ING Posts 16% Gain in 1st Half Net on Strong Insurance Sales

August 24, 2001

Holland’s ING Group surprised analysts with 16 percent growth in operational net profit for the first six months of 2001 to €2.403 billion ($2.198 billion) on a strong performance by its insurance units, which posted a 28.4 percent rise in net profit to €1.463 billion ($1.339 billion).

Given the weakness in the banking sector, and the general decline in equity markets around the world, ING’s performance is all the more remarkable. CEO Ewald Kist cited the company’s diversification in terms of geography, products and distribution channels as the basis for its results, calling it a “good business mix.”

The figures were helped by ING’s integration of ReliaStar Financial and Aetna Financial and International, two major U.S. acquisitions it made last year. They added over $120 million in net profits. It expects further gains in both the North and South American markets.

ING’s operational net return on equity grew from 12.2 percent for the year 2000 to 19.4 percent for the first six months of 2001, well in excess of its 18 percent target figure.

Even ING’s banking activities, which posted a small rise, surprised analysts, who had for the most part forecast a decline. In particular ING Direct, the Group’s on-line banking subsidiary, grew spectacularly, doubling the amount of deposits to $12.8 billion, and increasing the number of customers by 80 percent to 1.4 million.

The company expects to remain on target to increase operational net profit per share (including ReliaStar, Aetna Financial Services and Aetna International) by at least 17 percent for the full year, provided there’s no further deterioration in global economic and financial conditions.

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