A giant poster hides construction work taking place on the Belgium headquarters of ING Groep NV's building in Brussels.
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Fourth-quarter net income was 1.43 billion euros ($1.92 billion) compared with 1.19 billion euros a year earlier, ING said in a statement. That missed the 1.63 billion-euro median estimate of 12 analysts surveyed by Bloomberg. It incurred 643 million euros in special items after tax, including expenses for the job cuts announced today.
ING also set aside more money for bad loans and reported a weaker capital ratio as it repaid a government bailout. Chief Executive Officer Jan Hommen, 69, is eliminating 1,400 jobs in the Netherlands and 1,000 in Belgium, adding to the 2,350 cuts in commercial banking and insurance announced in November, as he aims to reduce costs by 1 billion euros a year by 2015.
"Overall the picture doesn't look rosy," said Benoit Petrarque, an Amsterdam-based analyst at Kepler Capital Markets. "It looks like there will be continuing pressure on the income side from low interest rates and lengthening of the funding profile, while operating expenses are not shrinking much despite all cost cutting efforts."
ING fell 3.3 percent to 6.70 euros at 2:36 p.m. in Amsterdam, heading for the lowest level in three months and giving the company a market value of 26 billion euros. The drop exceeded the 0.3 percent decline for banks in the Stoxx Europe 600 Index and a 0.2 percent decrease for Europe's benchmark gauge for insurance companies.
The company said underlying operating expenses will probably decrease to 8.8 billion euros by 2015 from 8.9 billion euros in 2012 as cost savings and lower impairments are largely offset by inflation and regulatory costs.
The job losses announced today will mainly affect workers in IT and call centers as customers switched to new technologies for banking transactions faster than expected, Hommen told reporters today. In the Netherlands the number of transactions via mobile phones or the Internet rose to 756 million in 2012 from 387 million in 2008, ING said in a presentation. Transactions through branches, phone calls or mail dropped to 146 million from 300 million.
Source: Bloomberg | Maud van Gaal