ING 3Q Net Profit Fell on Poland Mortgage Hit; Launches EUR1.5 Billion Buyback -- Update

By Ed Frankl

ING Groep NV said Thursday that its third-quarter net profit ticked down on year, hit by a mortgage holiday in Poland and losses on hedging, and said it is initiating a 1.5 billion euro ($1.47 billion) share-buyback program.

The Dutch lender posted a net profit of EUR979 million in the three months to the end of September, down from EUR1.37 billion in the same period a year earlier.

Total income, its top-line measure, fell 5% to EUR4.41 billion, ING said.

The figures came slightly below expectations of EUR1.08 billion for net profit and EUR4.43 billion for total income, according to analysts polled by FactSet.

The bank was hit by a hedge accounting impact of EUR288 million, though it said there will be a mirror positive impact in the coming years.

Net interest income at EUR3.33 billion was down 1.7% on year, owing to a EUR343 million impact of a mortgage moratorium put in place by the Polish government to shield consumers from rising interest rates.

The hit was itself partially offset by higher rates, as ING gained more from loans.

Fee income was stable on year, as higher daily banking fees were balanced by lower fees on investment products, as trading activity slumped amid a lower stock market.

ING's common equity tier 1 ratio, a measure of a bank's financial strength, was stable on quarter at 14.7%, but above its target of around 12.5%.

However, the company's return on equity, a gauge of shareholders' profitability, dipped 2 percentage points on year to 6.8%.

Chief Executive Steven van Rijswijk flagged a challenging economic and geopolitical environment in the quarter, with the bank's expenses hit by increasing inflationary pressure and adverse currency developments, though he said controllable expenses were kept in check.

The bank also said it would immediately launch a share-buyback program, to end by Dec. 30. Any remaining amount of the program after that date would be paid out in cash to shareholders, it added.

ING completed a EUR380 million buyback earlier in the year.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

November 03, 2022 03:27 ET (07:27 GMT)

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