ING Groep NV, the bailed-out Dutch financial services company, said yesterday it made a profit in the third quarter, ending a year of heavy losses, as financial market conditions recovered.
Net profit was 499 million euros (US$748 million), from a loss of 478 million euros in the same period a year ago, when the financial crisis began.
“Negative market impacts were less severe than in previous quarters as equity markets improved,” CEO Jan Hommen said in a statement. “However, results continued to be impacted by impairments on mortgage-backed securities and negative revaluations on real estate investments.”
The current quarter included 1.54 billion euros in market-related losses and provisions for bad loans, less than the 2.40 billion euros booked in the year-ago period and 2.27 billion euros in the second quarter this year.
ING was forced to seek two bailout packages from the Dutch state as a result of the financial crisis.
Last month the company announced plans to split its banking and insurance arms by 2012 in order to simplify its structure and meet conditions set by European regulators. It said it would also issue 7.5 billion euros in new shares to begin repaying some of the assistance it has received.
Hommen said the separation of ING’s insurance arm and share issue are proceeding as planned.
ING’s banking arm reported third-quarter profit of 274 million euros, up from a loss of 216 million euros. Provisions for bad loans rose to 662 million euros from 373 million euros a year ago. Core Tier 1 ratio — a key measure of a bank’s solvency — was 7.6 percent, up from 7.3 percent at the end of June.
ING’s insurance arm reported profit of 587 million euros, from a loss of 496 million euros. This year’s figures include gains on investments as the stock market recovered, and a higher appraisal of the value of its insurance policies.
The company said earnings were helped by cost-cutting. ING has slashed 10,400 jobs this year.
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