ING Pays EUR 1.23 Bln To Dutch State, Updates Views; Plans To Resume Dividends

(RTTNews) - Dutch financial services company ING Group N.V. (ING) Monday said it has paid 1.225 billion euros to the Dutch State as part of the EC Restructuring Plan. Separately, the company updated its financial targets in its Ambition 2017 program. ING added that it intends to resume dividend payments over the financial year 2015 after full repayment of Dutch State ultimately by May 2015.

ING noted that its payment to the State includes 817 million euros repayment of core Tier 1 securities and 408 million euros in interest and premium. The latest payment, which was approved by the Dutch Central Bank, brings the total paid to the Dutch State to 12.5 billion euros. This includes 9.3 billion euros in principal and 3.2 billion euros in interest and premium.

The company noted that the latest payment has been funded by a dividend from ING Bank to ING Group. This upstream will lead to a reduction of the Bank's core Tier 1 ratio of approximately 40 basis points.

ING earlier had said that the payment of 1.225 billion euros is the third tranche of a series of 4 tranches that are part of the EC Restructuring Plan. The fourth and final tranche, which will be paid ultimately in May 2015, will amount to 1.025 billion euros. The total amount of repayments to the Dutch State of 13.5 billion euros remains unchanged.

In a separate release, ING said that with its divestment programme and repayment of the Dutch State almost complete, it is in a position to look ahead to the future of ING Bank - to Think Forward.

ING said it aims to increase its lending book by nearly 4 percent annually, and the balance sheet by about 3 percent, mainly funded through customer deposits. The company added that a more diversified lending mix should result in a net interest margin of 150-155 basis points by 2017.

Chief Executive Officer Ralph Hamers said, "We will maintain strong discipline on operating expenses and will continue to seek further efficiency gains in areas such as IT and procurement. Our target for the cost/income ratio remains 50-53 percent. Declining risk costs coupled with business growth and new initiatives, partly offset by higher capital, should deliver a return on equity of 10-13 percent (based on IFRS-EU equity)."

The company also confirmed its target of a fully-loaded common equity Tier 1 ratio above 10 percent and a leverage ratio of approximately 4 percent.

ING's planned dividend payments over the fiscal year 2015 would grow into a pay-out ratio of at least 40 percent.

At the company's Investor Day in Amsterdam, The Netherlands, ING will present its strategy update with "Think Forward" as the theme.

ING said it will appoint a Chief Operating Officer to the Management Board Banking, with responsibility for Operations & IT, change management and procurement.

The company will also appoint a new Chief Innovation Officer, reporting directly to Hamers, and will be responsible for promoting and coordinating innovation ideas.

The company has divided its operating regions, based on their potential for improvement, into Market Leaders, comprising The Netherlands, Belgium, Luxembourg, Challengers including Germany, Spain, Italy, France, Australia, Austria, as well as Growth Markets including Poland, Turkey, Romania and its stakes in Asia.

On the NYSE, ING shares closed Friday's trading at $13.72, down $0.05 or 0.36 percent.