has been declining for quarters in a row. It was known that corona would do no good here, but the profit fell a bit more than expected. Profit before tax fell from more than 2 billion euros to 542 million euros this year. Analysts had expected a decline to EUR 645 million.
Quarterly revenues were EUR 4.67 billion, a slight increase compared to last year, much higher than expected. But the biggest culprit is making provisions for loans that will not be repaid due to the corona crisis.
Still, Steven van Rijswijk, the new CEO who recently succeeded Ralph Hamers, is optimistic. He points out that the interest income in the pandemic remains strong and that investment income is still doing well.
Van Rijswijk: “I trust ING’s strength in these challenging times and believe that our strategic direction is the right one to lead us into the future.” He gives no further concrete prospects.
ING had to set aside an additional 800 million euros for risk costs in the investment banking department because the economic situation is deteriorating, there are ‘some individual bad files’ and a possible external fraud case, a phrase that probably refers to the German Wirecard. In Belgium, risk costs increased mainly due to ‘one large company file’, more than likely the clothing chain FNG.
At the Belgian branch, it is noticeable that the operating costs have risen sharply (+18 percent), while those in the Netherlands decreased (-3 percent). ING refers to the write-off of 43 million euros of goodwill on a previous acquisition and the higher costs for all kinds of regulatory matters. It is known that ING is currently putting a lot of effort into getting customer files in order with the money laundering rules.
The profit before tax of the Belgian branch shrank by 81 percent to 56 million euros. Without the higher risk costs and this impairment, profit before tax would have increased by 9 percent. The Belgian management will soon provide more information on the figures.
At the request of the regulators, ING is postponing its dividend payment until next year.