By RTT News,
May 07, 2014, 03:53:00 AM EDT
(RTTNews.com) - Dutch financial services company ING Group NV ( ING ) reported Wednesday a loss in its first quarter, compared to a profit last year, reflecting loss related to the deconsolidation of Voya and the impact of the Dutch pension fund changes, as well as lower premium. However, ING Banking unit posted higher results on increased net interest margin and lower risk costs as economic conditions improved.
The company's net result for the first quarter was a loss of 1.917 billion euros or 0.50 euro per share, compared to a profit of 1.897 billion euros or 0.50 euro per share last year. Prior-year results have been restated to reflect the change in accounting policy.
In April, ING U.S. started operating under the name Voya Financial, Inc., and ING reduced its stake in Voya to approximately 43 percent, as per the requirement to divest more than 50 percent of this business by year-end. This resulted in a 2.005 billion euros after-tax loss. Also, the company recorded charges of 1.059 billion euros for completing the Dutch closed defined benefit pension plan agreement.
Underlying net result, which excluded items, totaled 988 million euros, down 15.6 percent from last year's 1.170 billion euros.
Chief executive Officer Ralph Hamers noted that the company made a strong start to 2014, demonstrating good commercial growth.
Underlying result before tax fell 14.1 percent to 1.384 billion euros from 1.611 billion euros in the previous year. However, ING Bank posted an underlying result before tax of 1.176 billion euros, slightly higher than last year.
Total underlying income climbed to 8.403 billion euros from 7.494 billion euros last year. ING said its quarterly results were driven by the strong performance of ING Bank and a substantial improvement in the results of NN Group's ongoing businesses, particularly in the Netherlands.
In the quarter, gross premium income declined to 3.49 billion euros from 3.63 billion euros last year, while total investment and other income surged.
The capital position of ING Bank remained strong, with a fully-loaded CET1 ratio of 10.1 percent at the end of the quarter. The first -quarter underlying return on IFRS-EU equity rose to 10.2 percent, within the range of Ambition 2017 target.
Further, the company announced measures to strengthen its standalone capital structure with a further 850 million euros and confirmed that the intended IPO will comprise only secondary shares.
Regarding the future, Hamers said, "As we look forward to the rest of this year, we remain committed to achieving our strategic priorities and advancing further towards the completion of our restructuring. I am confident that the work we are doing will strengthen our company for the long-term...."
In Amsterdam, ING shares are losing 0.06 euros or 0.54 percent, and trading at 10.13 euros.
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