The ABN abroad.
Consolidation of results.
I
The foreign service, which now comprises 247
establishments in 44 countries, has long played a
major role in determining the image of the Bank.
This is evidenced by the composition of the
workforce (at the balance sheet date, 9,151 out of
a total of 28,688 were employed outside the
Netherlands) and by the fact that the foreign
branches together account for 34.3% of the
balance sheet total and contribute 35.5% to the
gross result.
We are gratified to be able to report that
earnings in local currency from our foreign
network were substantially greater than in the
previous year. Regrettably, with the fall in the
value of the dollar and the dollar-linked
currencies, the improvement was not translated
into guilders, the guilder surplus, both before
and after taxation, remaining at about the
1984 level.
While the United States economy and those in
Europe again improved, there are still signs of
recession in a number of other areas in which
the Bank is active, e.g. the Middle East, South
east Asia and some of the developing countries.
The risks attached to credit business in these
areas therefore remain great, necessitating a
restrictive and selective loan policy. Moreover,
fierce competition and other factors have
conspired to produce extremely slim margins.
In this situation, our policy in the current year
will continue to be directed towards improving
profitability, on the one hand by increasing the
volume of business and expanding our range of
services, and on the other by containing costs.
The sort of thing which we have in mind is well
illustrated by the establishment in the United
States of a Financial Services Group with the
task of developing and marketing advanced
products. Examples are to be found in the area
of cash management, products for the money,
capital and exchange markets - such as interest
swaps and technical models advice on
mergers, management and trust activities, and
leasing. To strengthen our position in these
markets, a great deal of effort is being put into
training specialists and supporting their efforts
with the aid of automation. The early results are
encouraging.
