Financial Target
Return on Equity
As announced with the full year 2004 results, ABN AMRO has adopted a financial target of a 20% average return on equity over the period 2005—2008.
Please note that for the purpose of the calculation of the average return on equity (ROE), the equity figure in a given year is derived by adding the level of equity on 1 January and the level of equity on 31 December, divided by two. It should be noted that the 'special component of equity' will not be included in the calculation.
The ROE target aids the allocation of resources to those areas with the highest incremental ROE. Cascading the concept of ROE requires linking ROE to key financial and operational value drivers of the business that can be influenced by individuals.
2006 Return on Equity Overview
(in millions of euros) | 1 Jan
2006 | 31 Dec
2006 | 2006 |
| Net profit attributable to shareholders | | | 4,715 |
| Shareholders' equity | 22,221 | 23,597 | |
| -/- Special component of equity (SCE) | (404) | (89) | |
| Shareholders' equity excl. SCE | 21,817 | 23,508 | |
| Average shareholders' equity excl. SCE | | | 22,663 |
| Adjusted average equity | | | 22,827 |
| Return on equity (%) | | | 20.7% |