ABN Amro is cutting back the capital allocated to its corporate and investment banking business by 20% over the next three years after a pummelling in difficult markets.

The Dutch bank posted a 21% decline in net profit before extraordinary items, to €671m ($616m), for the second quarter compared to the same period last year. Profit at the wholesale clients business unit, which provides corporate and investment banking services, fell 64% in the first half of the year compared to the first six months of 2000. Second quarter profit was 65% lower than the same period last year at €106m.