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ING Group (AMS:INGA) * Underlying net profit of EUR 1,946 million, down 28.8% from 2Q07 on lower investment income
* Net earnings per share down 20.3% to EUR 0.94; EUR 5 billion share buyback added EUR 0.05 per share * Lower real estate & private equity valuations, lower equity capital gains account for EUR 754 million net decline
* Limited direct impact from credit and liquidity crisis in the second quarter
* P&L impact of EUR -44 million after tax from subprime, Alt-A and other pressurised asset classes * Revaluation of EUR -260 million after tax through shareholders' equity in 2Q to reflect market values
* All capital and leverage ratios well within target
* Spare leverage of EUR 3.9 billion after completion of share buyback and the 2007 final dividend payout * Available financial resources above target of 120% of Group economic capital * Interim dividend set at EUR 0.74 per share, equal to half of full-year 2007 dividend
* Commercial growth continued despite increasingly competitive markets
* Strong production of client balances of EUR 29.6 billion, bringing total to EUR 1,482 billion * New life sales up 8.8% and value of new business up 39.8% to EUR 267 million on constant currency basis
Chairman's Statement "ING continues to weather the turmoil in credit markets well, as writedowns on pressurised assets remained limited in the second quarter. We are, of course, not immune to the challenging environment around us, and the sustained weakness across financial markets put pressure on earnings," said Michel Tilmant, CEO of ING. "We took advantage of the brief market rally in April to reduce our equity exposure. Nonetheless, equity gains net of impairments were significantly below the exceptional levels realised last year. Combined with lower real estate and private equity valuations, lower investment results accounted for the vast majority of the profit decline. Interest income in the banking business rose strongly, despite competition for deposits. Risk costs increased, but remained below over-the-cycle norms. Costs remained under control in mature markets, while we continued to invest to support growth."
"All capital and leverage ratios are well within target. The Group has EUR 3.9 billion of spare leverage capacity after the completion of ING's EUR 5 billion share buyback and the payment of last year's final dividend in the second quarter. In line with our policy to pay an interim dividend equal to half of the previous year's total dividend, our interim dividend has been set at EUR 0.74 per share, to be paid fully in cash."
"ING maintained its commercial growth in these challenging market circumstances. The net new production of client balances was EUR 29.6 billion in the quarter, bringing the total to EUR 1,482 billion. Growth was driven by a large increase in lending, particularly at the Wholesale Bank. In Retail Banking and ING Direct we continued to grow savings despite strong competition for deposits. Sales of life insurance were up 8.8% excluding currency impacts as product innovation and expanded distribution helped compensate for lower demand for unit-linked products."
"Financial services companies are facing unprecedented market volatility, limited liquidity, and intensified competition for deposits, which we see continuing into 2009. We are executing our strategy in the context of this challenging environment by focussing on growing client balances, while keeping a close eye on margins and expenses. We continue to adapt our product range to meet our customers' changing needs, while investing to expand our distribution in growth markets. In mature markets we are on track with the transformation projects at our Retail Banking businesses in the Benelux, and expense reductions at the Dutch insurance business are now evident. As markets remain volatile, we will continue to manage our risk and capital with discipline. While financial markets are expected to put pressure on results in the short term, we are confident that ING will continue to create profitable growth for our shareholders over the long term through the breadth of our business and the strength of our franchise."
The full report including tables can be downloaded from the following link:
2008 Second Quarter Results ING Group
The following documents can be downloaded from around 08.00 am CET from the following links:
Quarterly Report
Analyst Presentation
Press Presentation
Group Statistical Supplement
US Statistical Supplement
Contacts
Media relations: +31 20 541 5433 Press Conference: 11:30 CET Webcast at www.ing.com
Video interviews: Available at www.ing.com and www.cantos.com
