ABN AMRO presents outcome of strategy review and hosts virtual Investor Update - Seite 3

Continued cost focus
We have a good track record of cost control. We are targeting costs no higher than EUR 4.7 billion in 2024, reflecting EUR 700 million of further cost savings. Costs in 2021 at around EUR 5.3 billion are expected to be higher than in 2020 at around EUR 5.1 billion (excluding restructuring costs in both years) due to an increase in regulatory levies, AML costs and strategic investments. We expect a further reduction of staff of around 15% by 2024, mostly from 2022 onwards. We will reduce the impact on staff through natural attrition and reskilling in roles where we expect shortages. We expect EUR 300 million of strategic investments and a restructuring provision of around EUR 150 million through 2023.

Cost of risk 
We reconfirm our through-the-cycle cost of risk of 25 to 30 basis points. The non-core CIB activities were an important cause of disappointing cost of risk in recent years. The wind-down of the CIB non-core portfolio is well on track and will improve the bank’s risk profile of the bank. Discipline in the execution of the sharpened risk framework will contribute to lower volatility in impairments.

Return on equity
We target a return on equity (‘ROE’) of around 8% by 2024 when the cost of risk is expected to normalise, cost-savings programmes are completed and growth initiatives are delivering. Our ROE ambition remains 10% and this will require some normalisation over time of current low interest rates.

Capital framework
We have set out our capital framework despite current uncertainties. We are committed to resuming payment of dividends, sustainably, conditions permitting and taking into account ECB recommendations. We will resume dividend pay-out at a ratio of 50% of net profit, after deduction of AT1 coupon payments and minority interests. We will adopt Basel IV as the primary capital metric with a Basel IV CET1 target of 13%. When our Basel IV CET1 ratio is above the threshold of 15% we will consider share buybacks subject to conditions and regulatory approval, not before FY2021. The threshold will be recalibrated as uncertainties reduce. Pay-out of the accrued full-year 2019 dividend will be considered prudently at full-year 2020, taking into account the status of the ECB dividend recommendation as well as conditions and prospects at that time.’