'Modest' rise in ABN bonuses

THE 2,500 City-based staff of ABN Amro are set to get modest bonus rises in coming days after the Dutch bank reported strong recovery in 2003 profits.

The wholesale clients unit, which accounts for the bulk of the London operation and was partly created out of the old Hoare Govett, lifted operating profits from e1m(£683,000) to e503m.

Within wholesale, the corporate finance division, which advises on mergers and acquisitions, tripled revenue thanks to a string of pan-European deals, while the private equity unit lifted revenue by 53%.

The core financial markets division - the bond trading, credit and foreign exchange dealing arm which accounts for more than half the London income - grew revenue 4%.

ABN was coy about specific bonus arrangements, only conceding 'the bonus pool was aligned with the improved results in the third and fourth quarter'.

Staff costs as a proportion of total revenue have come down from 47% to 43.5%, however, suggesting the average bonus increase has not been especially generous. London staff are to be told their individual bonuses in the next week and receive them in March.

ABN admitted it has been hurt by the Parmalat scandal, lifting provisions between the third and fourth quarter by e52m due to its exposure to the collapsed Italian food group.

The overall bank boosted underlying net profit 31% to

e2.4bn and said its fourth quarter was the best ever for profits.