ING posts solid increase in underlying net profit to EUR 1,492 million

• ING Group’s underlying net profit growth was driven by continued strong performance in the Bank and a significant improvement in Insurance results. The Group’s 1Q11 net result was EUR 1,381 million, or EUR 0.37 per share, including divestments and special items. The underlying return on equity improved to 14.7% (Bank 13.7%, Insurance 6.2%).
• Bank underlying result before tax rose 32.2% to EUR 1,695 million, fuelled by higher income and the continued normalisation of risk costs. The net interest margin remained healthy at 1.44%. Risk costs declined to EUR 332 million, or 42 bps of average RWA. The underlying cost/income ratio improved to 55.0% as expenses declined from 4Q10.
• Insurance operating result increased 35.5% to EUR 561 million, supported by higher sales and growth in AuM. The investment spread rose to 95 bps. Sales (APE) grew 11.4% versus 1Q10, or 8.0% excluding currency effects. The administrative expenses/operating income ratio improved to 40.0% on higher operating income and cost containment.
• Strong capital generation in ING Bank continued in 1Q11 with the Bank’s core Tier 1 ratio increasing to 10.0%. ING will proceed with the planned repurchase of EUR 2 billion of core Tier 1 securities from the Dutch State on 13 May 2011. The total payment will amount to EUR 3 billion and includes a 50% repurchase premium.

CHAIRMAN’S STATEMENT

“Both the Bank and the Insurance company posted strong results in the first quarter, illustrating clear progress on their respective performance improvement programmes as they prepare for their futures as stand-alone companies,” said Jan Hommen, CEO of ING Group. “The restructuring of the Group is on track. We continue to work towards the full physical separation of the banking and insurance activities, and we are laying the groundwork this year for two IPOs of our US and European & Asian insurance businesses so that we will be ready to proceed with transactions when market conditions are favourable. We continue to explore strategic options for our Latin American insurance business, and we are taking steps to meet the other restructuring demands imposed by the European Commission, including the divestment of ING Direct USA and the carve-out of WestlandUtrecht Bank from our Dutch retail banking business.”

“Despite the far-reaching restructuring that the company is going through, we have continued to show solid commercial growth across our franchises, which is a testimony to the dedication and professionalism of our staff as we work hard to maintain the loyalty of our customers. On that strong foundation, we have been able to show a rapid recovery as ING comes out of the financial crisis. We have improved efficiency and built up strong capital buffers in the Bank, while continuing to increase our lending to customers to support the economic recovery. As a result, ING is now in a position to repay a second tranche of support from the Dutch State out of retained earnings. And provided that this strong capital generation continues, we aim to repay the remaining support by May 2012 on terms that are acceptable to all stakeholders.”