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August 13, 2009

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ING reports second-quarter profit of US$100m

ING Groep NV, the Dutch bank and insurer, reported a net profit of 71 million euros (US$100 million) for the second quarter yesterday - a 96 percent drop on the year - due to a mix of bad loans amid the recession, weak real estate investments and poorly timed hedges.

Net profit was 1.92 billion euros in the same period last year, before the financial crisis struck. But ING lost more than 5 billion euros in the following three quarters. The second-quarter results represent a return to profitability.

"ING posted solid commercial performance in the quarter, as a more favorable interest rate environment and improved margins on savings and lending led to a 19.4 percent increase in interest income at the banking operations," said Chief Executive Jan Hommen in a statement. "In insurance, the recovery of equity markets in the second quarter helped boost fees on assets under management."

However, ING increased its provision against bad loans by 852 million euros and suffered for being wrong in its positioning during the sharp rebound of recent months.

"All in all, we are somewhat disappointed with the numbers and the uncertainty regarding potential further negative impacts in terms of loan losses and real estate impairments," SNS Securities analyst Maarten Altena wrote in a note.


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