August 7, 2013 8:59 am

Asia unit weighs on ING profits

Dutch bank ING reported a bigger than expected fall in second-quarter net profit on Wednesday due to a loss at its insurance and investment management business in Asia.

The Netherlands’ largest bank by assets said net profit was €788m, down 39 per cent on the same period a year earlier. The figure came in below analyst expectations of €907m, according to a Bloomberg poll.

The €98m net loss from the Asian operations – compared with a net profit of €111m a year before – was due to guarantees and related hedges in Japan.

The Amsterdam-based group is in the final stages of a European Union-imposed restructuring that requires it to shrink its balance sheet by 45 per cent, including disposing of global insurance operations.

ING has completed about 70 per cent of the plan after selling a stake in its US insurer to the public in May.

ING chief executive Jan Hommen, who steps down in October, said the financial performance in all three business segments was robust in the second quarter.

Underlying pre-tax profit for the banking unit rose 14 per cent to €1.15bn as the interest margin improved and cost cuts paid off.

Mr Hommen said: “ING has made good progress so far this year as we work to improve our operational performance, execute our restructuring and prepare our banking and insurance companies for independent futures.”

The shares, having opened down about 1 per cent, were up 4 per cent at €8.18 in morning Amsterdam trading, against a slight fall in the wider AEX index.

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