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ING to cut 1,000 jobs as costs miss estimates in Q3
[AMSTERDAM] ING Groep NV will cut 1,000 jobs and close offices in South America and some in Asia as it looks to cut costs and boost its digital transformation.
The Dutch lender said it would streamline its wholesale offering to focus on key clients and markets, according to its third quarter statement Thursday. Profit was 788 million euros (S$1.26 billion) in the third quarter, lower than the 844 million euro profit estimated by analysts. Costs came in at 2.6 billion euros, higher than a year before and missing a 2.35 billion euro estimate.
"In wholesale banking, we will concentrate even more on core clients and simplify our geographical footprint, which will require fewer staff," said chief executive officer (CEO) Steven van Rijswijk.
"This includes closing our offices in South America and some in Asia, while continuing to serve the international needs of clients from our regional hubs."
ING set aside lower loan loss provisions in the quarter, after taking heavy provisions in the early stages of the Covid-19 pandemic. The bank took a 469 million euro charge, about half as much as expected.
The bank also adopted a new dividend policy comprising a 50 per cent pay-out ratio of resilient net profit that will taken effect once restrictions on shareholder distributions are lifted. The widely-watched capital ratio known as Common Equity Tier 1 rose to 15.3 per cent from 15 per cent three months earlier.
In recent years, ING was one of the fastest growing banks in Europe as it added millions of customers through online services under the previous CEO Ralph Hamers, who is now leading UBS Group AG.
Even after adding millions of customers in recent years, ING has struggled to be more profitable after low interest rates and increased compliance costs weighed on profit margins.