By Ed Frankl
ING Groep narrowed its guidance for the year for slightly higher income from fees and lower costs, after second-quarter profit came in above expectations.
The Dutch lender said Thursday that 2025 fee income would increase at the higher end of its previously guided 5%-10% range while operating expenses would be at the lower end of its 12.5 billion-12.7 billion euro range ($14.3 billion-$14.5 billion).
ING also said it would increase its outlook for return on equity, a gauge of financial performance, for the full year to around 12.5%, from above 12.0% previously. The Amsterdam-based bank kept its guidance for 2025 total income to be roughly the same level as 2024.
"We are well on track to reach our financial targets," Chief Executive Steven van Rijswijk said.
The update came after second-quarter net fee and commission income jumped 12% compared with the same period of 2024, primarily from higher investment activity, ING said. However, total income was around the same level as last year as net interest income fell 7.7%, owing to lower European Central Bank interest rates and an appreciating euro.
Net profit for the three months to the end of June came in at 1.68 billion euros, or around $1.92 billion, beating the 1.57 billion euros expected in company-compiled consensus. It declared an interim dividend of 35 European cents a share.
Shares are up around 35% in the year to date.
ING kept its target for common equity Tier 1 ratio--a buffer to absorb potential losses--that it raised earlier this year owing to macroeconomic uncertainty. The bank's CET1 ratio was 13.3% at the end of June, converging toward the target of 12.8%-13.0% for 2025, after the bank launched a 2 billion euro share-buyback in May.
"The quarter started with heightened market volatility, as well as macroeconomic and geopolitical uncertainty, which still continue to this day," Van Rijswijk said.
"In that context, we are pleased that our customer base has shown significant growth and that our volumes have increased as we further diversified our income streams, with fees now making up almost 20% of our total income," he added.
ING's outlook excludes the impact of the sale of its Russian business, announced in January, which it said is expected to have a negative impact of around 800 million euros.
Van Rijswijk has previously said the bank is looking to strengthen its growth through acquisitions, and recently boosted its stake in specialist wealth manager Van Lanschot Kempen to around 20%. The bank added more than 300,000 new mobile primary customers in the quarter, it said.
Second-quarter results came days after the bank said that its finance chief Tanate Phutrakul would step down next year.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
07-31-25 0215ET
