ING bank reports earnings jump, but job cuts loom
Dutch bank ING said on Thursday its net profit increased sevenfold in the third quarter for the equivalent figure last year, but added it was cutting 2,000 jobs in the Netherlands to cut costs.
Net profit stood at 1.69 billion euros ($2.3 billion), better than analysts' surveyed by Dow Jones Newswires, who predicted 1.55 billion euros.
It notably included a gain of 516 million euros through the sale of subsidiaries such as its vehicle leasing arm to German car-maker BMW. The deal was announced in July.
But its chief executive Jan Hommen said the third quarter "saw a marked deterioration on debt and equity markets amid a slowdown and the deepening of the sovereign debt crisis in Europe."
ING announced it would cut 2,000 out of 19,000 internal jobs from its Dutch banking business next year and in 2013 as part of a cost-cutting programme that would enable ING to save 300 billion euros a year from 2014.
"As income is coming under pressure, we must renew efforts to reduce expenses across the group to adapt to the leaner environment and maintain our competitive position," Hommen said in a statement, issued in Amsterdam.
In addition, about 700 "external" jobs are also to be slashed, he added.
ING's results have been weighed down by write-offs before tax amounting to 467 million euros, locked in Greek government bonds maturing from 2020 onwards.
"As a result, all Greek government bonds are now impaired to the 30 September 2011 market value, which represents a write-down of approximately 60 percent," ING said.
ING's exposure to Greek debt stood at 500 million euros at the end of the third quarter, ING Group's spokeswoman Carolien van der Giessen told AFP.
When it published its second quarter results in August, ING said it provisioned 310 million euros due to writedowns on previous Greek government securities.
But despite volatile markets, ING continued to work towards separating its insurance and banking arms, its CEO Hommen said.
Regulatory approvals were underway to create a separate holding company for ING's European and Asian insurance and investment activities, he added.
ING said it maintained strong capital ratios in the third quarter, with its core Tier 1 ratio strengthening to 9.6 percent, with nine percent the minimum required to recapitalise European banks by 2012.
© 2011 AFP