© Reuters. The logo of ING Bank was photographed at the entrance of the group headquarters in Brussels, Belgium on September 5, 2017. REUTERS/Francois Lenoir
AMSTERDAM (Reuters)-ING Groep NV announced a better-than-expected quarterly pre-tax profit of 2.07 billion euros ($2.45 billion) on Friday, and said it plans to resume dividend payments because it withdrew the payment during the coronavirus pandemic. Part of the reserve for bad debts.
According to data from Refinitiv, analysts had previously expected the largest bank in the Netherlands to have a pre-tax profit of 1.62 billion euros. In contrast, in the second quarter of 2020, at the height of the pandemic blockade, pre-tax profit was 532 million euros.
Provision was negative 91 million euros, compared with 1.37 billion euros in the same period last year.
“From the perspective of risk cost, these are actually negative for this quarter, but we must be cautious. There are still many risks in the economy,” said CEO Steven van Rijswijk, who pointed out the uncertainty of the COVID-19 variant. .
The Netherlands and Germany, ING’s largest markets, are expected to grow by more than 3% this year, and the bank said the economic recovery-uneven but faster than expected a year ago-is the main reason.
Fee income increased by 18% to 855 million euros, mainly due to daily banking and investment products for retail customers.
Due to continued low interest rates, net interest income fell by 2.6% to 3.34 billion euros. ING stated that net interest income benefited 83 million euros from its participation in the European Central Bank’s loan program, in which banks borrow money from the central bank as payment, not fees, on the condition that they lend the money to customers.
Nonetheless, ING’s net interest margin is a key indicator of loan profitability, dropping from 1.44% a year ago to 1.36%.
The European Central Bank restricted banks from paying dividends at the beginning of the pandemic. ING said on Friday that it intends to distribute a dividend of 3.62 billion euros, or 0.48 cents per share, in October, covering interim dividends for 2020 and 2021.
In addition, it will distribute the 1.74 billion euros it has held since 2019 through dividends or share repurchases.
These allocated funds are not included in the bank’s Tier 1 capital buffer, which was 15.7% at the end of the quarter.
ING shares closed at 11.17 euros on Thursday, up 46% year-to-date.
(1 USD = 0.8457 Euro)
Converged Media Fusion Media or anyone related to Fusion Media will not be liable for any loss or damage caused by relying on the data, quotations, charts, and buy/sell signals contained in this website. Please fully understand the risks and costs associated with financial market transactions. This is one of the most risky forms of investment.