ING profit almost fivefold, cash register for shareholders | Financial

Under the line, almost 1.5 billion euros in profit remained, where a year ago 299 million euros in profit was recorded. The profit jump has everything to do with the corona crisis. As a result, ING had to set aside more than 1.3 billion euros in the comparable period last year for loans that might never be repaid.

The bank is now profiting from the recovery of the economy. Moreover, according to new estimates, some of the provisions taken earlier are no longer necessary. These provisions were therefore released and increased the result even more in the past period.

As in the first quarter, the bank also noticed a clear increase in demand for investment products. These are interesting now that savings interest rates are very low and money in the savings account therefore yields virtually nothing. Last quarter, ING also gained more customers who purchase multiple products from the bank.

Interest

Due to the unfavorable interest rate climate, the bank’s interest income was under pressure. CEO Steven van Rijswijk suspects that low interest rates in Europe will persist for a while, given the current rate of the European Central Bank (ECB). However, Van Rijswijk cannot say whether this means that more Dutch people will soon have to deal with negative savings rates. ING is now also trying to invest more in ways to earn money than interest income.

Van Rijswijk is satisfied with the bank’s results. But he emphasizes that the pandemic is not over yet. All the risks that this entails must be carefully monitored. More than 80 percent of ING staff still work from home. According to Van Rijswijk, they will continue to assist customers to get through the difficult time.

Dividend

ING will soon return a total of 3.6 billion euros to the shareholders. This is possible, because banks in the eurozone will finally be allowed to reward their shareholders again from October if their financial situation allows. The European Central Bank (ECB) announced last month that it would not extend the corona measure that temporarily banned the payment of dividends and the purchase of own shares.

ING has also been busy with restructuring lately. In March it was announced that more than half of the Dutch bank branches will be closed. As a result, 440 jobs will be lost. This intervention came on top of measures that had already been announced last year. At the time, the bank said that about a thousand jobs had been cut in the investment banking and consumer activities abroad.

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