Dutch banking and insurance giant ING set aside significantly higher provisions in the second quarter of 2012 against expected losses on the financing of (commercial) real estate, particularly in the Netherlands. The provisions against property loans more than doubled to EUR 120 mln from an average level of between EUR 40-48 mln in the previous four quarters.
Dutch banking and insurance giant ING set aside significantly higher provisions in the second quarter of 2012 against expected losses on the financing of (commercial) real estate, particularly in the Netherlands. The provisions against property loans more than doubled to EUR 120 mln from an average level of between EUR 40-48 mln in the previous four quarters.
As a result, ING Group saw its profits fall 22% to EUR 1.17 bn in Q2 from the EUR 1.5 bn recorded a year earlier. The group expects provisions against its property finance activities will remain high in view of uncertainties in the European retail market and aims to continue selectively downsizing the portfolio.
The percentage of property loans in arrears rose to 7.3% on a portfolio of EUR 31.7 bn. In the previous two quarters, the figure was confined to 6%. The percentage of property loans in arrears in Spain was particularly high at 18%.
Market conditions for property loans deteriorated particularly in the Netherlands, the UK and Australia. These three countries account respectively for 51%, 4% and 5% of the portfolio.
The percentage of loan instalments in arrears in ING's Dutch home mortgage portfolio was stable at 1.2%. Provisions against losses in this unit were confined to EUR 3 mln in the second quarter.
