ING first quarter underlying pretax profit up 39%, beats expectations

ING CFO: Rates below zero a problem for future

ING Groep, the largest Dutch financial services company, reported on Wednesday a better than expected first-quarter underlying pretax profit of 1.65 billion euros, up 39 percent from a year ago.

Analysts polled for Reuters had seen underlying pretax profit figure at 1.45 billion euros, up from 1.19 billion in the same period of 2016.

The company cited growth of 5.7 billion euros in core lending and 6.7 billion euros in new customer deposits, even as bad loans fell.

ING has been winning customers, notably in Germany, on the strength of its mobile telephone banking software, and limiting its costs by building few branch offices in the countries where it is expanding.

The results reflect "continued loan growth, good cost control and relatively low-risk costs," CEO Ralph Hamers said in a statement. "Wholesale Banking's contribution was particularly strong, led by higher income from Financial Markets and commissions."

ING CFO: We are fully cooperating with authorities

Net interest margin inched higher to 1.52 percent from 1.51 percent, while income from commissions at its wholesale banking division grew 12 percent to 682 million euros.

The group's common Tier 1 equity, a common measure of solvency at banks, improved to 14.5 percent from 14.2 percent at year-end.

The company added 133 million euros to bad loan provisions in the quarter, down from 265 million euros in the same quarter of 2016.

Net profit of 1.14 billion euros ($1.24 billion) was down from 1.257 billion euros in the same period a year ago. The 2016 figures were helped by a one-time profit of 506 million euros from the sale of shares in former subsidiary NN Group.