Dutch bank ING posts steep plunge in Q1 2020 net profit

THE HAGUE, Netherlands – The Dutch banking giant ING on Friday, May 8, posted a 40% drop in 1st quarter net profit as a result of market volatility over the coronavirus pandemic.

Its results were nonetheless better than anticipated and chief executive Ralph Hamers emphasized that the bank had a strong foundation, though it would follow a European Central Bank recommendation to suspend dividend payments until at least October 1.

ING’s net profit fell by 40.1% in the first 3 months of the year to 670 million euros ($724 million), from 1.1 billion in the same period a year earlier, a statement said.

That was “a result of market volatility and the expected future economic impact of the COVID-19 pandemic,” it added, as it booked 661 million euros in provisions to cover potential loan defaults in the coming months.

Analysts had on average expected the net result to come in even lower, at around 411 million euros, according to Dutch media cited by the Bloomberg news agency.

“As a globally operating bank, ING is affected in a number of ways,” Hamers explained.

The bank “substantially increased loan loss provisioning, including provisioning for the impact of the deteriorating macroeconomic environment,” he said.

Total income slipped just 1.4% meanwhile to 4.5 billion euros, the statement added.

The overall result “was broadly in line with the year-earlier period, and we showed stable net interest income and strong improvement in fee income,” the CEO said. 

“Given the uncertainty in the current environment we will need to look closely at our cost base to ensure that our expenses optimally support our strategic priorities,” Hamers noted.

“At the same time, ING is well capitalized and has a very stable funding base,” he said.

ING has a staff of around 53,000 and is present in more than 40 countries. – Rappler.com