In the third quarter, ING doubled its profits once again: net profit reached almost 2 billion euros. The bank primarily benefited from increased interest income, especially from private customers. Additionally, ING had to deposit significantly less money into the fund due to payment defaults.
ING had already made a profit of 2.1 billion euros in the second quarter of this year. High profits are noteworthy: The company had previously warned of disappointing results due to the cooling economy and geopolitical tensions.
But CEO Steven van Rijswijk says high operating profits do not mean the danger is over: “There are many factors that are not moving in the right direction and the uncertainty is great. Increasing geopolitical tensions may cause energy prices to increase. This will have a cooling effect on the economy.”
However, the European Central Bank (ECB) has increased interest rates again in recent months and ING is benefiting from this. The number of customers also increased by 181 thousand, especially in Germany, Australia and Turkey.
Not harmful
Profits of ING’s Dutch division also increased by a third. Here, ING once again benefited from high interest income. Customers also paid more for services such as payment packages and travel insurance. ING recently increased its savings interest rate to 1.5 percent. Van Rijswijk does not want to say yet whether higher interest income will ultimately lead to further increases in savings interest rates.
According to quarterly figures, ING customers in Belgium withdrew savings of 2.3 billion euros. ING states that this is mainly due to customers investing their money in Belgian government debt instruments called government bonds.
According to Van Rijswijk, this approach of the Belgian government does not harm the bank: “These amounts are generally relatively limited.” Van Rijswijk points out that it is up to the country itself to make such decisions.
Reward shareholders
Along with the new quarterly profit, ING also announced an additional reward for its shareholders. The bank wants to buy back its own shares worth 2.5 billion euros. This means that investors receive higher profit distributions because the so-called dividend is distributed over fewer shares.
The ECB approved ING’s new share buyback program because its buffers were high enough.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
