ING back to profit but banking suffers
DUTCH banking group ING returned to the black yesterday, posting second-quarter pre-tax profit of €74m (£63.5m), but saw its banking operations fall to a surprise loss.
The financial services group turned around its dismal performance during the credit crunch, which saw it post a €4.3bn loss in the final quarter of 2008, followed by a €281m loss in the first quarter of this year.
But the group’s current performance came in well below an analysts’ consensus forecast of €275m, as property writedowns made a dent in ING’s banking operations.
The group’s banking business slumped to a pre-tax loss of €204m, as negative revaluations of €584m and impairments of €110m hit its real estate investments.
Difficulties in real estate cast fresh doubt on the group’s ability to pay back the €10bn in state bailout money the group took from the Dutch state at the height of the banking crisis last year.
ING said it was looking at “strategic options” to allow it to pay back the government aid, heightening speculation that the bank will increase the €8bn in asset disposals announced by chief executive Jan Hommen earlier this year.
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.
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’s interim results.