AMSTERDAM: Dutch bank ABN Amro is on track for privatisation by year-end, its chief executive said on Friday, after it posted an 86 per cent jump in second-quarter profit on the back of a brightening economy and a sharp fall in bad loans.

Since its nationalisation at the height of the 2008 financial crisis, the bank has shed operations and refocused on Dutch retail and commercial clients, along with a strong international private banking business.

“Our performance, including our financial results, the outlook for the Dutch economy and the fact that preparations for the bank’s IPO are on track for a possible listing later this year give us confidence in the future,” CEO Gerrit Zalm said.

Zalm told reporters at the bank’s Amsterdam headquarters the market climate is “optimal” for the listing and that he sees “no major obstacles apart from obtaining the necessary licences”.

The bank earlier reported underlying second-quarter net profit of 600 million euros (Dh2.49 billion; $677.4 million), up from 322 million euros a year earlier.

ABN’s Tier 1 capital ratio, a key measure of solvency for banks, is at 14 per cent, which is high by European standards.

At the end of the quarter the bank reported a book value of 15.9 billion euros, as Deutsche Bank and Morgan Stanley prepare the bank for a listing in which the Dutch government will sell an initial stake of 25 per cent.

ABN Amro said it had booked “exceptionally low” charges on bad loans and other receivables of 34 million euros in the three months to June 30, down from 342 million euros a year earlier.

The figure was not representative for the full year, it said.

The decline was mainly driven by improved economic circumstances, with retail clients and small businesses recovering as the housing market and economy gain steam, the bank said.

After shrinking in 2012 and 2013, the Dutch economy grew 1 per cent in 2014 and is forecast to grow 2 per cent this year.

A series of official indicators this week showed rebounding retail spending, consumer confidence and falling unemployment. The government’s Bureau for Economic Policy Analysis this month upped its prediction for 2016 GDP to 2.4 per cent from 2.1 per cent.

—Reuters