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ING’s Results Disappoint After Being Hit by Russia

ING Group fails to live up to first-quarter expectations after being hit by Russian credit

The Dutch bank ING announced a worse-than-expected net income of 429 million euros ($452 million), which included an increase in the number of bad loans due to the exposure of the largest Dutch bank to the wars in Russia and Ukraine, while analysts were expecting net income during the first quarter equal to 679 million euros. Note that ING’s net income was $1.01 billion during the same period a year ago.

In March, ING revealed that 700 million euros of loans had been affected by sanctions against institutions and individuals in Russia. Moreover, the group stated that it had about 5.3 billion euros of loans in total in Russia, which represented 0.9% of the bank’s total loan holdings.

In an update released yesterday, the company committed €2.5 billion of capital to cover expected and unexpected losses to its Russia business.

Outside of Russia, the company’s results were also weak, with net income declining by 2.2% to €4.6 billion, largely due to lower funds flowing from the ECB’s long-term lending project, given that ING is borrowing at a negative rate.

Loan bookings grew slightly in the company after retail borrowing grew by nearly 5.6 billion euros supported by mortgages in Germany, Australia and Spain, while large capital borrowing fell by about 5.2 billion euros, and as for fees and commissions, it increased by 9.3% to 933 million euros.

The bank’s shares closed down at €9.14, down 25% year-to-date.

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