--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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