SOURCE: ING Group

May 14, 2008 01:43 ET

ING's profit declines 15.2% on market downturn while commercial growth momentum remains robust

AMSTERDAM, NETHERLANDS--(Marketwire - May 14, 2008) -


* First-quarter earnings affected by the downturn in financial markets
  -  Underlying net profit declines 15.2% to EUR 1,589 million; net
     earnings per share EUR 0.74
  -  Underlying profit before tax from Insurance declines 31.2% while
     Banking increases slightly by 1.5%
  -  Lower real estate and private equity valuations, lower equity gains
     account for EUR 436 million net decline vs 1Q07
  -  Decline of most currencies against the euro has negative impact of
     EUR 55 million
* Limited direct impact from credit and liquidity crisis in the first
  quarter
  -  P&L impact from subprime, Alt-A and other pressurised asset classes
     limited to EUR 55 million after tax
  -  Market values impacted by lack of liquidity, with EUR -2.3 billion
     revaluation after tax through shareholders' equity
  -  Capital position remains strong, with key ratios within target and a
     spare leverage capacity of EUR 6.2 billion
* Strong commercial growth continued despite competitive and turbulent
  markets
  -  Net inflow of client balances reaches EUR 34 billion with total client
     balances of EUR 1,456 billion
  -  Interest result for banking up 17.2%, driven by volume growth and an
     improvement in the interest margin
  -  New life sales up 23.1% excluding currency impacts and value of new
     business reached EUR 320 million

Chairman's Statement

"The downturn in financial markets in the first quarter led to a decline in earnings, despite strong commercial growth momentum across the Group," said Michel Tilmant, CEO of ING. "Market declines reduced investment income at the insurance businesses, particularly compared with the first quarter last year when investment returns were above long-term assumptions. That led to a 15.2% decline in underlying net profit for the quarter. Lower real estate and private equity valuations and lower realised gains on equities had a negative impact of EUR 436 million after tax compared with the first quarter last year. The decline in most currencies against the euro reduced earnings by EUR 55 million."

"While the credit and liquidity crisis deepened in the first quarter, extending the disruption of global financial markets, ING's impairments on pressurised asset classes remained limited to EUR 55 million after tax. Market prices for these assets were inevitably impacted, with fluctuations in valuation reflected in shareholders' equity. ING's capital position remained strong, with key ratios within target and a spare leverage capacity of EUR 6.2 billion at the end of March."

"Commercial growth momentum was maintained across the group despite competitive and turbulent markets. The group generated a net inflow of EUR 34 billion in client balances in the quarter, with total client balances of EUR 1,456 billion at the end of March. Customer deposits at the banking businesses increased by EUR 14 billion excluding currency effects despite intense competition for savings as many banks face tight liquidity and higher wholesale funding costs. Higher volumes and an improvement in the interest margin drove the interest result on the banking side up 17.2%. Sales of life insurance and investment products remained robust despite the stock market volatility. New life sales were up 23.1% excluding currenciesand the value of new business reached EUR 320 million."

"As we saw in the first quarter, earnings and shareholders' equity are affected by movements in fixed-income securities, equity and real estate markets. Although we have perceived some improvement in equity markets and credit spreads since the close of the first quarter, investment returns and asset values will likely remain under pressure with the correlated impact on earnings. However, with ING's broad client access and product range, strong capital base and solid liquidity position we remain confident that ING is well positioned to help our customers manage their financial future while generating long-term profitable growth for our shareholders."


The full report including tables can be downloaded from the following link:

2008 First Quarter Results ING Group -- http://hugin.info/130668/R/1218885/255569.pdf

The following documents can be downloaded from around 08.00 am CET from the following links:

Quaterly Report -- http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=321032_EN&RevisionSelectionMethod=latestReleased

Analyst Presentation -- http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=321036_EN&RevisionSelectionMethod=latestReleased

Press Presentation -- http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=321034_EN&RevisionSelectionMethod=latestReleased

Group Statistical Supplement -- http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=321039_EN&RevisionSelectionMethod=latestReleased

US Statistical Supplement -- http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=321040_EN&RevisionSelectionMethod=latestReleased


Contacts

Media Relations:
T +31 20 541 5433

Investor Relations:
T +31 20 541 5571

Press Conference Call:
11:30 CET
Listen only via:
Audiocast via www.ing.com
NL: +31 20 796 5332
UK: +44 20 8515 2307

Analyst Conference Calls:
09:00 CET / 16:00 CET
Listen only via:
NL: +31 20 796 5332
UK: +44 20 8515 2303
US: +1 480 248 5085


2008 First Quarter Results ING Group -- http://hugin.info/130668/R/1218885/255569.pdf



Copyright © Hugin AS 2008. All rights reserved.

Contact Information