ING’s third quarter profit beats estimates

Bloomberg

ING Group NV put a run of bad news behind it, with a third quarter profit that beat estimates and progress towards its cost targets. The shares jumped the most in 18 months.
While net income plunged because of a 775 million-euro ($879 million) settlement for failing to monitor and prevent money laundering, the hit was less severe than some had feared as the Dutch bank beat expectations in several areas.
“Even the people who are bearish on ING will have a difficult time finding negatives,” Mediobanca analyst Robin van den Broek said by phone. The bank beat expectations in
areas including net interest income, fee income and capital buffers, he said.
ING shares have slumped this year even though the company beat expectations in previous quarters amid concerns over the settlement, a rising cost-to-income ratio and problems with Chief Executive Officer Ralph Hamers’ ongoing effort the accelerate the company’s digital transformation, particularly in Belgium.
The fine was “clearly kind of a shock to some of our people and certainly also some clients,” Hamers said in a Bloomberg TV interview. “For us, we knew that there were shortcomings in our processes, we didn’t wait for a fine” to start addressing them. As part of an agreement with Dutch prosecutors, the bank
acknowledged serious shortcomings in monitoring and preventing money laundering from 2010 until 2016.
Amid the public outrage in bank’s home country after the settlement, Chief Financial Officer Koos Timmermans announ-ced that he would step down when a successor is found. Ha-mers said that the bank is still searching for his replacement.