ING Profits Plunge 96%

The Dutch financial-services firm said second-quarter earnings fell 96% to 71 million euros ($100.3 million) as a "weaker economic environment" continued to weight on its results.
Publish date:

Updated from 2:26 a.m. EDT



) -- Dutch financial-services firm

ING Groep

(ING) - Get Report

said second-quarter earnings fell 96% to 71 million euros ($100.3 million) from 1.92 billion euros a year earlier as a "weaker economic environment" continued to strain its results.

Although down substantially, ING's second-quarter earnings are a reversal from the first quarter when it posted a loss of 793 million euros.

Underlying profit in the second quarter was 229 million euros vs. 1.89 billiion euros a year earlier.

ING said its second-quarter earnings were hurt by real estate revaluations of 584 million euros.

ING said an improved interest rate environment and improved margins onsavings and lending led to a 19.4% increase in interest income at its banking operations. At the company's insurance operations, fees on assets under management were boosted by a recovery of equity markets in the quarter.

"However, sales of investment-linked products remained subduedas customers awaited a sustained market rally or opted for traditional life products," said Jan Hommen, CEO of ING, in a statement Wednesday.

Hommen said economic conditions are expected to remain "challenging for some time."

ING said it is reviewing strategic options to "facilitate our continued transformation and realize our ambition to repay the Dutch State." ING has agreed to sell several non-core or subscale businesses in an effort to streamline its businesses.

ING received 10 billion euros from the Dutch government last year to help it weather the financial crisis.

-- Reported by Joseph Woelfel in New York