ING announced a €1.9 billion capital distribution after third-quarter profit increased from a year earlier but fell short of market expectations.
The Dutch lender reported net profit of €1.85 billion, an increase of 3.5% from the previous year.
Profit before tax increased 5.7% to €2.705 billion, while return on tangible equity reached 16.3%.
Commercial activity remained strong.
Net core lending increased €11 billion during the quarter, while net core deposits expanded €12.1 billion. Fee income increased 9.3% from a year earlier to €1.273 billion.
ING’s strong capital generation left its common-equity Tier 1 ratio at 13.3%, allowing the bank to announce the €1.9 billion distribution to shareholders.
The results nevertheless fell short of profit expectations, partly because risk costs were affected by a management overlay.
ING is also simplifying its wholesale-banking operations as management seeks to improve efficiency and concentrate resources on its strongest businesses.
The combination of a profit miss and substantial capital return provides another measure of conditions across European banking: earnings expectations are becoming harder to exceed, but strong balance sheets are still allowing major lenders to return significant amounts of capital to shareholders.
