UPDATE 2-ING's Q2 profit falls 73% as loan provisions soar

* Pre-tax profit 542 mln euros vs 2 bln euros in Q2 2019

* Provisions 1.34 bln euros vs 209 mln euros in Q2 2019 (Adds CEO quotes on provisions)

AMSTERDAM, Aug 6 (Reuters) - ING Groep NV, the largest Dutch financial group, on Thursday reported second-quarter pre-tax profit fell by 73% to 542 million euros ($644 million), as it took 1.34 billion euros in provisions for bad loans amid the coronavirus pandemic.

The profit was lower than the 625 million euros expected by analysts, Refinitiv Eikon data showed.

But new CEO Steven van Rijswijk said that loan provisions have likely peaked and the company in July saw customer payment traffic improve to pre-COVID-19 levels.

“This year we’ve had the bulk of the risks, and the second-half risk costs should go down,” he said on a call with reporters.

A year ago ING reported a quarterly pre-tax profit of 2 billion euros and 209 million euros in provisions.

The higher provisions this year dominated the earnings, as interest income and fees and commissions were almost unchanged, though staff, regulatory and other expenses rose.

There were some provisions at ING’s mortgage-heavy retail operations, but its wholesale banking arm registered the most at 833 million euros.

The company said the provisions were focused among oil and gas customers but also included “a sizeable provision for a suspected external fraud case”.

Van Rijswijk declined to identify the case, though analysts had said the lender would have to book a loss on its exposure to collapsed German payments company Wirecard.

“This is a well-documented fraud case that you’ve seen in the press in the last number of weeks, as many banks also have an exposure to that company, for which we also took a provision,” Van Rijswijk said.

The bank’s shares closed at 6.16 euros on Wednesday, down 42% year to date.

$1 = 0.8420 euros Reporting by Toby Sterling; editing by Kim Coghill and Jason Neely