ING Profit Jumps as Lending Grows -- Update
03 August 2016 - 5:39PM
Dow Jones News
By Maarten van Tartwijk
AMSTERDAM-- ING Groep NV said Wednesday that its second-quarter
net profit soared as the Dutch bank expanded its loan book and kept
margins stable despite pressure from record low interest rates.
The Amsterdam-based bank, the Netherlands' largest lender by
assets, said net profit was EUR1.3 billion ($1.46 billion) in the
three months to the end of June, up from EUR358 million in the same
period a year earlier. Underlying net profit, which excludes asset
disposals, rose 27% to EUR1.4 billion, beating market
expectations.
The bank's shares opened 4% higher following the results.
ING said its latest results were lifted by the strong growth of
its loan book, which expanded by EUR14.8 billion in the quarter, as
well as an improved performance at its financial-markets division
and a drop in loan-loss provisions.
The bank' underlying interest margin, the difference between the
rate at which it borrows and lends, remained relatively stable
despite ultralow interest rates. It was 1.50% compared with 1.43%
last year and 1.51% in the previous quarter.
European bank shares have been hit hard in recent months in part
because of concerns that historically low interest rates and more
stringent regulations will eat into their profitability. ING's
shares have fallen more than 20% since the start of 2016 and by
around 40% in the past year.
ING, one of Europe's largest savings banks with EUR452 billion
in retail client deposits, has been able to protect profitability
by slashing rates on savings accounts. The bank said it reduced
rates in a host of countries, including the Netherlands, Italy and
Germany, although savings margins fell.
Overall, net interest income was EUR3.3 billion, representing a
5.3% increase from last year and a 0.6% rise from the previous
quarter.
ING's results were further boosted by a EUR200 million gain on
the sale of its stake in Visa Europe, offsetting a EUR137 million
provision linked to an interest-rate derivatives miss-selling
scandal in the Netherlands.
The bank said it would declare an interim dividend of EUR0.24 a
share, unchanged from the previous year.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
(END) Dow Jones Newswires
August 03, 2016 03:24 ET (07:24 GMT)
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