ING Q3 Profit Falls; To Include ING Life Japan In Insurance IPO

(RTTNews) - Dutch financial firm ING Group N.V. (ING) Wednesday reported about 85 percent fall in the third-quarter net profit, reflecting mainly estimated loss on sale of ING Life Korea. Meanwhile, underlying net profit improved 5.6 percent, driven by solid performance at both ING Bank and Insurance EurAsia.

ING also announced that it will expand the scope of the base case Initial Public Offering, or IPO of ING Insurance, to include ING Life Japan.

Earlier, the Group had said that ING Insurance would be the entity for the base case IPO of ING's European insurance and investment management activities. After evaluation of several divestment options for ING Life Japan, the company has included this business within the scope of the base case IPO of ING Insurance, which will be ready to go to the market in 2014, the company said.

ING noted that it has today completed payment of 1.125 billion euros to Dutch State, which will reduce the principal amount of outstanding State aid to 1.5 billion euros. The firm has also reached an agreement with the State on the unwinding of the Illiquid Assets Back-up Facility.

Further, ING said its stake in ING U.S. was reduced to 57 percent in October, which is close to meeting the requirement to divest more than 50 percent of the U.S. by the end of 2014.

The Group also said it is advancing further into the end phase of its restructuring programme, which will be completed by 2016.

Ralph Hamers, CEO of the company stated, "ING continued to make strong progress on its restructuring programme in the third quarter, advancing further into the end phase of our transformation. At the same time, our businesses recorded another good set of quarterly results while delivering on our strategic priorities."

ING's net profit for the quarter fell to 101 million euros or 0.03 euros per share from 659 million euros or 0.17 euros per share a year ago.

Group underlying net profit improved 5.6 percent to 891 million euros, driven by solid performance at both ING Bank and Insurance EurAsia.

The company recorded losses on divestments in the quarter totaling 950 million euros, compared to 200 million euros last year, reflecting the estimated loss on the sale of ING Life Korea, which was announced in August 2013, and the sale of which is expected to close by year-end.

However, on an underlying basis, pre-tax profit improved 8.3 percent to 1.22 billion euros from 1.13 billion euros in the prior year. The company said it has restated its prior-year figures.

Underlying pre-tax results at ING Bank were 1.10 billion euros, driven by an increase in net interest margin to 1.44 percent.

Insurance EurAsia operating result climbed 89.6 percent to 218 million euros, helped by higher investment margin, lower expenses from the Benelux transformation plan and improved non-life results. As of the third quarter of 2013, Insurance ING U.S. is classified as held for sale and as discontinued operations.

Bank core Tier 1 ratio at the end of the period was 12.4 percent, or 12.1 percent on a pro-forma basis including today's payment to the State and the IABF unwind, ING said.

Separately, ING Bank announced today various liability management actions and said it will offer bondholders an opportunity to exchange seven series of subordinated debt into CRD-IV eligible Tier 2 securities. In addition the Bank will call $2 billion of hybrid Tier 1 securities, which will lower its funding costs. The European Commission has authorized the transactions.

In Amsterdam, the shares closed Tuesday's regular trading at 9.28 euros.