ING Swings to Q3 Net Profit On Investment Market

AMSTERDAM -(Dow Jones)- ING Groep NV (ING) said Wednesday that it swung to a third quarter net profit from a loss a year earlier because of improving investment markets and said its restructuring plans are on target.

Third-quarter net profit was EUR499 million, in line with a preliminary EUR500 million given Oct. 26, and up from a net loss of EUR478 million a year earlier.

The preliminary figures were given when the company announced plans to shed its insurance business, its U.S. on-line bank and some Dutch retail banking operations, while launching a EUR7.5 billion rights issue.

The underlying net result for the third quarter before divestments and special items was EUR778 million, up from an underlying net loss of EUR568 million a year ago and compared with an underlying profit of EUR229 million in the second quarter this year.

Underlying net profit in ING's banking business was EUR264 million, helped by strong interest income, improved financial markets results and lower costs, ING said.

At the insurance arm, the underlying net profit was EUR514 million, positively influenced by favorable market impacts and lower investment margins, the group said.

Shareholder equity increased by 19% to EUR26.5 billion.

ING said that operating expenses were reduced by EUR1 billion in the first nine months of 2009 and expects to reach a EUR1.3 billion target for the full year.

"ING achieved a strong commercial performance in the third quarter, illustrating the strength of our banking and insurance franchises even in this challenging economic environment," said Jan Hommen, chief executive of ING Group, adding that the decision to fully separate the banking and insurance business "is the right choice at the right time."

ING will repurchase half of a EUR10 billion state capital injection it received in October 2008, plus EUR1.3 billion in extra fees that the European Commission said it has to pay for a state guarantee on its EUR28 billion U.S. Alt-A portfolio.

Shares closed at EUR9.55 on Tuesday, up 30.29% in the year to date.

-By Bart Koster, Dow Jones Newswires; +31 20 571 5201; bart.koster@dowjones.com

(END) Dow Jones Newswires

11-11-09 0205ET