ING Groep bank posts better-than-expected Q2 pre-tax profit

AMSTERDAM (Reuters) – ING Groep NV, the largest Dutch bank, reported on Thursday better-than-expected second quarter pre-tax profit of 1.74 billion euros ($1.77 billion), with low new loan provisions despite the worsening economic outlook.

Analysts had seen net profit at 1.45 billion euros for the three months ended June 30, according to Refinitiv data, down from 2.07 billion euros in the same period a year earlier.

Net income margin was flat at 1.36% and net interest income rose 3.7% to 3.47 billion euros, as the bank’s loan book grew by 4.3% to 642 billion euros.

Fee income also increased by 3.9% to 888 million euros.

“Our resilience is underpinned by our strong capital position and risk management framework, with limited risk costs in the second quarter,” said CEO Steven van Rijswijk in a statement.

“Risk costs” or loan provisions, were at 202 million euros, up from a negative 91 million euros in the same period a year earlier.

At first quarter earnings in May, the bank had taken an 834 million euro provision for its exposure to Russian commercial loans.

Addressing the impact of inflation, Van Rijswijk said the bank had experienced cost increases but they had been “well below inflation.”

ING’s Tier 1 equity ratio, a key measure of solvency for banks, was 14.7%

(Reporting by Toby Sterling; Editing by Jacqueline Wong)