January 31, 2018 / 6:59 AM / 2 months ago

UPDATE 2-ING quarterly profit misses on costs, weaker financial markets

(Updates with analyst quotes, details on loss at financial markets division)

AMSTERDAM, Jan 31 (Reuters) - ING Groep NV, the largest Dutch bank, on Wednesday reported a quarterly underlying pretax profit of 1.56 billion euros ($1.94 billion) that fell short of estimates, due to higher regulatory and investment costs, and a loss at its financial markets division.

Analysts polled by Reuters had seen an underlying pretax profit at 1.67 billion euros for the fourth quarter, compared with 1.96 billion euros in the same period a year ago.

CEO Ralph Hamers said the company had increased its loan book by 6.8 billion euros, with a slightly higher net interest margin and it won half a million new customers in the quarter.

“The continued growth of new customers coming to ING shows” the company’s fundamental health, Hamers said.

The company said costs rose on a mix of higher regulatory and increased investments in its digital offerings, as well as higher provisions for bad loans.

Its financial market division, which offers services to corporate clients including foreign exchange and interest rate hedging offerings, suffered, as other banks have, from lower volatility in financial markets.

“The results are sound after stripping out regulatory and one-off costs,” Jefferies analysts said in a note.

“We expect the stock to come under pressure on the first read, however we maintain our positive view.” Jefferies rates the shares a “Buy”.

ING closed at 16.07 euros on Tuesday.

$1 = 0.8041 euros Reporting by Toby Sterling; editing by Gopakumar Warrier and Jason Neely

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