AMSTERDAM-- ING Groep NV on Thursday recorded a sharp rise in
first-quarter earnings as the Dutch bank benefited from a pickup in
lending activity in Europe and lower provisions for bad loans.
Amsterdam-based ING reported an underlying pretax profit, a
measure of operating performance that strips out divestments and
other special items, of EUR1.66 billion, a rise of 41% on the
year.
Analysts polled by The Wall Street Journal predicted an
underlying profit of EUR1.45 billion.
"This strong performance was achieved despite the challenging
operating environment, characterized by unprecedented low interest
rates and the uneven economic recovery," Chief Executive Ralph
Hamers said.
ING, the Netherlands' largest bank by assets, attributed the
rise in profits to "robust growth" of its loan book. Its core
lending franchises grew by EUR6.9 billion in the quarter, an
annualized increase of 5.3%, driven by growth in the Netherlands
and Germany.
Mr. Hamers said lending is picking up "across the board" and
that businesses are becoming more willing to invest, although he
cautioned that the economic recovery in Europe is still in the
early stage. "Growth is there, but we are at the start of the
cycle," he said.
Provisions for bad loans were EUR432 million in the first
quarter, an 8% drop on the year but an 8% increase from the
previous quarter.
ING in November repaid the final chunk of state aid it received
during the financial crisis and has nearly completed the divestment
of its insurance business. The overhaul has transformed it into a
smaller Europe-focused bank that concentrates on gathering deposits
and lending to consumers and businesses.
ING recorded a first-quarter net profit of EUR1.77 billion,
compared with a net loss of EUR1.92 billion last year. Results were
boosted by a gain on the sale of ING's remaining stake in U.S.
insurer Voya Financial Inc. The bank also further reduced its stake
in Dutch insurer NN Group NV in the first quarter, causing a EUR1.8
billion book loss without affecting the bottom line.
ING was ordered by the European Union to sell its insurance arm
as a condition for getting approval for the government support.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
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