It said today that that process was still under way – and that it could lead to asset outflows.
“This may lead to higher profitability at the cost of outflows of assets that are current captured by low margin products,” its said in its first-half earnings release.
Assets under management as at the end of June this year were €167.1bn, compared to €166bn a year earlier. AUM rose 4.7% from March 2005, aided by a €5.1bn currency effect.
The asset mix of mandates has changed slightly in the past year, due to a growth in alternative assets. Equities now account for 43.9%, from 46% before. Fixed income has shifted to 40.3% from 42%. Cash and other now accounts for 15.8%, from 12% earlier.
“The increase in cash and other reflects the success of asset management to grow in alternative products,” the bank said.
Net second-quarter profit at the unit rose to €46m from €17m a year ago. Group net profit rose 10.3% to €987m.