Dutch bank ING profits jump despite Greek debt costs
Dutch banker ING said Thursday its net profit jumped 24 percent profit in the second quarter, despite provisions of 310 million euros related to the Greek debt rescue package.
Net profit climbed to 1.51 billion euros ($2.15 billion, topping analysts forecasts compiled by Dow Jones Newswires for 1.44 billion euros. Most estimates however did not take July's Greek rescue package into account.
ING said that it set aside 187 million euros for its banking operations and 123 million euros at its insurance arm to cover losses -- put at 21 percent in the July accord -- on its holdings of Greek 10-year government bonds.
"Our exposure to Greek debt prior to these impairments was around 1.2 billion euros" to June 30, ING group spokesman Frans Middendorff said.
The new Greek rescue plan, unveiled at an emergency eurozone summit in Brussels on July 21, will see some 159 billion euros in contributions by the IMF, Europe and private lenders to Athens, such as banks, insurance companies and pension funds.
ING said its insurance arm improved particularly in the second quarter, with operating profit rising to 690 million euros from to 378 million euros in the three months to June 2010.
It said that despite paying three billion euros to the Dutch state in early May, following a loan during the 2008 global financial meltdown "it maintained strong capital buffers.
"ING reached important milestones in the second quarter as we work towards the separation of the group and the establishment of strong stand-alone banking and insurance companies," ING Group chief executive Jan Hommen said.
This included an agreement to sell US-based ING Direct to Capital One as part of requirements imposed by the European Commission in exchange for the government loan.
ING accepted a 10-billion-euro ($14.2 billion) cash injection from the Dutch government in October 2008 as financial markets reeled from the Lehman Brothers bankruptcy.
© 2011 AFP