Dutch state-owned bank ABN AMRO, which is being readied for a stock market listing in 2014, said its operating profit surged seven-fold in 2010, thanks mainly to lower loan losses.

The Dutch state nationalised the local ABN and Fortis entities in 2008 after the dramatic failure of a three-pronged hostile takeover of the bank by Royal Bank of Scotland, Fortis and Banco Santander.

ABN's 2010 underlying net profit, which excludes the integration and separation costs, was almost 1.1 billion euros ($1.5 billion), compared with 142 million euros in 2009, mostly due to a halving of loan impairments to 837 million euros, ABN said.

It said profit also rose as net interest income climbed 15 per cent to 4.9bn euros because of better interest rate margins on loans, especially mortgages, and saving deposits.

Overall, the bank reported a net loss of 414m euros for 2010 because of separation and integration costs, compared with a net profit of 274m euros in 2009.

Van Rutte, chief financial officer, said he expected another 400 million euros of integration costs this year and 200m in 2012 but the expected total of 1.6 billion euros would not be exceeded.

The bank said operating expenses rose 2 per cent to a total of 305 million euros due to "several large legal provisions and expenses relating to international activities conducted in the past" by its commercial, retail and private banking operations.