ING’s First-Quarter Net Profit Rises 43% to $1.4 Billion

By | May 7, 2015

ING Groep NV, the biggest Dutch financial-services company, said first-quarter profit rose 43 percent amid a boost from lending and commissions.

Underlying net profit rose to 1.19 billion euros ($1.4 billion) from 830 million euros a year earlier, Amsterdam-based ING said in a statement Thursday.

The company sold out of its U.S. insurance unit in March and cut its stake in NN Group NV to about 55 percent in February as part of its restructuring plan in return for a government bailout. ING is resuming dividends this year for the first time since 2008 after repaying the state rescue.

The “strong performance was achieved despite the challenging operating environment, characterized by unprecedented low interest rates and the uneven economic recovery,” ING Chief Executive Officer Ralph Hamers said in the statement.

ING fell 2.2 percent to 13.43 euros at 9:08 a.m. in Amsterdam, paring the year’s gain to 24 percent this year, compared with an 11 percent gain in the STOXX Europe 600 Banks Price.

Lending Growth

ING reported net income of 1.8 billion euros in the first quarter, up from a loss of 1.92 billion euros a year earlier, when it booked losses on asset sales.

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 3 billion euros a year earlier.

“ING’s strong lending growth was most positive,” said Cor Kluis, an analyst at Rabobank, who has a buy recommendation on the stock. “Net interest income is expected to rise further next quarter as it cuts rates on the savings yields.”

The company’s core capital ratio under the full application of the strictest Basel guidelines rose to 11.6 percent from 11.4 percent at the end of the year.

In Russia, where U.S. and European sanctions over the Ukraine conflict are weighing on the economy, ING trimmed lending outstanding to 6.9 billion euros from 7 billion euros at the end of the year.

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