ING posts 2Q underlying net profit of EUR 229 million
(Thomson Reuters ONE) - * 2Q09 underlying net profi t of EUR 229 million shows improvement from underlying net loss of EUR -305 million in 1Q09 - Bank interest result up 19.4% versus 2Q08 and 4.7% versus 1Q09 on improvements in savings and lending margins - Group operating expenses down 5.5% from the second quarter of 2008 and 2.4% from the fi rst quarter of 2009 - Results dampened by market impacts including EUR -584 million of real estate revaluations - EUR -763 million of pre-tax hedge results offset by positive equity-related DAC unlocking and unrealised gains through equity - Net addition to loan loss provisions of EUR 852 million at ING Bank, equivalent to 118 bps of average credit-risk weighted assets - Divestments and special items totalled EUR -159 million, bringing the quarterly net result to EUR 71 million or EUR 0.03 EPS* De-leveraging, de-risking and cost-containment measures progressing on track or ahead of targets - Cumulative reduction in Bank balance sheet of EUR 164 billion, or 15%, since 3Q08 exceeds target for 10% reduction - 53% of targeted EUR 1 billion cost savings achieved in fi rst half of 2009; cost savings expected to reach EUR 1.3 billion for full year - Total FTE reduction of 8,219 realised by end of 2Q09, ahead of 7,000 planned reductions for full-year 2009 - Risk-reduction efforts help offset credit rating migration, limiting the increase in risk-weighted assets to 1.7%* All key capital and leverage ratios robust during the quarter; shareholders' equity increases by EUR 2.9 billion - All key capital and leverage ratios remained strong during the quarter; Bank Tier 1 ratio of 9.4% and core Tier 1 ratio of 7.3% - Shareholders' equity increased by EUR 2.9 billion driven by tightening credit spreads and the uptick in equity markets - Bank asset leverage ratio of 28.9x at the end of 2Q09, down from 30.1x at the end of 1Q09 - ING has decided not to pay an interim dividend on common shares over 2009Chairman's Statement"ING posted solid commercial performance in the quarter, as a morefavourable interest rate environment and improved margins on savingsand lending led to a 19.4% increase in interest income at the bankingoperations. In Insurance, the recovery of equity markets in thesecond quarter helped boost fees on assets under management. However,sales of investment-linked products remained subdued as customersawaited a sustained market rally or opted for traditional lifeproducts," said Jan Hommen, CEO of ING."Benefi ts of Back to Basics and improvements in equity and creditmarkets helped the Group return to profi t with an underlying netresult of EUR 229 million. However, market impacts and the weakereconomic environment continue to strain ING's results. The uptick inequity markets led to a reversal of some of the DAC unlocking seen inthe fi rst quarter, but was more than offset by negative results onhedges to preserve regulatory capital. As the real economy wasimpacted, credit quality worsened, leading to a rise in risk costs,while lower property prices in many markets triggered negativerevaluations on real estate, which are immediately refl ected in theP&L.""While we begin to see signs of recovery in fi nancial markets,economic conditions are expected to remain challenging for some time.Against this backdrop our Back to Basics programme is our toppriority and progress is ahead of plans. Our employees have managedthese aggressive cost cuts with professionalism and a continuedcommitment to our customers. Of our target to reduce operatingexpenses by EUR 1 billion this year, EUR 525 million was alreadyachieved in the fi rst half and we now expect cost savings to reachEUR 1.3 billion driven by further reductions in infrastructure costs.Headcount has been reduced by 8,219 FTEs year-to-date, well ahead ofthe original plan to reduce 7,000 FTEs this year. Deleveraging of thebalance sheet is also ahead of plan: the bank has achieved a totalbalance sheet reduction of EUR 164 billion, exceeding the EUR 110billion target.""We have made strides to reduce risk, stabilise the capital base andsimplify our organisation in the fi rst half. The merger of ING'sDutch retail banking operations is well on track and a programme tointegrate ING's Dutch insurance operations has been announced withpositive earnings contribution in 2010. In line with our Back toBasics strategy, we have also agreed to sell several non-core orsubscale businesses in our efforts to streamline the Group andsharpen our strategic focus. We are currently reviewing additionalstrategic options to facilitate our continued transformation andrealise our ambition to repay the Dutch State. The process will alsosupport ING's efforts to meet the restructuring requirements set outby the European Commission for fi nancial institutions that receivedstate aid in the context of the fi nancial crisis. In the meantime,we continue to focus on providing fi rst-rate service to ourcustomers and providing them with simpler and more transparentproducts."The full report including tables can be downloaded from the followinglink:2009 Second Quarter Results ING GroupThe following documents can be downloaded from around 07.30 am CETfrom the following links:Quarterly ReportAnalyst PresentationPress PresentationGroup Statistical SupplementUS Statistical SupplementInvestor RelationsT: +31 20 541 5460Analyst Conference Call09:00 CETNL: +31 45 631 6900UK: +44 207 154 2666US: +1 480 248 5085Media RelationsT: +31 20 541 5433Press Conference11:30 CET, ING House,AmsterdamWebcastAvailable at www.ing.comhttp://hugin.info/130668/R/1334075/316523.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 12.08.2009 - 07:08 Uhr
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