ING net profit rises, aims to repay state aid in one year
Dutch bank ING on Thursday said net profit rose 12.3 percent in the first quarter and that it aims to pay within a year bailout money it owes the government from the 2008 financial meltdown.
Net profit rose to 1.38 billion euros ($2.0 billion dollars) in the first quarter of fiscal 2011, from 1.23 billion euros a year ago.
It beat expectations of analysts cited by Dow Jones Newswires of around 1.32 billion euros.
ING accepted a 10-billion-euro cash injection from the Dutch government in October 2008 at the height of the global economic crisis.
"We still have to pay back about five billion euros and that's without the repayment premiums," ING spokeswoman Caroline van der Giessen told AFP, saying two billion euros would have been paid back by May 13 this year.
"We aim to repay the remaining support by May 2012," the bank said in a statement.
ING is raising funds for repayment including by selling its subsidiaries online bank ING Direct USA and Dutch bank WestlandUtrecht.
"We continue to explore strategic options for our Latin American insurance business and we are taking steps to meet the other restructering demands... including the divestment of ING Direct USA and the carve-out of WestlandUtrecht Bank from our Dutch retail banking business," said the company's top executive.
"The restructuring of the group is on track," added Jan Hommen, ING group's chief executive officer in a statement.
"We continue to work towards the full separation of banking and insurance activities," he added.
The Dutch group said it was laying the groundwork for two initial public offerings (IPOs) of its insurance business -- one in the United States, and another based in Europe and Asia.
ING "will be ready to proceed with transactions when market conditions are favorable," Hommen said.
An IPO is when the owner of assets offers part or all of them for sale for the first time as independently quoted shares on a stock exchange.
IPOs are closely watched as an indicator of market sentiment and as potential investment opportunities.
ING said despite far-reaching restructering the company showed solid commercial growth across its franchises.
ING's banking activities accounted for 1.15 billion euros of the first quarter profit while the insurance business accounted for 234 million euros.
The bank's turnover in the first quarter came in at 14.4 billion euros compared to 14.05 billion a year ago.
© 2011 AFP