ING Profit Lifted as Bad Loans Fall --Update
November 04 2015 - 9:39AM
Dow Jones News
By Maarten van Tartwijk
AMSTERDAM--Dutch lender ING Groep NV on Wednesday posted a
bigger than-expected rise in third-quarter net profit, as its
retail bank benefited from a drop in loan-loss provisions in the
Netherlands.
ING, the Netherlands' largest bank by assets, said net profit
rose 15% to EUR1.06 billion ($1.49 billion) in the period.
Underlying pretax profit, which strips out divestments and other
special items, rose 1% to EUR1.5 billion. The results beat
analysts' expectations and ING shares traded 4% higher at EUR13.67
in Amsterdam in early afternoon trade.
The results came as many large European banks are rethinking
their business strategy in response to stricter regulation and
declining profits. For ING, the need for a sweeping overhaul
appears less acute after it completed a restructuring triggered by
its government bailout during the financial crisis of 2008.
Chief Executive Ralph Hamers said ING is now one of the better
performing banks in Europe, and noted that "some colleagues" have
yet to start restructuring. "We are delivering a return-on-equity
that other banks are only talking about," he said. In recent years,
ING has shed dozens of assets and thousands of jobs and
repositioned itself as a European consumer and business lender that
seeks to grow through expanding its digital offerings.
ING said its third-quarter results were boosted by an improved
performance of its retail bank. The division, which now forms the
core of the company, reported an underlying pretax profit of EUR1.1
billion, a 10% rise compared with last year, driven by a drop in
loan-loss provisions in the Netherlands. It helped to offset a
weaker performance of the commercial bank, which saw profit fall by
23% to EUR527 million.
Mr. Hamers said the Dutch economy is getting back in shape
following a lengthy crisis in 2012 and 2013. "The outlook is pretty
strong, with the housing market up and disposable incomes rising.
It looks like we've turned the corner," he said.
Mr. Hamers, however, warned that banks are increasingly being
squeezed by stiffer regulatory requirements put forward by various
international bodies such as the European Central Bank and the
Basel Committee of Banking Supervision. "All these initiatives have
the right intention, but there is absolutely no coordination. This
could have a detrimental effect on the economic recovery."
Regulatory expenses are increasingly weighing on the bank's cost
base. ING said the expenses will amount to EUR650 million in 2015,
up from EUR408 million in 2014 and EUR374 million in 2013.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
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(END) Dow Jones Newswires
November 04, 2015 09:24 ET (14:24 GMT)
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