EUROPEAN banking group ABN Amro is cheering an increase in third-quarter profits, outpacing market expectations, and said the hard-fought acquisition of an Italian bank laid the groundwork for further growth.

The Amsterdam-based bank, which has operations in the UK, reported a profit up 35 per cent to about £812 million. Operating income was up nearly ten per cent, while operating expenses were held to a 2.4 per cent increase.

The results were lifted by the sale of the private banking unit Nachenius Tjeenk to BNP Paribas and Brazilian insurance operation Real Seguros, and exceeded analysts' profit predictions of some £529m.

Excluding the sale of the two units in the first half of 2005, chief executive Rijkman Groenink said he expected the group's net profit for the second half of the year to at least match first half profits of around £1.29 billion.

Mr Groenink said the strong performance in the first nine months was underpinned by organic growth in consumer and customer revenues in North America, Brazil and Asia as well as in its home market.

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