ING lifts 2024 total income guidance to more than 22 billion euros
Adds dividend, share price move, analyst comment and peers
By Matteo Allievi and Gianluca Lo Nostro
Aug 1 (Reuters) -ING Groep INGA.AS lifted its 2024 outlook for total income to more than 22 billion euros after posting second-quarter net interest income above estimates on Thursday.
The Netherlands' largest bank by assets had forecast total income of about 22 billion euros ($23.82 billion) in February, lower than the 22.58 billion euros reported in 2023.
"Loan demand was up in the second quarter, and we had more deposits coming, of around 15 billion euros. So all the levers that we pull point to good income," CEO Steven van Rijswijk said in a call with journalists.
After years of low interest rates, a surge in borrowing costs has been a game changer for bank profits in Europe, with shares soaring on the resulting shareholder payouts.
ING shares, which have risen more than 20% year-to-date, were down around 2% at 0819 GMT.
"Given the strong rally of the stock over the first half of 2024, further upside is more limited," said KBC analysts.
Net interest income, a key measure of earnings on loans minus deposit costs, beat analysts' expectations at 3.83 billion euros for the second quarter, supported by increased lending and deposit volumes. Analysts forecast a reading of 3.80 billion euros.
Net profit reached 1.78 billion euros, also beating estimates of 1.64 billion euros.
The CET1 ratio, a key measure of financial strength, fell to 14.0% at the end of the second quarter, as a result of the 2.5-billion-euro share buyback announced in May and is expected to converge towards its target of about 12.5% by 2025, the bank said.
The bank's net additions to loan loss provisions - money set aside for failing loans - totalled 300 million euros in the quarter, well above the 98 million euros recorded one year ago.
($1=0.9236 euros).
ING said it will pay a dividend of 0.35 euros per share in August, remaining stable compared to one year ago.
Some of euro zone's biggest banks beat second quarter earnings expectations last week, benefitting from higher costs of borrowing, although concerns about a tougher outlook held back their shares.
Reporting by Matteo Allievi and Gianluca Lo Nostro; Editing by Janane Venkatraman, Clarence Fernandez and Christina Fincher
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