Dutch bancassurer ING Group N.V. (ING) Wednesday reported a surge in the first-quarter profit. The company is also accelerating preparations for the initial public offering of its European insurance company, with the aim of taking it to market in 2014.
ING is required to sell its insurance and investment- management businesses before 2013, as it had taken huge federal aid during the financial crisis. ING U.S., Inc. had said on April 16 that it would sell 64.17 million common shares in an initial public offering to raise up to $1.5 billion.
Jan Hommen, CEO, said today, "ING has demonstrated steady progress so far this year on the Group's restructuring, culminating with the successful IPO of our US insurance business, which was completed last week...we are now accelerating preparations for the base case of an IPO of our European insurance company, with the aim of being ready to go to the market in 2014.''
Net profit for the first quarter increased to 1.804 billion euros ($2.36 billion) from 728 million euros. The prior-year results have been restated to reflect the new pension accounting requirements under IFRS which took effect on January 1.
The latest results included 1 billion euros in divestments, discontinued operations and special items, while prior year results included 149 million euros.
Underlying net profit was 800 million euros while it stood at 579 million euros last year. Underlying result before tax climbed 24.7 percent to 1.17 billion euros with a 1.6 percent growth in the Bank segment.
Bank earnings rebounded from the fourth quarter as well, supported by improvement in the interest margin and lower expenses.
According to ING, results from Insurance EurAsia remained under pressure amid the low yield environment. The ongoing businesses of ING U.S. performed well, driven by strong net inflows and growth in assets under management, while underlying results were hit by hedge losses in the Closed Block VA as equity markets rose.
Total underlying income climbed to 10.572 billion euros from 10.232 billion euros. This metric includes gross premium income, Interest result Banking operations, Commission income and Total investment & other income.
Total underlying income improved 3.9 percent in the Bank segment to 3.86 billion euros. Bank core Tier 1 ratio improved to 12.3 percent from 10.9 percent.
The stock is up 2.5 percent in early morning trade in Amsterdam at 6.76 euros.
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