ING doubles quarterly profit and will generously reward shareholders

ING has more than doubled its quarterly profit, and the financial group wants shareholders to benefit from the bank’s success. ING will offer a share buyback plan in the near future with a goal of purchasing 2.5 billion euros worth of shares, the bank announced on Thursday when the quarterly results were released.

The bank’s bottom line showed a profit of nearly 2 billion euros, up from 979 million euros in the comparable period last year. The bank achieved the stronger figures “despite the cooling economy and amid polarizing geopolitical developments, which had an impact on business and consumer confidence,” said CEO Steven van Rijswijk.

This is mainly due to the increased interest rates, which has allowed ING to earn higher margins on savings, for example. Income from commissions also increased.

The bank’s confidence is also reflected in its low loan loss provisions. ING only set aside 183 million euros to cover loans that may never be repaid. A year ago, 403 million euros was earmarked to handle bad loans.

The decrease is striking, because De Nederlandsche Bank (DNB), the Dutch central bank, warned last month that the risks for banks are increasing due to rapidly rising borrowing costs. DNB also called on banks in the Netherlands to exercise caution, even though they may not notice any financial problems among customers in their figures.

But this could easily change, also because higher interest rates usually affect the financing costs of companies and households after a delay. “This makes banks vulnerable to potential losses in the future,” the DNB said.