October 31, 2019 / 7:08 AM / 17 days ago

ING posts lower third-quarter underlying pretax profit as costs rise

AMSTERDAM (Reuters) - ING Groep NV (INGA.AS) reported third-quarter underlying pretax profit of 1.91 billion euros ($2.13 billion), slightly above analyst expectations but less than a year ago, as regulatory costs rose and the bank’s loan book shrank by a billion euros.

The logo of ING bank is seen at the entrance of the group's office in Brussels, Belgium, October 3, 2016. REUTERS/Francois Lenoir/File Photo

Analysts polled by Refinitiv had expected the largest Dutch financial services firm to report an underlying pre-tax profit of 1.88 billion euros. In the three months through Sept. 30 a year ago, its underlying net profit was 2.12 billion euros.

“Even with the ongoing negative interest rate environment, our net interest income has remained resilient,” CEO Ralph Hamers said in a statement on Thursday. “Furthermore we saw an increase in fee income in the third quarter.”

Costs rose for ING as it hired employees to combat money laundering, with 500 new recruits in the past quarter, and now such employees account for 3,500 of its 53,500 employees.

At this time a year ago, ING was fined 775-million euro for failing to spot money laundering being carried out by its customers.

ING’s operating expenses rose to 2.44 billion euros in the quarter just ended, from 2.31 billion euros a year ago.

Interest margin rose to 1.54% from 1.52%.

ING noted that its lending to retail customers increased by 3 billion euros, but that was outweighed as loans to wholesale customers dropped by 4.6 billion euros.

Provisions for bad loans rose to 276 million euros in the third quarter, from 215 million euros a year ago.

($1 = 0.8958 euros)

Reporting by Toby Sterling; Editing by Himani Sarkar

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