Â· Total net profit +4% on first six months 2001 to EUR 2,837 million
Â· Operational net profit -2.0% on first six months 2001 to EUR 2,354 million, per share - 2.1% to EUR 1.22
Â· Total income EUR 40.5 billion (+11.9%, organically +7.6%)
Â· Good solvency level (ING Verzekeringen N.V.: to date, more than 160% of legally required level)
Â· Total operating expenses +2.7% (organically -0.8%)
Â· Interim dividend EUR 0.48 per share (2001Â½: EUR 0.47)
Â· ING reconfirms full year 2002 profit expectation
Total income grew by 11.9% to EUR 40.5 billion from EUR 36.2 billion in the first six months last year. Organically (excluding acquisitions and exchange rate fluctuations) total income was 7.6% higher. Total insurance income increased by 13.6% to EUR 34.7 billion. Life premiums improved by 8.8% to EUR 23.4 billion. Non-life premiums were up 59.7% at EUR 4.7 billion, mainly as a result of the acquisition of ING Comercial AmÃ©rica in Mexico. Banking income rose by 2.6% to EUR 5.9 billion as the strong improvement in the interest result more than offset the decrease in commission and other income.
Total Group operating expenses increased 2.7%. Organically, Group operating expenses decreased by 0.8% on the back of restructuring, integration and strict cost control. The headcount diminished by 2,565 on a comparable basis (i.e. excluding the effects of the joint venture in Australia and new acquisitions).
In insurance, the organic decrease in operating expenses was 4.2%. Operating expenses in banking rose organically by 1.3%. Excluding the expanding ING Direct activities, operating expenses in banking decreased by 0.6%. The efficiency ratio of the banking activities (excluding ING Direct) improved to 68.4% from 68.9% in the first six months of 2001 and 71.7% for the full year 2001.
Operational net profit declined by 2.0% to EUR 2,354 million from EUR 2,403 million in the first half of 2001. Total net profit, including non-operational results (see appendix 2), rose by 4.0% to EUR 2,837 million. The operational net profit benefited from a decrease in the effective tax rate from 23.5% to 19.4%, mainly due to realised tax benefits on sales of shares in the Netherlands, a change in tax legislation in Australia and the release of a tax provision. The operational result before taxation decreased by 6.4% to EUR 3,136 million on the comparable period last year.
Operational net profit from insurance increased by 13.0% to EUR 1,653 million reflecting a performance improvement in the Netherlands and North America. Total gross investment losses on fixed income securities of the insurance operations increased to EUR 369 million from EUR 109 million in the same period last year.
The gross result of the banking operations, i.e. before the addition to loan loss provisions, increased by EUR 51 million (+3.1%). The strong increase in interest result more than compensated the combined effect of lower commission income, lower other income and slightly higher expenses. The deteriorating economic conditions, however, necessitated a substantial increase in the addition to loan loss provisions from EUR 275 million to EUR 625 million, which equals 52 basis points of credit risk weighted assets on an annual basis. Consequently, operational net profit from banking fell by 25.4% to EUR 701 million.
Compared to the first quarter of 2002, the second quarter operational net profit of the insurance operations increased by 10.0% to EUR 866 million, its best quarter ever. The second quarter operational net profit of the banking operations rose slightly by 0.9% over the first quarter of 2002 to EUR 352 million.
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