World Economy

ING Outshines European Peers

ING Outshines European PeersING Outshines European Peers

Dutch financial services company ING Group easily beat market forecasts on Wednesday with a 27% jump in quarterly earnings, helped by strong loan growth as it added hundreds of thousands of customers.

Its shares jumped nearly 9%, outperforming European competitors, but were still down 18% this year, reflecting investor concerns about the health of Europe’s banking sector, Reuters reported.

Chief Executive Officer Ralph Hamers said “operational conditions remain difficult, with the economic shock of a Brexit vote (and) low interest rates.”

However, ING appears to be succeeding where other European lenders are failing, in boosting lending.

The bank’s core lending book grew by €14.8 billion ($16.5 billion) in the second quarter, or up 70% from a year earlier, with gains across geographies and sectors.

Roughly half of its new customers were in growth markets Turkey, Romania and Poland, with around 45% in developed markets Germany, Australia, France, Italy and Spain, an official said.

Lending to large corporate clients continued to grow, funding large assets, such as pipelines, telecommunications networks and factories, while it drew retail customers away from competitors with new online banking tools.

ING said it maintained margins despite falling interest rates by diversifying products out of lower yielding mortgages and into higher margin structured finance business.

It kept its long-term guidance of 3-4% annual loan growth, Hamers told journalists. The economic effects of Britain’s vote to leave the European Union should have a limited impact on the company’s business, although he said growth would not be consistent every quarter.

European stress tests, released on Friday, showed that in a theoretical economic and financial shock, ING’s capital level would drop to 9% from 12.7%, faring better than many other banks tested although not as well as some others.