New customers in major markets such as Germany, Italy and Spain helped leading Dutch bank ING to report better than expected quarterly profit on Wednesday. ING added 700,000 new customers in the first half of 2017, taking its total to 36.5 million, with the largest gains made in countries it has labelled as 'growth markets' and which also include Poland and Romania.
The Dutch bank has been winning customers on the strength of its mobile telephone banking software, while limiting its costs by building few branch offices where it is expanding. ING's underlying net profit in the April-June period fell 1 percent from a year earlier, to 1.4 billion euros ($1.65 billion). That however beat expectations for a drop to 1.28 billion euros in a Reuters analyst poll.
Profit was driven by continued growth in lending and deposits, at stable interest margins, Chief Executive Ralph Hamers said in a statement, "despite aggressive competition in some of our markets". "We expect this customer growth to continue," Hamers told reporters.
"This is digital growth, achieved more by word of mouth than by being a very competitive pricer." ING shares opened trading in Amsterdam with a slight gain, before slipping to trade 1 percent lower at 0755 GMT. They are up by around 17 percent this year. "ING released a better than expected set of results on the back of resilient margins, strong growth in commission income and lower than expected impairments", said analyst Matthias De Wit of KBC Securities.
Income from commissions grew 17 percent to 714 million euros, as net interest margin inched higher to 1.51 percent. Core lending in the second quarter grew by 6.4 billion euros, while ING attracted 5.3 billion euros in new customer deposits and provisions for bad loans fell by a quarter to 229 million euros.
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