Dutch ING Group posts lower-than-expected Q4 net profit in 2011

Feb 9, 2012, 15:41 GMT

Amsterdam - Dutch bank and insurance giant ING Group reported Thursday a lower-than-expected rise in 2011 fourth quarter net profit and warned that a Greek default would have serious consequences.

The group posted a fourth quarter profit of 1.19 billion euros (1.58 billion dollars), a steep increase on the 130 million euros it posted in the same period in 2010, though nevertheless below analysts' expectations.

'The financial crisis (in the European Union) spread further into the real economy, and uncertainty around the European sovereign debt crisis continued to erode confidence and amplify market volatility,' ING's CEO Jan Hommen said.

Hommen also said ING had set aside more cash for bad debt and wrote down 133 million euros on its holdings of Greek bonds.

'During the fourth quarter, income at the bank was affected by losses related to further de-risking of the investment portfolio, as well as re-impairments on Greek government bonds and other market impacts. However, commercial performance remained robust', Hommen said.

After selling down its portfolio of bonds issued mostly by Southern European countries throughout the year, ING now holds around 2-billion-euros worth, mostly Italian.

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