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Investing.com -- ING Groep (AS:INGA) on Thursday reported a fourth-quarter 2024 profit before tax of €1.77 billion, a 21.2% decline from the €2.25 billion recorded in the same period last year, sending shares down over 2%.
The drop was driven by increased operating expenses, higher loan loss provisions, and a normalization of interest margins.
The net profit for the quarter fell to €1.15 billion, down from €1.56 billion in the previous year, marking a 25.9% decrease.
Total (EPA:TTEF) income for the quarter remained largely unchanged at €5.41 billion. Net interest income declined by 5% year-on-year to €3.68 billion due to tightening margins, particularly in Germany and Belgium.
However, fee and commission income rose 13.9% to €1 billion, bolstered by increased customer trading activity and capital market transactions.
Operating expenses rose by 8.5% year-on-year to €3.34 billion, reflecting higher staffing costs, regulatory fees, and investments in business growth.
Loan loss provisions also jumped, reaching €299 million in the quarter, compared to just €86 million in the same period last year.
The bank expanded its mobile primary customer base by 434,000 in the quarter, contributing to an annual increase of 1.1 million customers, bringing the total to 14.4 million.
Core lending grew by €7.2 billion in the quarter, primarily in residential mortgages, while core deposits increased by €16.4 billion.
ING’s common equity tier 1 ratio declined to 13.6% from 14.7% a year ago, following shareholder distributions.
The bank remains cautious about 2025, citing economic uncertainty and geopolitical risks but expects steady income levels supported by fee growth.
"2025 guidance is largely in with consensus but with downside risk from somewhat higher cost
guidance," said analysts at RBC Capital Markets in a note.