NETHERLANDS - Dutch financial services giant ING reported stable profits for 2002 despite being knocked by a 32% fall in pre-tax banking profits.
The firm matched its 2001 performance with operational net profits of E4.3bn in 2002.
Despite the extremely difficult economic and political environment we were able to match the strong result of 2001 thanks to our broad business mix and substantial expense reduction, said Ewald Kist, ING’s chairman.
Net banking profits fell by about 38% to E895m, hit by a E1.4bn rise in loan loss provisions. The bank blamed “sharply higher risk costs” for the result.
ING’s total income grew by 3.2% to E76.5bn while total operating expenses decreased by 3.1%. Operating expenses for insurance operations fell by 8.8%. Total operating expenses in banking increased by 1.4%. Operational net profit from insurance was 19.5% higher at E3.4bn.
Assets under management fell by E36.7bn, hit by negative markets and the strength of the euro. Overall, assets fell to E449bn, or a 12.5% drop.
Trading profits also fell by 58%, caused by equity price dives, to E454m.
But ING’s capital base remained strong due to a US$1.1bn perpetual subordinated loan and a E650m sale of its own shares. At year-end the capital base of ING Verzekeringen was 169% of the legally required level. The tier-1 ratio of ING Bank stood at 7.31% against the required minimum level of 4%.
ING maintained a cautious outlook for 2003 in view of the current economic and political uncertainties, and said that it would focus on core businesses, including savings and guaranteed products, pensions and developing markets.
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