ING Q1 net profit dips, to buy back shares

Dutch financial services group ING Groep NV reports a 5.6 per cent fall in first quarter net profit hurt by weaker banking results.

Dutch financial services group ING Groep NV on Wednesday reported a 5.6 per cent fall in first quarter net profit, hurt by weaker banking results and after a winter storm in Europe hurt insurance profits.

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Net income fell to € 1.894 billion ($ 2.57 billion) for the first three months of the year from 2 billion euros a year earlier, and compared with an average forecast of € 1.89 billion in a Reuters poll of 11 analysts.

"Strong commercial growth helped compensate for a challenging interest rate environment in the first quarter," ING Chief Executive Michel Tilmant said in a statement.

ING also said it would buy back € 5 billion worth of shares beginning next month for a year.

ING said that strong life insurance results in Europe and the Netherlands offset claims from a severe weather storm that hit Belgium and the Netherlands in January.

Insurance profit, excluding taxes and other charges, fell 10.7 per cent to € 1.076 billion.

On the same basis, banking profit fell 3.8 per cent to 1.38 per cent, hurt by flatter yield curves that make it more difficult for the bank to extract profits from long-term loans.

ING said in a separate statement that it would overhaul its Dutch retail banking operations, which currently operate under the Postbank brand.