Economy

ING starts the year strongly with strong profit growth | Financial

According to CEO Steven van Rijswijk, ING also succeeded in converting the financial aid from the economic support program of the European Central Bank (ECB) into loans for customers.

Net profit increased by 50% to approximately EUR 1 billion. This means that the bank performed better than analysts had generally anticipated. In general, an increase in the result had already been expected.

In the first quarter of last year, with which it is compared, it became clear that the virus outbreak and mitigation measures would cause major economic damage. Like other large banks, ING was then forced to set aside a lot of money for loans that may never be repaid, so profits fell sharply at the time.

Despite the low interest rates on savings, the amount of savings at ING has also increased considerably. That’s because due to all the corona restrictions, people spend less money and therefore hoard more. Van Rijswijk expects the spending pattern to change again as the corona measures are relaxed. For example, ING noticed last week that more is being spent in shops and catering establishments. Since last week, people are again allowed to shop without an appointment and the terraces are again limited access.

Savings interest has been very low for a long time. But whether small savers, with less than a ton in their account, will soon also have to deal with a negative interest rate, Van Rijswijk cannot say. He emphasizes that the Dutch government finds it undesirable for small savers to have to pay interest on their savings. It would also be important for them to maintain a buffer of savings. According to Van Rijswijk, however, it is possible to talk about how high that buffer of people should be. According to him, the level of the buffer recommended by budget information institute Nibud is much lower than 100,000 euros.

ING has been busy with reorganizing a lot lately. In March it was announced that more than half of the Dutch bank branches will be closed. As a result, 440 jobs will be lost. This intervention came in addition to measures that were already announced in November. At the time, the bank indicated that about a thousand jobs were being cut in the investment bank and the activities for consumers abroad. It is not yet clear how many jobs will disappear in the Netherlands as a result, according to Van Rijswijk.

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