ING Groep, the largest Dutch bank, has today reported a worse than expected quarterly net income of €429m, including a surge in provisions for bad loans due to its exposure in Russia and Ukraine.
Analysts had forecast first-quarter net income at €679m, according to Refinitiv data, while ING reported a net income of €1.01 billion the same time last year.
"Net additions to loan loss provisions were €987m," the company said.
"The geopolitical situation, with the Russian invasion of Ukraine, had a significant impact on the risk costs in this quarter, with €834m of risk costs associated with our Russia-related exposure," it added.
In March, ING had disclosed that it had around €700m in loans affected by sanctions on Russian entities and individuals.
In addition, the company had said it had €5.3 billion in loans to Russian borrowers, representing about 0.9% of its total group loan book.
In an update today, the company said it had earmarked €2.5 billion in capital in all "to cover for expected and unexpected losses on our Russia-related exposure."
Outside the Russian impact, the company's results were lacklustre, with income down 2.2% at €4.6 billion, mostly due to less money from the European Central Bank's long-term lending programme, where ING borrows at a negative rate.
The company's loan book grew slightly, as retail lending grew by €5.6 billion, mostly for mortgages in Germany, Australia and Spain, while wholesale lending declined €5.2 billion.
Fees and commissions increased by 9.3% to €933m, the lender added.
Its shares are down 25% in the year-to-date.
