ING Groep, the Dutch bank, announced a significant increase in its net profit for the second quarter of 2023. The boost in revenue was attributed to a surge in interest income.
According to the company's report, the net profit for the three months ending on June 30 amounted to 2.155 billion euros ($2.36 billion). This figure surpassed last year's net profit of EUR1.18 billion and also exceeded the expected consensus of EUR1.64 billion.
Total income for the quarter reached EUR5.76 billion, surpassing consensus estimates of EUR5.50 billion by 23%. Net interest income, which represents the difference between what banks earn on loans and pay clients for deposits, contributed EUR4.06 billion to the total. However, this was slightly lower than the consensus of EUR4.13 billion. The interest margin for the quarter stood at 1.56%.
Chief Executive Steven van Rijswijk attributed the income growth in both retail and wholesale banking to the current interest rate environment. He also noted the continued inflow of deposits across their retail markets.
ING's common equity Tier 1 ratio, a measure of balance sheet strength, stood at 14.9% at the end of the period. This represented a slight increase from 14.8% in the previous quarter and surpassed the consensus expectation of 14.6%.
Moreover, the company declared an interim dividend of EUR0.35 per share, compared to EUR0.17 in the previous year. This payout exceeded the expected consensus of EUR0.31.
Overall, ING Groep demonstrated impressive financial performance in the second quarter of 2023, driven by an increase in net profit and strong revenue growth.