The Dutch lender said it will repurchase €500 million (US$536 million) of stock. Net income rose 54% to €545 million, compared with the €449 million average estimate of analysts surveyed by Bloomberg.

European banks are paying out billions of euros to shareholders to lift their low valuations after a surge in interest rates fuelled their profits.

Yet with rates appearing to have peaked, investors are questioning how banks can continue to grow earnings and whether they face higher defaults as borrowers grapple with rising costs and economic turmoil.

ABN Amro said net interest income, the difference between what it earns on loans and pays for deposits, fell 4% to €1.50 billion from a year earlier. The Dutch lender freed up €83 million it had set aside for bad loans compared with provisions of €32 million a year earlier.

CEO Robert Swaak has pulled ABN Amro out of riskier businesses to focus on retail and corporate banking, while also seeking to draw a line under a series of scandals that have damaged the reputation of Dutch banks.

“ABN Amro delivered a strong annual result,” Swaak said in the release. “The financial results for 2023 were marked by a further recovery of our net interest income due to interest rates turning positive, lower operating costs and impairment releases.”

ABN Amro long maintained one of the highest capital ratios among European banks, reflecting a risk-averse approach after the lender’s precursor had to be rescued by the Dutch government in the financial crisis.

The Dutch lender bought back stock for the first time in 2022 with €500 million of repurchases. It conducted a second buyback of the same size last year.