ING smashed expectations with its first-quarter profit that soared on the back of rising financial markets and falling bad debt.
The Dutch bank, led by chief executive Jan Hommen, said its exposure to Greece rose in the first quarter though its Portuguese portfolio fell, and it was comfortable with its position in sovereign debt. It climbed to a profit of €1.33bn (£1.13bn), beating analyst predictions of €964m. The results represent a dramatic turnaround from last year when the bank reported a first quarter loss of €793m.
The net profit was helped by a €403m gain from the sale of ING’s private banking businesses in Asia and Switzerland, part of a “back to basics” restructuring plan that will cumulatively see it shed €8bn in assets over the next few years.
ING turned an underlying pre-tax profit of €1.28bn, blowing past consensus estimates of €711m and a top forecast of €970m. Loan loss provisions fell to €497m from €689m in the last quarter. Its insurance business showed an underlying pre-tax profit of €269m, versus a forecast of €250m.
“We must remain vigilant as markets are still volatile, the economic recovery could prove fragile,” said Hommen.