Bancherul - BANCI / ENGLISH / ING posts 2011 underlying net profit of EUR 3,675 million

ING Group's full-year 2011 net result was EUR 5,766 million, or EUR 1.52 per share, including divestments, discontinued operations and special items. The 4Q11 underlying net result was EUR -516 million. The 4Q11 net result was EUR 1,186 million, or EUR 0.31 per share.

Bank underlying result before tax came in at EUR 793 million in 4Q11, including EUR 79 million of realised losses from selective de-risking at ING Direct and EUR 133 million of re-impairments on Greek government bonds. Despite pressure on savings margins, the net interest margin rose to 1.42% from 1.37% in 3Q11. Risk costs were EUR 530 million, or 65 bps of average RWA, mainly reflecting higher losses on mid-corporate and SME lending in the Benelux.

Insurance underlying loss before tax was EUR 1,348 million in 4Q11, mainly refl ecting the previously announced charge for the US Closed Block VA assumption changes, as well as losses on hedges in place to protect regulatory capital. The operating result rose 20.4% from 4Q10 to EUR 478 million driven by a higher investment margin, a decline in expenses and lower interest costs. The investment spread rose to 106 bps fuelled primarily by the Benelux.

Given the uncertain financial environment, increasing regulatory requirements and ING's priority to repay the Dutch State, the Executive Board will not propose to pay a dividend over 2011 at the annual General Meeting in May 2012.

Chairman's Statement:

"The economic environment became more challenging in the fourth quarter of 2011. The financial crisis spread further into the real economy, and uncertainty around the European sovereign debt crisis continued to erode confidence and amplify market volatility. Despite this challenging backdrop and its inevitable impact on results, ING posted 15.1% higher full-year underlying earnings in 2011 compared with 2010," said Jan Hommen, CEO of ING Group.

"During the fourth quarter, income at the Bank was affected by losses related to further de-risking of the investment portfolio, as well as re-impairments on Greek government bonds and other market impacts. However, commercial performance remained robust. Funds entrusted grew by EUR 8.1 billion, underscoring the strong deposit-gathering ability of our franchise amid continued competition for savings in our home markets. Our strong funding profile enabled ING Bank to continue to support customers' financing needs. The capital position of the Bank remained strong, with the core Tier 1 ratio stable at 9.6% after absorbing the impact of higher capital requirements under CRD III which came into effect at year-end. As the economic recovery is expected to remain weak in 2012, we will continue to take a prudent approach to risk, capital and funding while working towards our Ambition 2015 targets."

"Our Insurance results were severely impacted by the update to policyholder behaviour assumptions on the US Closed Block VA, as announced in December, as well as losses on hedges in place to protect regulatory capital given the ongoing market turmoil. These factors led to a fourth-quarter loss on an underlying basis. However, operating results were up 20.4% from a year ago, demonstrating cost discipline and strong progress on performance improvement programmes. Significant milestones in the restructuring process were achieved in 2011, including the sale of Insurance Latin America and the completion of the legal and operational separation of Insurance US, Europe and Asia. In 2012, we will continue to focus on improving returns while preparing these businesses for stand-alone futures."