ING declares first dividend since 2008 financial crisis

AMSTERDAM: ING Groep NV would pay a dividend in 2015 for the first time in seven years and should maintain lending margins this year despite falling interest rates, the Dutch bank said yesterday.

ING said it intended to return at least €470 million ($532 million) to shareholders this year, or 12 cents a share. That could increase at the end of 2015 as the bank pledged to pay out a minimum of 40% of annual net profit.

The bank signalled last year that it could resume dividends in 2015 after repaying the last of a €10 billion bailout it received from the Dutch state during the 2008 financial crisis.

Chief financial officer Patrick Flynn said the bank was “facing headwinds” in lending due to factors including falling interest rates, Russian economic weakness and lower oil prices.

But he said ING would be able to keep lending margins at current levels and increase its loan book by about the 4% it is targeting.

“It remains to be seen what QE (quantitative easing) will do with margins on lending, but for now, for the next couple of quarters, I think we can hold our margins broadly where they are,” Flynn told reporters.

The bank’s underlying interest margin was 1.53% in the fourth quarter, up from 1.45% a year earlier.

ING attributed this to better margins on mortgages, lower rates on retail deposits and growth in high-margin structured lending.

“We still have the capacity to mitigate the impact of falling rates,” Flynn told reporters.

He cited structured lending products, complex corporate financing, as an area where the bank sees growth opportunities.

For the fourth quarter, the bank reported pre-tax profit of €783 million, down from €904 million in the same period a year earlier and below an average analyst forecast in a Reuters poll of €864 million.

But ING said the 2014 figure included €375 million in restructuring charges, as well as €273 million in one-off hits from revaluing debt and credit instruments.

ING also made fewer provisions for bad loans in the quarter, €400 million in total, down from €560 million a year earlier.

The bank said it did not expect significant provisions for bad loans to the oil sector, despite a €27 billion portfolio.