Netherlands’ ING Groep Profit Up 30%

August 11, 2006

Amsterdam-based Financial services company ING Groep NV reported a 30 percent rise in its second quarter profit, with the bulk of the gain coming from its insurance division.

Net profit was 2.01 billion euros ($2.58 billion), up from 1.55 billion euros a year earlier.

However, earnings were essentially unchanged from the first quarter as a drop in banking profits offset a rise in insurance earnings. Insurance profits benefited from the company’s European operations, which reported lower underwriting expenses.

Also, ING announced the sale of a majority stake in Deutsche Hypothekenbank, a German mortgage bank, for an undisclosed sum to a group of investors including BHF-Bank AG and M.M. Warburg & Co.

ING said it would book an 80 million euro ($103 million) loss on the sale in the second half.

Shares fell 1.3 percent to 31.99 euros ($41.05) in early Amsterdam trading.

Operating profit from insurance rose to $1.69 billion in the April-June period on a 5.5 percent rise in premium income, mainly due to strength in the United States and South Korea. However, premium income fell 3.8 percent from the first quarter. ING did not say why.

In banking, operating profits rose to $1.75 billion. ING noted an important contributor was growth at its online retail banking unit, where profit was up 53 percent to $252 million.

Still, the second quarter operating profit was down 8 percent from the first quarter. This was “mainly due to the increase in risk costs as well as an increase in provisions for litigation,” ING said.

“Looking forward, interest margins are expected to remain under pressure at our banking operations in the second half of the year,” ING Chairman Michel Tilmant said in a statement. “Economic fundamentals remain sound and we see no sign of a deterioration in our credit portfolio.”

Was this article valuable?

Here are more articles you may enjoy.