Internet banking pays off for ING

Internet banking pays off for ING

Dutch financial group ING is reporting a 72% rise in first quarter profit, boosted by a strong performance by its remote banking subsidiary ING Direct.

Pretax profit at ING Direct rose 63% to EUR127 million in the first-quarter, with a particularly strong showing in the US and Germany. ING Direct in the US more than doubled profits to EUR52 million from EUR25 million in Q1 2004, driven by continued growth in funds, mortgages and client numbers.

The Canadian and Australian arms of the group underperformed year-on-year, but still turned in profits of EUR14 million and EUR15 million respectively. The UK operation, launched in May 2003, is still struggling to pay its way, posting reduced losses of EUR8 million against EUR11 million a year earlier.

Across the business as a whole ING Direct added one million customers in the quarter, raising customer numbers to 12.5 million.

Operating expenses increased 18.3% to EUR323 million as a result of higher marketing costs and higher expenses to handle the continued growth of the business. The average number of full-time employees increased by 1200 to 6100 compared with a year ago, mainly due to expansion in Germany, the US and the UK.

The cost/income ratio improved to 66.3% from 73.4% in the first quarter of 2004.

In total, ING Direct contributed 5.8% of the group's pretax profit in 2004, and 2.6% the year before.

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