AMSTERDAM (Reuters) – ING Groep NV, the largest Dutch bank, on Thursday reported a 27% rise in fourth-quarter pretax profit to 1.33 billion euros ($1.50 billion) on better fee income and strong loan growth, although the result fell short of expectations.
Analysts had forecast pretax profit of 1.47 billion euros, according to Refinitiv data, up from 1.05 billion euros in the same period of 2020.
“I’m encouraged by increased lending volumes and strong fee income growth in the final quarter of 2021, a sign of growing confidence in the economy as the world seeks ways to live with the coronavirus,” CEO Steven van Rijswijk said in a statement.
Provisions for bad loans increased to 356 million euros from 208 million euros on expectations that rising inflation and interest rates could hurt mortgage customers’ ability to pay.
But the bank also said: “Although COVID-19 has had a negative impact on the global economy, defaults in our portfolio have been limited.”
Among key bank profitability measures, ING’s net interest margin shrank slightly from a year earlier to 1.37% from 1.41%. The bank has been under pressure from low interest rates, although it reduced the rates it pays on customer deposits.
However, fee and commission income rose 20% to 925 million euros as the bank charged retail customers more for banking packages, for payments, and for investment products..
Customer loans climbed 4.8% or by 13.4 billion euros to 632 billion euros, with good growth seen among wholesale banking customers and more mortgage loans to German customers.
ING shares are up 10% in the year to date and have nearly doubled in the past 12 months.
($1 = 0.8850 euros)
(Reporting by Toby Sterling; Editing by Sam Holmes and Edwina Gibbs)
