ING records improved operational profit

19 February 2004

AMSTERDAM — Dutch banking and insurance giant ING booked more operational net profit than expected last year, largely due to a better performance in its banking division, which earned almost two-thirds more profit than 2002.

ING reported on Thursday that operational net profit rose in 2003 by 18.1 percent to EUR 4.05 billion. Its banking arm recorded operational profit of EUR 1.55 billion, news agency ANP reported.

The banking division’s profit easily compensated the stagnation of the multinational’s insurance arm, its largest business division. ING’s insurance profit fell by 1.2 percent to EUR 2.51 billion due largely to the strength of the euro.

But ING’s net profit fell by about 10 percent last year compared with 2002 due to exceptional posts. The net profit in 2002 was boosted by EUR 820 million in share sales and the sell-off of a joint venture in Australia.

It is currently time of year for many Dutch companies to present their yearly figures and ING is the latest multinational to report a better-than-expected 2003.

Despite the economic malaise last year, Philips, banking giant ABN Amro and chemical concern Akzo Nobel reported good results. But telecoms firm KPN announced another round of lay-offs, while airline KLM reported third quarter profit for its 2003-04 financial year.

Meanwhile, ING said it booked a one-off EUR 10 million loss on share sales, pushing the net profit down to EUR 4.04 billion. But this was only slightly less than the company’s better-than-expected operational profit.

Operational profit rose by 44.6 percent to about EUR 1 billion in the fourth quarter of 2003, due largely to bad debt provisions which did not need to be heavily topped up.

And over the entire 12 months of 2003, the bank did not need to make a large provision for bad debts, and this contributed to its profit, newspaper De Telegraaf reported.

The bank had earlier predicted that operational profit would be 10 to 15 percent higher than in 2002 and company chief Ewald Kist said 2003 had proved to be a successful year, in which the company profited from the recovery of the share market and the economic turnaround in the US.

Kist is “cautiously optimistic” about the coming year, but said it was too early to make a profit forecast.

Subject: Dutch news