AMSTERDAM — ING Groep NV, the Dutch banking and insurance group, says net profit was 39 percent lower in the second quarter from the same period a year ago, on losses incurred on a U.S. retirement product and on discontinued operations, and because it booked large one-time gains in 2012 on its pension plans.
However the company said Wednesday the operational picture at both its insurance arms and banking arms is improving, five years after its bailout by the Dutch state — which has still not been fully repaid.
Second-quarter net profit was 788 million euros ($1.05 billion), down 39 percent from 1.29 billion euros in the same period a year earlier.
ING said Wednesday its underlying banking earnings had improved to 1.15 billion euros from 1.01 billion euros, as its loan margins expanded and it saw strong deposit inflows.
The company said insurance operations were thriving — however it no longer reports them as a single unit. It plans to sell shares in its European and Asian insurance operations next year. It has already done the same for its U.S. arm this year.
"The financial performance in all three business segments was robust in the second quarter," said CEO Jan Hommen, who is due to retire in favor of Ralph Hamers in October. He praised the bank numbers as showing one of the strongest returns on investment the bank has seen since the crisis began, "despite higher risk costs (provisions against bad loans), reflecting the challenging economic climate."
Shares rose 3.1 percent to 8.104 euros in early trading in Amsterdam.
The U.S. insurance arm was hit by large losses on its variable annuities division, which is hedged to lose money when stock markets rise — as they have recently. The arm's operating result was 140 million euros, a 37 percent rise from a year ago. But that turned to a loss of 19 million euros after accounting for the hedge, while a year earlier, similar hedges in a falling market led to the opposite effect: a profit of 392 million euros.
