Updated from 1:35 a.m. EST



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(ING) - Get Report

, the Dutch financial services company, reported underlying net profit of 778 million euros ($1.17 billion) in the third quarter, a swing from a year-earlier loss of 568 million euros, as it benefited from strong performances in financial markets.

ING late last month said it would move to separate its banking and insurance operations and planned to pay back early about half the aid it received from the Dutch state. In a statement Wednesday, CEO Jan Hommen said the move "I strongly believe ... is the right choice and the right time. "

Net earnings in the quarter were 499 million euros, including divestments and special items of 278 million euros. The loss a year earlier was 478 million euros

ING said it reduced operating expenses in the third quarter by 9.3%, or 330 million euros, from a year earlier.

"Negative market impacts were less severe than in previous quarters as equity markets improved," Hommen said. "However, results continued to be impacted by impairments on mortgage-backed securities and negative revaluations on real estate investments."

ING said the current quarter included 1.54 billion euros in market-related losses and provisions for bad loans, less than the 2.40 billion euros booked in the year-ago period.

ING was forced to seek two bailout packages from the Dutch state as a result of the financial crisis.

-- Reported by Joseph Woelfel in New York


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