ING bank posts big quarterly profit rise
By Toby Sterling |
August 12, 2010, Thursday
|
Print Edition
Print Edition
ING Groep NV, the Dutch bank and insurance company, yesterday reported a sharp rise in second-quarter earnings, mostly because it avoided some of the losses it made a year ago on stocks, bonds, and real estate-related investments.
Net profit was 1.09 billion euros (US$1.44 billion), up from 79 million euros in the same period a year ago, as a strong performance by its banking arm outweighed a loss at insurance. Total income rose 52 percent to 15.3 billion euros.
"The sharp decline in equity markets in the quarter severely impacted the results of our US insurance operations," said Chief Executive Jan Hommen in a statement.
"However, the bank continued to benefit from its strong liquidity and funding profile, with lending growth funded entirely by customer deposits."
The earnings "exceeded our and consensus' estimates and was driven by strong bank developments, as insurance somewhat disappointed," analyst Maarten Altena of SNS Securities said in a note on the earnings.
ING plans to hive off its insurance arm as part of a deal with European regulators after having received state aid during the 2008 financial crisis.
Altena said the volatile earnings at the division could hurt its potential sale price. Hommen said he expected the two units' operations would be completely separate by the end of the year. It is to be sold by 2013 at the latest.
At its banking arm, ING reported an underlying pretax profit of 1.61 billion euros, from a loss of 186 million euros.
In 2009, ING posted big losses on real estate and mortgage derivatives.
Net profit was 1.09 billion euros (US$1.44 billion), up from 79 million euros in the same period a year ago, as a strong performance by its banking arm outweighed a loss at insurance. Total income rose 52 percent to 15.3 billion euros.
"The sharp decline in equity markets in the quarter severely impacted the results of our US insurance operations," said Chief Executive Jan Hommen in a statement.
"However, the bank continued to benefit from its strong liquidity and funding profile, with lending growth funded entirely by customer deposits."
The earnings "exceeded our and consensus' estimates and was driven by strong bank developments, as insurance somewhat disappointed," analyst Maarten Altena of SNS Securities said in a note on the earnings.
ING plans to hive off its insurance arm as part of a deal with European regulators after having received state aid during the 2008 financial crisis.
Altena said the volatile earnings at the division could hurt its potential sale price. Hommen said he expected the two units' operations would be completely separate by the end of the year. It is to be sold by 2013 at the latest.
At its banking arm, ING reported an underlying pretax profit of 1.61 billion euros, from a loss of 186 million euros.
In 2009, ING posted big losses on real estate and mortgage derivatives.
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