ING's profit declines 15.2% on market downturn while commercial
growth momentum remains robust
* First-quarter earnings affected by the downturn in financial
markets
- Underlying net profit declines 15.2% to EUR 1,589 million;
net earnings per share EUR 0.74
- Underlying profit before tax from Insurance declines 31.2%
while Banking increases slightly by 1.5%
- Lower real estate and private equity valuations, lower
equity gains account for EUR 436 million net decline vs 1Q07
- Decline of most currencies against the euro has negative
impact of EUR 55 million
* Limited direct impact from credit and liquidity crisis in the first
quarter
- P&L impact from subprime, Alt-A and other pressurised asset
classes limited to EUR 55 million after tax
- Market values impacted by lack of liquidity, with EUR -2.3
billion revaluation after tax through shareholders' equity
- Capital position remains strong, with key ratios within
target and a spare leverage capacity of EUR 6.2 billion
* Strong commercial growth continued despite competitive and
turbulent markets
- Net inflow of client balances reaches EUR 34 billion with
total client balances of EUR 1,456 billion
- Interest result for banking up 17.2%, driven by volume
growth and an improvement in the interest margin
- New life sales up 23.1% excluding currency impacts and
value of new business reached EUR 320 million
Chairman's Statement
"The downturn in financial markets in the first quarter led to a
decline in earnings, despite strong commercial growth momentum across
the Group," said Michel Tilmant, CEO of ING. "Market declines reduced
investment income at the insurance businesses, particularly compared
with the first quarter last year when investment returns were above
long-term assumptions. That led to a 15.2% decline in underlying net
profit for the quarter. Lower real estate and private equity
valuations and lower realised gains on equities had a negative impact
of EUR 436 million after tax compared with the first quarter last
year. The decline in most currencies against the euro reduced
earnings by EUR 55 million."
"While the credit and liquidity crisis deepened in the first quarter,
extending the disruption of global financial markets, ING's
impairments on pressurised asset classes remained limited to EUR 55
million after tax. Market prices for these assets were inevitably
impacted, with fluctuations in valuation reflected in shareholders'
equity. ING's capital position remained strong, with key ratios
within target and a spare leverage capacity of EUR 6.2 billion at the
end of March."
"Commercial growth momentum was maintained across the group despite
competitive and turbulent markets. The group generated a net inflow
of EUR 34 billion in client balances in the quarter, with total
client balances of EUR 1,456 billion at the end of March. Customer
deposits at the banking businesses increased by EUR 14 billion
excluding currency effects despite intense competition for savings as
many banks face tight liquidity and higher wholesale funding costs.
Higher volumes and an improvement in the interest margin drove the
interest result on the banking side up 17.2%. Sales of life insurance
and investment products remained robust despite the stock market
volatility. New life sales were up 23.1% excluding currenciesand the
value of new business reached EUR 320 million."
"As we saw in the first quarter, earnings and shareholders' equity
are affected by movements in fixed-income securities, equity and real
estate markets. Although we have perceived some improvement in equity
markets and credit spreads since the close of the first quarter,
investment returns and asset values will likely remain under pressure
with the correlated impact on earnings. However, with ING's broad
client access and product range, strong capital base and solid
liquidity position we remain confident that ING is well positioned to
help our customers manage their financial future while generating
long-term profitable growth for our shareholders."
The full report including tables can be downloaded from the following
link:
2008 First Quarter Results ING Group
The following documents can be downloaded from around 08.00 am CET
from the following links:
Quaterly Report
Analyst Presentation
Press Presentation
Group Statistical Supplement
US Statistical Supplement
Contacts
Media Relations:
T +31 20 541 5433
Investor Relations:
T +31 20 541 5571
Press Conference Call:
11:30 CET
Listen only via:
Audiocast via www.ing.com
NL: +31 20 796 5332
UK: +44 20 8515 2307
Analyst Conference Calls:
09:00 CET / 16:00 CET
Listen only via:
NL: +31 20 796 5332
UK: +44 20 8515 2303
US: +1 480 248 5085
