ING Hit By Restructuring Costs -- Update

By Dow Jones Business News, 
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By Maarten van Tartwijk

AMSTERDAM-- ING Groep NV on Wednesday posted its first quarterly loss for over four years as the Dutch bank was hit by charges related to the final phase of its overhaul.

The Netherlands' largest bank by assets reported a EUR1.9 billion ($2.6 billion) net loss for the first three months of 2014, compared with a EUR1.9 billion net profit a year earlier.

The bottom line was hit by a EUR2 billion loss on its stake in Voya Financial Inc, the U.S. insurer ING floated last year. A EUR1.1 billion charge to restructure ING's pension scheme in the Netherlands also weighed on the results.

Chief Executive Ralph Hamers stressed that ING remained profitable once one-off charges were stripped out.

ING reported a so-called 'underlying' profit of EUR988 million, still down 16% from the same period last year as a drop in loan-loss provisions was offset by a weaker performance at ING's global commercial-banking arm and its Japanese insurance unit.

Mr. Hamers, who took the helm last year, is in charge of completing a five-year overhaul that aims to make ING a smaller and simpler bank. The Amsterdam-based group, once one of Europe's largest financial companies, was ordered by the European Union to shed assets in return for approval of a government bailout received in 2008.

I NG is now readying its European-Japanese life insurance business, NN Group, for an initial public offering that will mark the end of the company's restructuring. The flotation is expected to be one of the largest stock listings in Europe this year, but one that has also been greeted with skepticism.

NN generates most of its income in the Netherlands, where the economy is still weak and the life insurance market is saturated. Like domestic rivals, NN faces the potential threat of lawsuits from customers who claim they were misinformed about fees on unit-linked insurance products.

ING said Wednesday that NN posted an operating profit of EUR274 million in the first quarter, a 61% increase from the same period last year, largely driven by cost savings. It said it would inject another EUR850 million into NN to shore up its finances and bolster its cash buffer.

ING said it would sell the shares through a secondary offering, which is expected to take place this summer. Analysts value NN at around EUR7 billion.

Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com

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This article appears in: News Headlines

Referenced Stocks: ING , VOYA

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