Dutch lender ING Q2 net profit up 83%, helped by higher interest rates

ING, the largest Dutch bank, reported a forecast-beating 83 per cent jump in second-quarter net profit on Thursday (Aug 3), as higher interest rates helped income from lending and fees grow, and thanks to low loan provisions.

The group, which serves around 37 million customers in more than 40 countries, said its net profit increased to 2.16 billion euros (S$3.16 billion) between April and June, beating the 1.64 billion euros expected by analysts.

“The current interest rate environment drove income growth in both retail and wholesale banking, with continued deposit inflows across our retail markets,” chief executive Steven van Rijswijk said in a statement.

The bank added 98 million euros to its loan loss provisions in the quarter, down from 202 million last year, bringing the cost of risk on average customer loans to 6 basis points, down from 13 basis points a year ago.

Net interest income (NII), a key measure of earnings on loans minus deposit costs, reached 4.06 billion euros in the quarter, up 19.8 per cent.

The company’s CET1 ratio, a measure of capital strength for European banks, rose 0.1 percentage points to 14.9 per cent, against a consensus of 14.6 per cent, the group said.

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ING’s shares gained as much as 1.5 per cent, while the Dutch blue-chip-index was down 1.2 per cent.

“Incredibly strong quarter,” said KBC in a note to clients, adding that the result “opens the door for increased shareholder distribution.”

Fee income in its retail banking fell in the quarter, the group said, impacted by lower fees from mortgage brokerage in Germany, higher commissions paid to agents in Belgium, and ING’s exit from the French retail market in 2022. REUTERS