ING Warns on Lasting Coronavirus Impact as Provisions Hit Profits -- Update
May 08 2020 - 2:33AM
Dow Jones News
--ING's first-quarter net profit fell 40% to EUR670 million
--Provisions to cover potential soured loans more-than tripled
to EUR661 million
By Pietro Lombardi
ING Groep NV reported a sharp fall in first-quarter net profit
after its provisions to cover potential soured loans more-than
tripled, and warned that the coronavirus pandemic will continue to
hit the economy.
The Dutch bank, like many peers in Europe and the U.S., set
aside more money to prepare for an increase in customers defaulting
on their loans as the coronavirus pandemic hammers economies around
the world.
"The Covid-19 pandemic is profoundly affecting society and the
economy throughout the world, and it will continue to do so for
some time," Chief Executive Ralph Hamers said.
The lender added 661 million euros ($714.2 million) to its
provisions for bad loans. For the same period last year, the figure
was EUR207 million.
The higher provisions were compounded by lower revenue, which
led to a 40% decline in quarterly net profit to EUR670 million.
Pretax profit dropped almost 36% to EUR1.02 billion.
Revenue fell 1.4% to EUR4.51 billion. Net interest income edged
up 0.5%, while fees and commissions grew 16%. However, investment
income collapsed, falling 86%.
ING's common equity Tier 1 ratio--a key measure of balance sheet
strength--was 14.0% at the end of the quarter compared with 14.6%
in December.
"Given the uncertainty in the current environment we will need
to look closely at our cost base to ensure that our expenses
optimally support our strategic priorities and other areas of high
importance," the CEO said.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
May 08, 2020 02:18 ET (06:18 GMT)
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