ING’s Profit Doubled Again in the Third Quarter

This article was last updated on November 2, 2023

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ING Doubles Its Profit Yet Again

ING, the Dutch banking giant, has announced that its net profit for the third quarter has almost doubled, reaching almost 2 billion euros. This impressive growth is mainly attributed to increased income from interest, particularly from private customers. Additionally, ING was able to allocate less money into the fund for defaults, further contributing to its financial success.

It is worth mentioning that ING achieved a profit of 2.1 billion euros in the second quarter of this year. The striking profitability is significant, considering previous warnings regarding disappointing results due to the cooling economy and geopolitical tensions.

Despite the remarkable operating profit, ING’s CEO, Steven van Rijswijk, remains cautious. He expressed concerns regarding multiple factors that could hinder positive growth and emphasizes the high level of uncertainty. Rijswijk believes that any spread in geopolitical tensions may result in an increase in energy prices, leading to a cooling effect on the economy.

Benefits of Increasing Interest Rates

Nevertheless, ING’s financial position has been bolstered by the European Central Bank’s decision to raise interest rates. This favorable interest rate environment has paved the way for ING to attract an additional 181,000 customers, primarily from Germany, Australia, and Turkey.

Growth in ING’s Dutch Division

ING’s Dutch division also experienced significant growth, with profits increasing by a third. The increase in interest income played a crucial role in the division’s positive performance. Additionally, customers’ payments for various packages and services, such as travel insurance, contributed to the division’s success. ING raised the savings interest rate to 1.5 percent, further enhancing profitability. However, Rijswijk has yet to confirm whether this increased interest income will result in a further rise in savings interest rates.

Meanwhile, ING Belgium witnessed a withdrawal of 2.3 billion euros in savings, according to the quarterly figures. This can be mainly attributed to customers who chose to invest their money in Belgian government debt instruments (government bonds).

Rijswijk assures that this action by the Belgian government will not negatively impact the bank, stating that these amounts are relatively limited in the broader context. He emphasizes that such choices are the responsibility of individual countries.

Rewarding Shareholders with a Share Buyback Program

With the announcement of the new quarterly profit, ING has also revealed plans to launch a share buyback program, aiming to repurchase 2.5 billion euros worth of its own shares. This move will provide investors with a higher profit distribution, as the dividend will be spread over fewer shares.

The European Central Bank has granted permission for this new share buyback program, as ING’s capital buffers are deemed sufficient.