ING Posts Third-Quarter Profit, Still Earnings Fall
ING Groep NV, the Netherlands' largest financial-services firm, posted a third-quarter profit gain of 47 percent, plumped by one-time gains from a divestment and the sale of ABN Amro Holding NV shares.
Net income increased to 2.31 billion euros ($3.38 billion), or 1.08 euros a share, from 1.57 billion euros, or 73 cents, a year earlier, said the Amsterdam-based insurer.
However, excluding a 455 million-euro gain from selling ABN Amro shares, earnings fell as ING revalued real estate and private equity stakes and so-called "market turmoil” hurt the wholesale bank. To reduce costs, ING CEO Michel Tilmant says he intends to cut a combined 1,150 jobs at that unit and the retail bank over the next five years.
According to analyst Ton Gietman of Amsterdam-based Petercam, ``Most of the reasons that have put pressure on earnings in the third quarter are there to stay.'' Gietman added,``We had expected momentum to disappear, but we had not expected that profits would fall so much.'' He says he may halt his “add”' recommendation on ING shares as a result.
ING said it incurred no "material'' impairments or revaluations on subprime mortgage-backed securities, in which it had 3.1 billion euros invested at the end of September. Still, Tilmant said “The third quarter was marked by turmoil in financial markets as concerns about U.S. subprime lending triggered a liquidity crisis and a re-pricing of risks.'' Risk management, he said, “protected us against the direct impact of this turmoil.''
Published on November 7, 2007
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