The bank's loan loss provisions surged by 539.2% to €1.3bn in the April- June quarter
The Dutch banking and financial services firm ING has reported a 79% decline in its second-quarter profit, from €1.4bn to €299m, due to bad loans amid Covid-19 pandemic.
However, the bank said that its net interest income and fee income remained resilient, with income receiving further support from positive valuation adjustments.
The bank said that it has actively supported customers, employees and society during Covid-19 pandemic, as most of their staff worked from home.
With its digital model, ING saw a continued growth in primary customers by 156,000.
ING Group CEO Steven van Rijswijk said: “The Covid-19 pandemic continued in the second quarter to strongly impact the economies where we operate and how we conducted our own business. Against this backdrop we saw continued strong net interest income.
“Fee income from brokerage services in our German retail operation was higher, and in Wholesale Banking income was up due to increased client demand for Financial Markets services.
“We maintained good operational cost control and primary customer relationships grew, demonstrating the strength of our digital business model, which enhances customer experience and supports a better cost infrastructure. This led to a resilient pre-provision result.”
The total income of ING remained same, while operating costs increased by 14%
The total income of the firm during second quarter 2020 remained almost same as that of the corresponding quarter of 2019, while the operating expenses raised by 14%.
According to ING, the second quarter results reflects its higher collective provisioning driven by a deteriorated macro-economic position due to the Covid-19 pandemic.
The bank’s loan loss provisions surged by 539.2% to €1.3bn in the April- June quarter, from €209m in the same quarter a year earlier.
Rijswijk added: “In the second quarter we continued our work to become even more effective gatekeepers of the financial system. We set up a special Covid-19 taskforce to monitor transactions to protect customers from fraud.
“In our ongoing Know Your Customer (KYC) efforts we continued to improve customer due diligence files and rolled out enhanced tools in various countries to improve pretransaction screening and transaction monitoring.”