ING GROEP 
In its first full quarter as a pure banking business, ING's underlying earnings before tax from its banking operations rose more than a third to 1.5 billion euros (1.18 billion pounds), beating analysts' average forecasts of 1.4 billion euros.
The bank, once the globe-spanning flagship of Dutch financial capitalism and still Europe's eighth largest by stock market value, was forced to retrench in the years after the financial crisis, taking 10 billion euros in state aid in 2008 and selling many of its international businesses.
It sold a stake in its insurance arm NN Group in July to comply with the terms of the rescue package.
Announcing the early repayment of the final 1 billion euro tranche of aid, Chief Executive Ralph Hamer said the bank was seeing signs of a recovery in its home market and of structural recoveries in parts of Europe.
"We had two milestones to make this year before we would consider an early payment: a successful IPO of the insurance company and the ... successful outcome of the asset quality review and stress tests, and we saw that just recently," he told a conference call for journalists.
ING comfortably passed the European Central Bank review last month, with an end-2013 tier 1 common capital rate of 10.1 percent, well above the required minimum of 8 percent.
"We were able to extend more credit into the economies in which we are active," Hamer said, adding that there were signs of a domestically-driven recovery in the Netherlands even as the euro zone's main growth engine Germany faltered.
"I see recovery in Ireland and in Spain. Structural recoveries," he said on a video posted on the bank's website. "And we see that the ECB is supporting growth by further interest rate cuts."
LOWER LENDING RISKS
ING's interest income rose 7.5 percent year on year while the underlying interest margin improved to 1.53 percent from 1.44 percent. Loan loss provisions were cut by 41.7 percent as lending risks fell in commercial banking and general lending.
ING said its global retail banking business also picked up, with its German operation posting record underlying third quarter earnings before tax of 213 million euros.
But group net profit, which rose sharply to 928 million euros due to one-off items, just missed consensus forecasts.
It said it was trying to manage down its exposure to Ukraine and Russia, whose economies have been hit by the conflict in eastern Ukraine and Western sanctions against Russia. Non-performing loan rates in both countries rose.
The debt repayment, six months early, means the first dividend of next year can now go to shareholders rather than the Dutch state. It will bring the total repaid to 13.5 billion euros, giving the state an annualised return of 12.7 percent.
"This support from the Dutch state saw us through the crisis and helped us to emerge stronger from it," Hamer said. "We are grateful to the Dutch state and its citizens, but also to our customers who continued to stand by us."
Shares in ING were up 1.2 percent at 0900 GMT, just outpacing an Amsterdam AEX index that rose 0.9 percent.
(Reporting by Thomas Escritt; Editing by Louise Heavens and John Stonestreet)
By Thomas Escritt
