The Netherlands largest bank, ING Groep N.V. (NYSE:ING), reported a 23 percent fall in its second quarter earnings to 1.17 billion euro ($1.45 billion), from €1.51 billion for the same period a year ago. The culprit once more, was the weakening European economy, which led the bank to increase provisions for bad loans by 78 percent to €541 million. Excluding one-off items, ING’s earnings were down 17 percent to €1.05 billion.
With regard to its exposure in Spain, ING Groep N.V. (NYSE:ING) will “reduce the funding mismatch in that country”, by cutting its total exposure to €34.9 billion by July, from €41.1 billion at the end of the first quarter, resulting in a loss of €234 million. Total exposure in Spain was reduced through the process of selling covered bonds and residential-mortgage-backed securities.
Maverick USA was down 3.3% for the second quarter, while Maverick Levered was down 2.1%. Maverick Long Enhanced was up 8%. Year to date, Maverick USA is up 31.8%, while Maverick Levered has gained 49.3%. Maverick Long Enhanced has returned 9.9% for the first six months of the year. Maverick Capital is a long/ short Read More
ING’s Chief Executive Jan Hommen, commenting on the results states, “ING posted solid second-quarter results. In these uncertain times the financial strength of the company is our highest priority: Capital, liquidity, and funding have all improved.”
The Netherland bank’s, banking division, profit declined 13 percent to €860 million from an earlier €994 million, mainly due to investment losses in Spain, lower interest margins, and as mentioned earlier, higher bad loan provisions. Its insurance earnings were almost halved in the quarter, from €548 to €288 million, as ING Groep N.V. (NYSE:ING), wrote down the value of its for-sale South Korean operations by €180 million.
ING was one of the institutions that received a financial bailout of €10 billion from government in 2008 crisis. The bank’s credit rating was downgraded in June, and to support its capital buffer it has delayed its repayment for the state funds. About dividends, CEO, Jan Hommen, said that ING won’t pay any dividends, until it has repaid the governments remaining €3 billion bailout funds. Hommen also said they will use funds obtained from the sale of its British and Canadian “Direct” Internet banking operations, to repay the state.
ING which was directed by the European Commission to split its banking and insurance activities, which according to Hommen will start with the sale of its Asian insurance operations, in the meantime, plans are being worked out for initial public offerings of its insurance operations in U.S. and Europe.
Just last week, the Royal Bank of Scotland Group plc (LON:RBS) (NYSE:RBS) reported its earnings, with a net loss of £1.99 billion, or $3.09 billion for the first half of the year. Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) also posted a 46 percent fall in its second quarter earnings, its net profit fell to €661 million from €1.233 billion for the same period last year.