ING Groep, the largest Dutch bank, has today beaten fourth-quarter expectations with a €1.05 billion pretax profit helped by lower loan loss provisions and a boom in retail investment.
It topped the €649m expected by analysts, Refinitiv Eikon data showed, though remained well below the €1.34 billion profit it booked a year earlier.
Provisions for bad loans fell 51% to €208m from the same time a year earlier, when the company was forced to write off several large individual corporate loans.
ING's CEO Stephen van Rijswijk said the company is taking sufficient provisions, though they were lower than those of some competitors, and despite a generally negative tone from the European Central Bank.
Van Rijswijk noted ING took large provisions in the previous two quarters and added that at some point economies will rebound from the crisis, helping some stressed customers recover.
"On the other hand, we still are cautious because the outcome of the crisis that may come when all the (government support) measures stop, we haven't seen as yet," he told reporters.
Fees and commission income rose by 4.9% to €771ms, but that was offset by a 7% fall in net interest income to €3.34 billion.
ING continued to win customers, adding 578,000 clients who consider it their main bank to 13.9 million, and 39.3 million in all.
Net core lending fell by €900m in the fourth quarter in the smallest decline since the start of the pandemic.
Deposits grew by €7.8 billion in the fourth quarter and by €41.4 billion in 2020 as a whole.
CEO Van Rijswijk said that the combination of rising retail deposits and near zero rates on offer in saving accounts are likely pushing customers to have a fresh look at how they invest.
"As an example, in Germany we had 326,000 clients that started to trade with our app, of which 20% were new-to-the-bank clients, so in this time when you might think people would stick to their existing bank, they make the jump to ING," he said.
The bank said its net interest margins fell to 1.41% in the fourth quarter, down from 1.57% at the end of 2019.
