ING Rises on Plan to Resume Dividend as Profit Misses Q4 Estimates

By | February 11, 2015

ING Groep NV rose in Amsterdam trading after the lender said it will pay a dividend for the first time in almost seven years even as profit from its banking activities fell missing fourth-quarter estimates.

ING rose as much as 3.6 percent and was 2.3 percent higher as of 9:53 a.m. Underlying banking profit, which excludes results from the company’s insurance holdings and one-time effects, dropped to 548 million euros ($620 million) from 686 million euros a year earlier, ING said. That missed the average estimate of 570.8 million euros in a Bloomberg News survey of six analysts.

ING plans a dividend of 12 cents, the first payout since the government came to the bank’s rescue during the 2008 financial crisis, 10 billion-euro bailout ING repaid in November. Chief Executive Officer Ralph Hamers has repositioned ING, once a global financial firm, as a lender focused on Europe. He is cutting jobs in its home market, while seeking to boost lending in countries including Germany, Turkey and Spain by relying on online and mobile banking.

Results “are marginally better than expected mostly driven by the dividend,” said Cor Kluis, an analyst at Rabobank who has a buy recommendation on the stock. “Operational earnings corrected for one off and volatile items was in line with expectations.”

Redundancy Charge

ING took a 375 million-euro charge to cut jobs and boost technology spending. In November, the Amsterdam-based company said it will reduce its staff of about 53,000 by 1,700.

“ING Bank posted a strong set of full-year 2014 results, despite some headwinds in the fourth quarter,” Hamers said in the statement. “Our fourth-quarter result was dampened by redundancy provisions.

Net interest income, the revenue generated from the difference between what banks charge for loans and pay for funding, rose to 3.2 billion euros from 2.9 billion euros a year earlier. A Bloomberg News survey of four analysts predicted net interest income at 3.12 billion euros.

Net income for the full group in the fourth quarter increased to 1.2 billion euros from 626 million euros a year earlier. The company’s core capital ratio under the full application of Basel III guidelines rose to 11.4 percent, up from 11.1 at the end of the third quarter.

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