The private banking unit of Dutch lender ABN AMRO has reported an underlying profit of €54m for the third quarter of 2016, a surge of 92% compared to €28m in the year ago quarter.

The bank attributed the rise in profit mainly to lower expenses (mainly related to the settlement of an insurance claim) and slightly higher operating income.

 The unit’s quarterly operating profit before tax was €75m, a surge of 89% compared to €40m in the third quarter of 2015.

Operating income increased 1% year-on-year to €317m, while net interest income rose 8% to €159m from €147m a year earlier.

The division’s operating expenses were €241m for the period, a fall of 10% from €269m in the prior year period.   

The cost/income ratio of the private banking arm stood at 75.9%, an increase of 9.7 percentage points compared to the last year.

At the end of September 2016, client assets stood at €198.9bn, compared to €192.8bn at 30 June 2016. Net new assets (NNA) were €1.3bn.

Overall, the banking group posted underlying profit of €607m for the third quarter of 2016, an increase of 19% from €509m in the same quarter of 2015.

ABN AMRO Group chairman of the managing board Gerrit Zalm said: “We now want to take another step forward in delivering in-depth expertise in a digitally savvy way to our clients and will increase our expenditure on initiatives for growth, innovation and digitalisation by EUR 0.4 billion by 2020 compared with 2015. To finance these initiatives and offset cost inflation and levies of approximately EUR 0.5 billion, we target cost savings of a similar amount (EUR 0.9 billion) by 2020.

“Building on our Q2 cost initiatives, we have identified further cost savings of EUR 0.4 billion. This will affect approximately another 1,500 FTEs. These savings come on top of the EUR 0.2 billion for the support and control activities (announced in Q2 2016) and the EUR 0.3 billion (on track) for TOPS 2020 and Retail Digitalisation. We have sharpened the cost/income target range from 56-60% by 2017 to 56-58% by 2020.”