ING Groep launches $1.5 billion buyback despite Q3 pre-tax profit slump

AMSTERDAM (Reuters) – ING Groep NV, the largest Dutch bank, on Thursday reported a quarterly pre-tax profit of 1.38 billion euros ($1.36 billion), below expectations due to one-off charges, and rolled out a share buyback plan worth 1.5 billion euros.

Like other large European banks that have reported stable third-quarter results, ING benefited from higher interest rates.

Analysts had forecast a pre-tax profit at 1.50 billion euros, according to Refinitiv data, compared with 1.92 billion a year earlier.

The third quarter figure included exceptional charges of 631 million euros due to a hedge accounting adjustment and a one-off charge amid a government-imposed pause on mortgage payments in Poland.

Adjusted for those factors, analysts from Jefferies said “the underlying net interest income is up 6% quarter on quarter and significantly ahead of expectations.”

“The buyback will support shares until year end,” they said in a note.

The shares are down 19% year to date, closing at 9.89 euros on Wednesday.

Chief Executive Officer Steven van Rijswijk said the company had seen a “solid performance, especially in light of the challenging economic and geopolitical environment”.

Additions to loan loss provisions increased to 403 million euros from 39 million a year earlier, but were in line with the “through the cycle average”, ING said.

Among other key banking metrics, net interest margin declined to 1.28% from 1.38%. Without the one-off charges, margins would have improved to 1.42%, Van Rijswijk said.

The company’s CET1 ratio, the measure of solvency for European banks, was at 14.7%, which ING said made the buyback possible.

($1 = 1.0193 euros)

(Reporting by Toby Sterling; editing by Sherry Jacob-Phillips and Jason Neely)