ING net profit rises as bank, aims to repay state aid
Dutch bank ING on Thursday said net profit rose 12.3 percent in the first quarter and said 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 by Dow Jones newswire analysts 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 one of its subsidiaries, either online bank ING Direct USA or Dutch bank WestlandUtrecht.
"The restructuring of the group is on track," said 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'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