By Maarten van Tartwijk
AMSTERDAM--Dutch bank ING Groep NV Wednesday reported a rise in
second-quarter profit as it continues to reap the benefits from its
repositioning toward consumer and business lending in Europe.
The Netherlands' largest bank by assets said net profit rose 27%
to EUR1.36 billion ($1.49 billion), lifted by a EUR376 million gain
tied to the sale of its stake in Vysya Bank, an Indian lender.
Underlying pretax profit, which strips out divestments and other
special items, rose 25% to EUR1.6 billion.
The results were boosted by strong growth of ING's loan book,
which increased by EUR8.7 billion in the period, as well as a drop
in loan-loss provisions. The bank said it added 600,000 new
customers in the first six months of 2015, including in large
markets such as France, Italy and Spain.
Still, ING's shares fell around 3% in Amsterdam, as analysts
voiced disappointment over weaker profitability and rising costs.
The bank's net interest margin, the difference between the rate at
which it borrows and lends, declined to 1.43% from 1.46% last year,
while operating expenses jumped 6%.
ING attributed the weaker margins to charges on its mortgage
books and said expenses rose because of investments and higher
regulatory costs.
The Amsterdam-based lender has nearly completed an overhaul in
which it was required to divest its global insurance business. The
restructuring was ordered by the European Union's antitrust
regulator after ING received a government bailout during the 2008
financial crisis.
The proceeds of the insurance business leave ING with billions
of euros in excess capital that analyst say can be deployed to
boost dividends or pursue acquisitions. In recent weeks, ING has
been linked to the Turkish operations of HSBC Holding PLC, which
are currently up for sale.
Chief Executive Ralph Hamers declined to comment when asked
about ING's potential interest in HSBC's Turkish arm, but signaled
that he isn't planning any major acquisitions. Should ING be
looking to make deals, it will only focus on assets that support
the bank's strategy to grow organically, he said. "Asset books,
skills and technology. That's the sort of M&A we would be
looking at," he said.
ING said it would pay shareholders an interim dividend of
EUR0.24 a share, in line with its target to pay at least 40% of
annual net profit. The bank hinted at the prospect of a higher
payout ratio for the full year, although this will depend on new
developments in banking regulations, it said.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
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