ING back to profit but banking suffers

DUTCH banking group ING returned to the black yesterday, posting second-quarter pre-tax profit of &euro;74m (&pound;63.5m), but saw its banking operations fall to a surprise loss.<br /><br />The financial services group turned around its dismal performance during the credit crunch, which saw it post a &euro;4.3bn loss in the final quarter of 2008, followed by a &euro;281m loss in the first quarter of this year.<br /><br />But the group&rsquo;s current performance came in well below an analysts&rsquo; consensus forecast of &euro;275m, as property writedowns made a dent in ING&rsquo;s banking operations.<br /><br />The group&rsquo;s banking business slumped to a pre-tax loss of &euro;204m, as negative revaluations of &euro;584m and impairments of &euro;110m hit its real estate investments.<br /><br />Difficulties in real estate cast fresh doubt on the group&rsquo;s ability to pay back the &euro;10bn in state bailout money the group took from the Dutch state at the height of the banking crisis last year.<br /><br />ING said it was looking at &ldquo;strategic options&rdquo; to allow it to pay back the government aid, heightening speculation that the bank will increase the &euro;8bn in asset disposals announced by chief executive Jan Hommen earlier this year.<br /><br />The company said it had already identified assets for disposal, with its Swiss and Asian private banking units expected to be first to go in September.<br /><br />Hommen said that it was too early to say whether it would resume dividend payments at the end of the year, having suspended them since last year&rsquo;s interim results.