The Netherlands ING Group, one of the world’s largest integrated financial services companies, reported operating net profit of U.S. $2,362 million/EUR 2,068 million for the first six months of 2003, a 6.4 percent increase over the same period in 2002. Total net profit dropped by 28.4 percent to U.S. $2,319 million/EUR 2,030 million compared to last year, mainly due to writedowns of equity holdings.
The figures were released in dollars, as given, with the approximate equivalent value in euros at 1.421 to the dollar, slightly higher than the current exchange rate. The company said its operating net profit from its banking operations “improved strongly by 14.6 percent to U.S. $917 million/ EUR 803 million, continuing the upward trend from the first quarter.” It noted that “Insurance operating net profit was up slightly, 1.8 percent to U.S. $1,445 million/ EUR 1,265 million, supported by the worldwide stock market recovery and considerably improved performance in U.S. life insurance operations in the second quarter. Assets under management grew 0.8 percent to U.S. $516.7 billion/EUR 452.4 billion.”
“Overall, I am pleased with ING’s performance in the first half of 2003,” stated Ewald Kist, chairman of the Executive Board. “Although low interest rates and the strong euro remain an ongoing challenge, I am confident that ING is well-positioned for long-term profit growth.” The good results, which exceeded most analysts’ expectations, sent ING shares up over two percent in morning trading.
The company shied away from making full year earnings predictions, however. It said that although “the results for the second quarter confirm the Executive Board’s optimism about the further development of ING’s result in 2003…given the high level of uncertainty with respect to interest rates and stock markets, the Executive Board will not yet make a forecast for ING’s 2003 full-year profit.”
The bulletin also noted the following “strategic developments during the quarter:
— The capital base of ING Insurance stood at EUR 15.0 billion [$17 billion] on June 30, 171 percent of the legally required level (year-end 2002 :169 percent).
— The tier-1 ratio of ING Bank was 7.47 percent on June 30 (year-end 2002: 7.31 percent).
— ING Direct continues to exceed expectations, with 6.6 million clients as of June 30 and funds entrusted up 43.5 percent to U.S. $90.5 billion/EUR 79.2 billion in the first six months of 2003.
— ING now owns 100 percent of German direct banks DiBa and Entrium, with a joint customer base of more than 3.5 million clients and approximately U.S. $45 billion/EUR 40 billion funds entrusted.
— ING continued cost control measures. Along with integration and restructuring of the U.S. insurance business and wholesale banking, this led to considerable cost savings. Total expenses decreased 8 percent.