ING Groep NV reported a 36% fall in first-quarter pretax earnings that beat forecasts as the Netherlands' largest bank booked higher loan loss provisions but retail operations held up well.
Earnings fell to 1.02 billion euros ($1.11 billion) from 1.58 billion but easily beat the 549 million forecast by analysts, Refinitiv Eikon data showed.
ING cautioned that the impact of the coronavirus pandemic escalated through March.
It took 661 million euros in loan loss provisions, up from 207 million a year earlier. They reflected a mix of existing and new problem loans for mid-sized and large customers, ING said.
Some 206 million euros in provisions stemmed from generally worsening economic conditions while 41 million euros in provisions on its U.S. loan book were linked to falling oil prices.
"The COVID-19 pandemic is profoundly affecting society and the economy throughout the world, and it will continue to do so for some time," CEO Ralph Hamers said.
ING shares were up 5.9% to 5.18 euros by 0725 GMT yet still down more than 50% year to date.
The bank said gross results improved at its large retail banking businesses in the Netherlands, Belgium and Germany, while its wholesale banking business saw a sharp decline due to the provisions.
Lending grew by 14.8 billion euros to 626 billion euros in the quarter, including 5.6 billion euros of loans generated under crisis programs underwritten in part by governments.
Hamers said that loan growth also reflected businesses drawing on credit facilities which were then deposited at ING. Customer deposits rose by 9.2 billion euros.
"Certainly part of the extra lending that we gave is on the back of the crisis and supporting our clients," he said.
The company's net interest margin, a measure of profitability, fell to 1.51% from 1.57% a quarter earlier.
Hamer said that was partly due to the bank's growing balance sheet, and partly due to extremely low interest rates, which make it harder to lend deposits profitably.