Dutch bank ING posts profit dip and misses expectations

Michel Porro | Getty Images News | Getty Images

ING, the largest Dutch financial group, reported a slight drop in first-quarter underlying net profit of 1.12 billion euros ($1.26 billion), narrowly missing analyst expectations of 1.15 billion euros in a Reuters poll.

The bank reported 1.19 billion euros of net profit in the first quarter of 2018. Pre-tax profits of 1.58 billion euros ($1.77 billion) were down 6.2% from the first quarter of last year. Quarter-on-quarter, the underlying result before tax fell 6.5%, which the bank said was caused entirely by the “seasonally higher regulatory costs in the first quarter.”

The group reported an increase in net core lending of 8.7 billion euros in the first quarter, with net customer deposit inflows amounting to 4.8 billion euros.

Its retail primary customer base grew by 150,000 to 12.6 million. In a statement, CEO Ralph Hamers said the results showed “good commercial momentum.”

“Income grew both year on year and sequentially and we see the positive results of our transformation program coming through, especially in the Netherlands and Belgium,” said Hamers.

“However, this was offset by higher but still relatively low risk costs, and pressure from low interest rates in our main euro zone markets.”

Shares fell 1.5% during early morning trading Thursday.

Hamers also stressed that the bank understands “how vital it is to master the management of nonfinancial risks” and is committed to doing so.

Provisions for bad loans reduced from 242 million euros in the fourth quarter of 2018 to 207 million euros.

The bank incurred a fine of 775 million euros in the third quarter of 2018 for poor monitoring of money laundering by clients, and is continuing a know your customer (KYC) enhancement program.

In its earnings report, ING said it was in regular contact with regulators about this program. The bank also revealed that it was informed in March of a report by the Italian central bank into shortcomings in anti-money laundering processes at ING Italy.

“We’re analyzing these findings and taking the necessary steps to improve processes and the management of compliance risks in Italy, in line with our global enhancement program,” the bank said.

In the meantime, ING Italy will refrain from taking on new clients.

Be the first to comment

Leave a Reply

Your email address will not be published.


*