AMSTERDAM: ING Group NV, the largest Dutch lender, said it would repay the last of its state aid this week, bringing the prospect of dividends closer as it reported results sharply up on last year.
The bank made an underlying profit before tax from banking of 1.5 billion euros ($1.88 billion) in its first full quarter as a pure bank after selling a stake in its insurance arm, ahead of analysts' forecasts for a pre-tax profit of 1.4 billion.
The bank, Europe's eighth largest by stock market value and the only major Dutch lender that is listed, sold a stake in its insurance arm NN Group in July in order to comply with the terms of the state rescue package it received in 2008.
"We had two milestones to make this year before we would consider an early payment: a successful IPO of the insurance company and the second one was the successful outcome of the asset quality review and stress tests, and we saw that just recently," said Chief Executive Ralph Hamer.
The repayment, six months ahead of schedule, means the first dividend payment of next year can go to shareholders rather than the Dutch state as had been planned.
ING Group's net result came in slightly behind consensus forecasts at 928 million euros.
The bank's interest result, a closely-watched measure of earnings from loans, rose 7.5 percent compared to the same period in the previous year. The underlying interest margin improved to 1.53 percent from 1.44 percent last year, while provisions for loan losses were cut by 41.7 percent.
The repayment of a final tranche of 1 billion euros will bring the total repaid to the state to 13.5 billion euros, giving the Dutch state an annualised return of 12.7 percent.
"This support from the Dutch state saw us through the crisis and helped us to emerge stronger from it," Hamer said. "We are grateful to the Dutch state and its citizens, but also to our customers who continued to stand by us."
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