New chief executive Michel Tilmant knocked ING into shape last year, selling 14 businesses and freeing up €3bn of capital.

This year he is demanding growth and the European bancassurer is responding with an agility that belies its size. Underlying pre-tax profits are up 17 per cent to €6.4bn in the first nine months of the year.

The group's three high-growth businesses appear back on track after disappointing in the second quarter. ING Direct produced a 41 per cent jump in sequential profits. A cut in deposit rates has helped reverse a margin squeeze at the internet bank, which is still gathering assets rapidly. Life assurance in emerging markets increased its new business by a third. Profits from US pensions and annuities rose a healthy 31 per cent. ING is one of several European insurers doing well in this market.

The performance of ING's more mature operations, which still use two thirds of group capital, is just as encouraging. Growth in retail and wholesale banking in Holland and the Benelux countries is running at 13-14 per cent, well above that of rivals. Improvements in client service and efficiency are paying off in market share gains. A package of cost reduction and outsourcing measures should save another €465m by 2008.

Low credit costs and tax and accounting changes flatter these results somewhat. But Mr Tilmant's claim that there has been a positive step-change in ING's fundamental profitability is starting to look credible. If so, there is room for the group's valuation to catch up.

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