This morning, ING (NYSE: ING) announced that its quarterly profit dropped as a result of falling property prices and bad-debt charges. The banking group's profit fell to $100.2 million in the latest quarter. Excluding charges, the company's profit dropped to 229 million euros, which was far short of the expected profit of 388 million euros. The value of the company's real-estate holdings slipped 584 million euros due to falling prices across the globe. ING also incurred 825 million euros of provisions in order to cover customers who may not have been able to repay their loans. These provisions were higher than the 234 million euros set aside during the same quarter a year ago. The real estate charges were far greater than expected, while the loan-impairment charges met expectations.
What is interesting is that Oppenheim Research noted that ING's equity for its shareholders increased 15% during the last quarter, according to MarketWatch. The brokerage's analyst stated that "the economic value of ING Group has done much better than implied by the net profit." ING's CEO Jan Hommen did note that the company expects to see a challenge for "some time." Hommen added that the company does see signs of economic recovery.
ING also reported that it is taking a look at different strategic options for repaying the Dutch government. The financial firm received 10 billion euros of support from the government and will continue restructure and repay the government for its assistance.
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