ABN Amro, the third-biggest Dutch lender, plans to cut about 400 additional jobs after first-quarter profit tumbled 17 per cent.

Net income fell to €415 million from €503 million a year earlier, the bank said today. Results were boosted by a €223 million release on impaired Greek government-backed corporate loans. Operating profit slid 34 per cent to €539 million.

ABN Amro is seeking to cut costs, reduce reliance on its home market and bolster earnings by expanding operations such as private banking and energy and commodities finance.

The state-owned bank said yesterday it plans to eliminate positions in its commercial and merchant-banking unit on top of an earlier announced 2,350 job reductions.

"The first quarter of 2013 can be qualified as a difficult quarter," chairman Gerrit Zalm said in the statement. "As unemployment is still on the rise and no economic growth in the Netherlands is expected for 2013, we remain cautious for the remainder of the year."

The lender plans to implement its latest round of job cuts by the end of 2015, said spokesman Arien Bikker. The reductions are the last related to the integration of ABN Amro and Fortis's former Dutch banking assets after the Dutch state took control of the businesses in 2008, chief financial officer Jan van Rutte told reporters.

The lender expects job numbers to drop by 1 per cent to 3 per cent a year structurally as it modernises information technology and as clients increasingly switch to banking by internet or mobile phone, it said in its 2012 annual report. ABN Amro had 22,926 employees at the end of the first quarter.

ABN Amro’s net interest income increased by 5 per cent to €1.31 billion from the year-ago period, while fee and commission income rose 2 per cent to €412 million.

Other non-interest income, including earnings from markets, derivative transactions and hedging, swung to a loss of €8 million from a positive €275 million a year earlier.

Impairments, excluding the release on Greek bonds, rose by 39 per cent to €259 million, mainly on mortgage, consumer and small business loan portfolios. Impairments on home loans increased to 21 basis points from 10 basis points in the first quarter of 2012, ABN said.

The Dutch economy contracted for a third straight quarter in the three months through March, extending a recession, the Dutch statistics bureau said earlier this week. – (Bloomberg)