The private banking division of Dutch banking group ABN Amro has posted a net profit of €40m for the first quarter of 2019.

This is a 39% slump from last year’s profit of €66m.

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The unit’s operating profit before tax plummeted 32% to €61m from €88m.

Operating income at the private banking arm dropped 8% to €307m from €333m.

Operating expenses increased 2% year-on-year to €244m.

The unit’s cost/income ratio at the end of March 2019 stood at 79.6%, versus 72% in the previous year.

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The division’s performance was affected by the sale of the bank’s Luxembourg business to BGL BNP Paribas along with its acquisition of Societe Generale’s Belgian private banking unit.

Last month, ABN Amro also announced the sale of its Channel Islands business to the Bank of N.T. Butterfield & Son.

Overall, the banking group reported a net profit of €478m for the first quarter of 2019, down 20% from €595m in the same quarter of 2018.

ABN Amro CEO Kees van Dijkhuizen said: “We are making good progress on embedding our strategy. The economic and interest rate environment has become more demanding, and hence we are actively managing costs and working on measures to support revenues.

“We have developed new propositions, such as a mortgage facility allowing homeowners to invest up to EUR 25,000 in energy efficiency measures for their homes and a mortgage solution for seniors enabling them to cash out home equity without selling their property.

“Strict compliance is our licence to operate, and we remain vigilant in detecting financial crime. The acceleration of our Client Due Diligence remediation programmes at Commercial Banking and ICS is progressing.”