ING reports swing to 1Q profits as markets improved
May 12, 2010 by Karen Mracek
By KAREN MRACEK • email@example.com • May 12, 2010
ING Group reported a return to profits for the first quarter, as both its banking and insurance division posted strong numbers.
The Dutch insurance and financial services company reported a net profit of euro1.33 billion ($1.69 billion), compared to a loss of euro793 million in the same period a year ago.
“ING made a strong start in 2010 with earnings recovering in both banking and insurance,” said CEO Jan Hommen, in a statement. “The performance of both businesses improved, while market-related impacts diminished in the first quarter as markets generally improved.”
Operating income for the company, which doesn’t include investment gains and losses, was euro1.02 billion ($1.29 billion), compared with a loss of euro236 million a year ago.
Des Moines is home to about 900 ING employees and is now the co-headquarters, along with West Chester, Pa., of ING Financial Solutions. This unit, created last year, is made up of ING’s annuity and other retirement products.
Operating profits for the U.S. Insurance business, which includes its Des Moines operations, was euro148 million ($187 million), down from euro154 million a year ago, reflecting lower investment margins as the company tried to manage its risk.
Profits from continuing life and retirement services business increased 18.9 percent to euro132 million ($167 million). Lower sales of variable annuities were mainly responsible for the 19.5 percent sales decline in the U.S., while sales of full service retirement plans increased, the company said.
Overall insurance operations, which are planned to be spun off into their own company by 2013, reported a profit of euro269 million ($341 million), before taxes, compared to a loss of euro954 million in the same period a year ago.
Operating income, which doesn’t include investment gains and losses, was euro415 million ($526 million), up 62.7 percent over last year.
ING Group reported last year that it would separate its banking and insurance businesses, in compliance with European Union requirements.
“Our priorities for this year are to ensure an orderly operational separation of banking and insurance and to improve the performance of both organizations to create strong independent companies going forward — and we are making good progress on all fronts,” Hommen said.
Insurance sales were up 20.5 percent from the previous quarter, and comparable to sales from the first quarter last year.
“We will work hard to build on these successes in the coming quarters, but we must remain vigilant as markets are still volatile and the economic recovery could prove fragile, as we have seen in recent weeks with severe market volatility amid concerns about sovereign risk,” Hommen said.