ABN Amro’s clearing business has suffered a net loss of around $200 million after an unidentified US client got into difficulties during the market turmoil sparked by the coronavirus pandemic, the Dutch bank said on Thursday.

Shares in the bank fell around 5 per cent after it said it was forced to liquidate the US client’s position, after the customer - which traded US options and futures - failed to meet minimum risk and margin requirements.

Clearing firms guarantee that transactions between traders who use their service will settle, and they provide clients with liquidity and financing. Clients must post collateral for their positions, which in this case eroded quickly.

ABN said the pretax loss was about $250 million and it would book the provision for the loss in its first quarter results.

Spokesman Arien Bikker said the client might have incurred further losses not related to ABN Amro. “We cannot mention the (name of the) client,” he added.

ABN Amro shares have fallen 48 per cent so far this year in the market rout triggered by the coronavirus pandemic. The $200 million one-off charge at the clearing business compares with the group’s 2019 earnings of 2.05 billion euros ($2.25 billion).

“This has never happened before,” Bikker said. “We have had credit losses, but not of this size.”

In the United States, CME Group said on Friday it had auctioned off the portfolios of proprietary trading firm Ronin Capital, an apparent victim of the market turmoil in which US stocks have plunged more than 30 per cent from their peak.

ABN Amro Clearing Bank guarantees that transactions between traders who use it will settle, and provides clients with liquidity and financing. Clients must post collateral for their positions, which in this case eroded quickly.

Reuters