ING Group N.V. (ING) Wednesday reported a 20.9 percent rise in fourth-quarter profit, benefited by gains on divestment of ING Direct Canada and Insurance Malaysia. The Dutch bancassurer, however, said it will cut 2,400 more jobs in its retail banking operations. This is in addition to the job cuts announced last November.
The company said Retail Banking Netherlands is expanding the transformation programme started in 2011, which will result in about 1,400 additional redundancies by the end of 2015 and reducing expenses by an additional 120 million euros per annum from 2016 onwards.
At ING Bank in Belgium, employee headcount is expected to decline by 1,000 by 2015, which will result in 150 million euros in annual cost savings by 2015.
According to ING, these initiatives are in addition to its measures in Commercial Banking and Insurance Europe announced in the previous quarter. In early November, the company had said it was cutting 2,350 positions, as it posted 64 percent plunge in third-quarter profit. All these measures are expected to reduce annual expenses by a combined 1 billion euros by 2015.
Fourth-quarter net results included 1.61 billion euros of gains on divestments, of which 1.14 billion euros was attributable to ING Direct Canada, 745 million euros to the sale of Insurance Malaysia and a loss of 244 million euros to the announced sale of ING Direct UK.
During the fourth quarter, the company made a payment of 1.125 billion euros to the Dutch State.
In the fourth quarter, ING's net result increased to 1.43 billion euros ($1.92 billion) or 0.38 euros per share, from 1.19 billion euros or 0.31 euros per share a year ago. The recent-quarter results included 643 million euros in special items after tax, mainly related to restructuring costs.
Excluding items, quarterly underlying net result totaled 373 million euros, compared with last year's loss of 785 million euros, reflecting a solid quarter at Insurance and lower Bank results due to incidental items and the Dutch bank tax.
During the recent period, the Group's underlying pre-tax profit amounted to 455 million euros, compared to a loss of 849 million euros in 2011.
In ING Bank, underlying pre-tax results plunged 72.3 percent to 184 million euros. In insurance, underlying pre-tax profit was 272 million euros, compared to a loss of 1.51 billion euros a year earlier.
Sales grew 12.7 percent at constant currencies. Bank's interest margin was 1.33 percent, lower than 1.38 percent in the preceding year.
For the full year 2012, ING Group's net result was 3.89 billion euros or 1.03 euros per share, down from 5.77 billion euros or 1.52 euros per share in the prior year. Underlying net results for the Group were 2.60 billion euros, down 5.2 percent from 2011.
ING's Core Tier 1 ratio for the year improved to 11.9 percent from 9.6 percent a year earlier, but dropped from the 12.1 percent in the third quarter. .
In Amsterdam, ING shares closed Tuesday's regular trading at 6.93 euros, up 0.86 percent.
by RTT Staff Writer
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