ING Group reported nearly 31% drop in its net profit for the fourth quarter of 2019 (Q4 2019) at €880m compared to €1.27bn made in the fourth quarter of 2018 (Q4 2018).
The net profit per share for the Dutch banking group slipped from €0.33 in Q4 2018 to €0.23 in the fourth quarter of 2019.
ING Group’s net profit in the third quarter of 2019 was €1.34bn.
The underlying net profit before tax in Q4 2019 was down by 21% at €1.33bn compared to €1.7bn reported in Q4 2018. The banking group attributed this mainly to high net interest income supported by resilient lending margins along with robust net fee and commission income.
The total underlying income of the banking group was down by 1.4% from €4.5bn in Q4 2018 to €4.44bn in Q4 2019. The bank said that the decline mainly reflects lower income generated by the wholesale banking unit owing primarily to negative valuation adjustments in financial markets.
The bank was hit by increased regulatory costs and staff expenses during the fourth quarter. Regulatory costs in Q4 2019 were up by 13.9% at €303m from €266m in Q4 2018, while staff expenses increased 9.7% to €1.48bn in the reported period.
Overall, the underlying operating expenses of the bank increased by 4.2% at €2.67bn in Q4 2019 compared to €2.56bn reported in the corresponding quarter in the year before.
ING Group’s retail banking business reported a total underlying income of €1.34bn in Q4 2019, which marks a 0.9% decrease compared to the same quarter in the year before.
In the wholesale banking business, the bank’s total underlying income was down by 3.3% year-on-year at €1.32bn in Q4 2019. ING Group’s corporate line business saw the total underlying income in Q4 2019 come down by €4m to €71m compared to Q4 2018.
ING Group registered a net profit of €4.78bn in 2019
For the full year 2019 (FY 2019), ING Group’s net profit was up by 1.7% to €4.78bn or €1.23 per share compared to €4.7bn or €1.21 per share the year before. The bank’s total underlying income for FY 2019 was up by 1.2% at €14bn compared to €13.9bn made in FY2018.
ING Group CEO Ralph Hamers said: “Looking back at 2019, we see a year of solid commercial performance despite the challenging rate environment, geopolitical uncertainties and an increasingly complex and demanding regulatory environment. The fourth quarter of 2019 proved challenging.
“I’m proud of our commercial performance as pricing discipline and growth helped counter the pressure of negative interest rates. We recorded a 4.5% rise in underlying expenses for 2019, which includes a marked increase in regulatory costs, as well as costs related to our KYC enhancement programme.”
