AMSTERDAM: ING Groep NV on Thursday reported better-than-expected third-quarter pretax profit of 1.92 billion euros ($2.22 billion), due to fee growth and better commercial lending margins, as well as lower costs for bad loans.

Analysts had seen pretax profit at 1.80 billion euros, according to Refinitiv data. In the third quarter of 2020, pretax profit was 1.20 billion euros.

"We saw continued lending growth in mortgages, whereas loan demand from businesses was influenced by the economic effects of the Covid pandemic," ING CEO Steven van Rijswijk said in a statement.

"Even so, our commercial lending margins were slightly higher and we saw strong fee growth in account package fees, investment products and lending."

Fees and commissions grew 20% to 882 million euros, ING said.

Helping profitability, the bank's net interest margin improved to 1.38% from 1.36% in the same period a year ago, while its cost-to-income ratio improved to 57.8% from 61%.

ING said provisions for bad loans were just 39 million euros, below normal levels, given it was able to reverse some provisions for bad loans taken amid the pandemic, as economies continued to rebound beginning in its key markets.

ING added 95,000 "primary" customers in the quarter, or those who bought more than one financial product from the bank, with strength in Germany and Poland. It has 14.1 million such customers in all.

Core lending growth was 3.1 billion euros, with 4.7 billion euros growth in consumer lending, mostly mortgages, and a negative 1.6 billion euros in wholesale banking loans, as commercial lenders repaid loans taken on during the pandemic.

"In Germany, a high number of customers took out consumer loans this quarter, led by improvements in the pre-approved lending process for existing customers, ING said.