UPDATE 3-ABN Amro hopeful of 2021 recovery, despite low interest income

* ABN Amro Q4 net profit of 54 mln euros beats expectations

* Net interest income disappoints

* Impairments lower than expected

* Shares fall almost 4% (Adds CFO quotes, details on interest income outlook, share price move and analyst quote)

AMSTERDAM, Feb 10 (Reuters) - ABN Amro is hopeful it will see a recovery in the second half of the year, provided the rollout of vaccination boosts the economy and offsets the impact of low interest rates on profit margins, it said on Wednesday.

ABN reported a net profit of 54 million euros ($65.49 million) for the fourth quarter of 2020, 83% lower than a year earlier, but higher than the average analysts’ estimate of 35 million euros.

Its net profit was helped by impairments on bad loans. At 220 million euros, they were almost a third lower than a year earlier, as the COVID-19 crisis had less impact than feared.

Net interest income, however, fell 15% to 1.35 billion euros during the quarter, slightly worse than analysts’ expectations and at the lower end of the bank’s own forecast.

Interest income is expected to improve, provided the economy starts to recover, Chief Financial Officer Clifford Abrahams said.

“We’ll see continuing pressure from negative rates on deposit margins,” Abrahams told reporters. “We expect some declines after Q1, but then stabilisation and in due course growth as the economy picks up.”

ABN Amro shares traded down 3.7% at 0900 GMT in Amsterdam, as analysts worried about low rates.

“ABN has a clear recovery path, albeit very challenged, notably by lower interest rates, and the impact on its net interest income,” KBC Securities wrote in a note.

The vaccination rollout throughout Europe will eventually enable economies to re-open, increasing demand for loans, Chief Executive Robert Swaak said.

“The vaccination programme will facilitate a significant lifting of restrictions, rapidly leading to a strong economic rebound in the second half of the year,” he said.

Swaak said the bank was well positioned to pay out the postponed 2019 dividend, once the European Central Bank (ECB) lifts its pandemic restrictions on shareholder rewards. But a 45 million euros full-year loss means there will be no 2020 dividend.

ABN also said it intended to appoint Lars Kramer as its new CFO, as soon as the ECB approves his nomination.

$1 = 0.8248 euros Reporting by Bart Meijer; Editing by Christian Schmollinger, Rashmi Aich and Barbara Lewis