ING Net up 14%

February 16, 2007

ING Groep NV, the Dutch bank and insurance company, posted a 14 percent rise in net profit Thursday, mostly due to strength in its insurance arm and lower tax rates.

Net profit was a company record €2.10 billion ($2.73 billion), rising from €1.84 billion in the same period a year earlier. Income from all sources was up 1.1 percent to €18.1 billion ($23.5 billion), as rises in investment income and commissions outweighed falls in income from insurance premiums and interest income.

Shares rose 0.1 percent to €34.67 ($45.06) in early Amsterdam trading.

Pretax insurance profit was up 31 percent to €1.34 billion ($1.74 billion), boosted by a strong performance by stock markets-leading to big gains in the portfolio of investments the company holds to pay potential claims.

Pretax banking profits rose 3.4 percent to €1.16 billion ($1.51 billion), as competition squeezed the difference between how much the bank could charge borrowers and how much interest it paid customers on deposits.

Taxes were down more than 40 percent to €287 million ($373 million)-an effective rate of just 12 percent-which ING said was due to lower national tax rates, and less taxes owed on income from stock.

Full-year net profit was up 6.7 percent to €7.69 billion (10.0 billion).

Chief Executive Michel Tilmant said in 2006 as a whole, ING benefited from “rallying equity and real estate markets, a benign credit environment, a favorable underwriting cycle in non-life insurance and lower taxes.”

He said the company’s Japanese and U.S. life insurance businesses were the weakest performers “and we are actively addressing those.”

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