AMSTERDAM—Dutch bank ING Groep NV said Tuesday that its first-quarter net profit fell as a result of higher regulatory costs and lower income at its financial-markets division.

Amsterdam-based ING said net profit for the quarter to the end of March dropped 29% to €1.26 billion ($1.43 million), from €1.77 billion in the same period a year earlier.

Underlying pretax profit, the bank's preferred measure of its operating performance, fell to €1.19 billion from €1.66 billion last year.

The results came in slightly below analysts' expectations.

ING said the earnings drop was primarily driven by a sharp rise in costs to cover banking regulations in the Netherlands, Poland and Germany. Its financial-markets business suffered a drop in revenue due to market volatility in the first months of 2016.

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

(END) Dow Jones Newswires

May 10, 2016 03:35 ET (07:35 GMT)

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