ING ING Groep NV

By Maarten van Tartwijk 

Dutch bank ING Groep NV Thursday posted a higher-than-expected rise in fourth-quarter earnings, but hinted at a more cautious dividend policy in light of new capital requirements.

ING said underlying pretax profit, which excludes special items and divestments, was EUR1.2 billion ($1.3 billion) in the last three months of 2015, a 54% rise compared with the same period last year.

The bank said it would propose a final dividend of EUR0.41 a share.

Shares in ING jumped more than 6.5% in Amsterdam in early trading, even as the dividend came in slightly below expectations.

ING's dividend was in focus as it faces new capital requirements from the Dutch banking regulator. The Dutch central bank requires large lenders to build up a so-called systemic risk buffer in the coming years as a potential safeguard against future taxpayer bailouts. As a result, ING must have a common-equity Tier 1 ratio, a measure of core capital, of at least 12.5% by 2019.

Many analysts had already slashed their dividend forecasts in recent weeks on concerns that the new requirements would force ING to take a more prudent approach on payouts, despite its large pile of excess capital.

Chief Executive Ralph Hamers said ING seeks to have a capital position in excess of the requirements and that the bank aims to "pay a progressive dividend over time." The bank has previously promised a dividend ratio of at least 40% of net profit.

The results come as ING is in the final stages of divesting its insurance business, which is part of a wider strategic overhaul implemented after the bank received a government bailout during the financial crisis. Last year, ING sold its remaining shares in U.S. insurer Voya Financial Inc. and it still has stake of around 14% in Dutch insurer NN Group NV.

ING reported a net profit of EUR819 million, a 30% drop compared with last year when the results still included the income of its insurance businesses. The latest results benefited from a strong performance of ING's retail and wholesale divisions, which both reported a rise in income, while loan-loss provisions fell.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

(END) Dow Jones Newswires

February 04, 2016 04:14 ET (09:14 GMT)

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