Dutch multinational lender ING reported a 19% YoY decline in its consolidated net profit to €1.2bn ($1.2bn) against analyst expectations of €1bn ($1bn) for Q2. The lower profit is attributed to the higher regulatory cost and provisions. Total income came in 3.7% higher YoY at €4.7bn ($4.8bn). Net interest income rose 3.7% YoY to €3.5bn ($3.6bn) supported by a further recovery of liability margins as interest rates rose, and higher Treasury-related interest income. Net fee and commission income increased 3.9% YoY to €888mn ($905mn) driven by strong Retail Banking fee income. Regulatory costs came in at €214mn ($218mn), up 24.4% YoY on a €92mn ($$94mn) one-off contribution to the new Institutional Protection Scheme in Poland. For the quarter, loan loss provisions were 13bp of average customer lending at €202mn ($206mn) vs. a €91mn ($93mn) release last year. Further, more negative macroeconomic indicators impacted provisions, resulting in a net addition of €181mn ($184.5mn). The cost-to-income ratio rose 230bp to 58.5%. The net interest margin was stable at 1.36%. During the quarter, the lender added a total of 228k primary customers taking the tally to 14.2mn. The bank declared a dividend of €0.17/share and bought back shares worth €380mn ($387.4mn). The group’s CET1 ratio stood at 14.7%, down 100bp YoY.

ING’s 4.875% perp is trading at 83.61, up 0.02 points at a yield of 8.06%.

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