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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ING Groep NV | NYSE:ING | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.11 | 0.64% | 17.29 | 17.36 | 17.24 | 17.28 | 1,730,808 | 20:43:03 |
By Maarten van Tartwijk
AMSTERDAM--ING Groep NV said Tuesday its first-quarter net profit fell because of higher regulatory costs and lower income at its financial-markets division.
Net profit for the three months to the end of March dropped 29% to EUR1.26 billion ($1.43 billion), from EUR1.77 billion in the same period a year earlier. Underlying pretax profit, the bank's preferred measure of its operating performance, fell 29% to EUR1.19 billion.
The latest results were dented by EUR496 million in costs to cover new and stricter regulatory requirements as well as lower revenue at ING's financial-markets division because of market volatility in the first months of this year.
Analysts said the regulatory costs overshadowed an otherwise solid operating performance, which benefited from robust interest income, lending growth and a drop in loan impairments. Shares in ING rose more than 4% in Amsterdam in early trading.
The results came as many European banks are grappling with ultralow interest rates, tougher regulations and a still fragile economy. Several big lenders have reported disappointing first-quarter results in recent weeks.
ING, one of Europe's biggest deposit gathers, said the low interest rate environment represents a challenge but that it managed to protect margins by lowering rates on savings accounts in the Netherlands, Belgium, Spain, France and Austria.
The bank struck a gloomy tone on the impact of new rules imposed by national and international regulators, saying regulatory costs will rise to EUR960 million for the whole year, higher than previously thought. Last year, regulatory expenses amounted to EUR620 million.
The expected increase is primarily driven by higher contributions to deposit-guarantee schemes in the Netherlands and Germany and a recently introduced bank tax in Poland.
Chief Executive Ralph Hamer said the regulatory burdens are increasingly weighing on ING's cost-income ratio--a measure of efficiency--and that he will "look for ways to offset these higher costs."
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
(END) Dow Jones Newswires
May 10, 2016 07:13 ET (11:13 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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