ING Group has today reported a 36% fall in first-quarter pretax earnings that beat forecasts as the Netherlands' largest bank booked higher loan loss provisions but retail operations held up well.
Earnings fell to €1.02 billion from €1.58 billion but easily beat the €549m forecast by analysts, Refinitiv Eikon data showed.
ING cautioned that the impact of the coronavirus pandemic escalated through March.
It took €661m in loan loss provisions, up from €207m a year earlier. They reflected a mix of existing and new problem loans for mid-sized and large customers, ING said.
Some €206m in provisions stemmed from generally worsening economic conditions while €41m in provisions on its US loan book were linked to falling oil prices.
"The Covid-19 pandemic is profoundly affecting society and the economy throughout the world, and it will continue to do so for some time," CEO Ralph Hamers said.
ING shares are down more than 50% year to date.
The bank said gross results improved at its large retail banking businesses in the Netherlands, Belgium and Germany, while its wholesale banking business saw a sharp decline due to the provisions.
Lending grew by €14.8 billion to €626 billion in the quarter, including €5.6 billion of loans generated under crisis programs underwritten in part by governments.
Hamers said that loan growth also reflected businesses drawing on credit facilities which were then deposited at ING. Customer deposits rose by €9.2 billion.
"Certainly part of the extra lending that we gave is on the back of the crisis and supporting our clients," he said.
The company's net interest margin, a measure of profitability, fell to 1.51% from 1.57% a quarter earlier.
Hamer said that was partly due to the bank's growing balance sheet, and partly due to extremely low interest rates, which make it harder to lend deposits profitably.
