ING Real Estate has seen its net profits tumble following a sharp devaluation of its investment portfolio. ING RE, a unit of listed Dutch financial group ING, is reporting net profit of EUR 1 mln for the first nine months of 2008, down from EUR 362 mln in the same period last year.
ING Real Estate has seen its net profits tumble following a sharp devaluation of its investment portfolio. ING RE, a unit of listed Dutch financial group ING, is reporting net profit of EUR 1 mln for the first nine months of 2008, down from EUR 362 mln in the same period last year.
ING RE posted a loss of EUR 326 mln on its investment portfolio in the first nine months, down from a profit of EUR 224 mln a year earlier. The property group's finance division, in contrast, performed particularly well with a EUR 6 mln increase in profits, from EUR 163 mln last year to EUR 169 mln this year.
According to Wieger Sietsma, spokesperson for ING Real Estate, the devaluation has impacted across all property sectors but is mainly linked to the company's investments in Australia and Canada. ING's property portfolio has lost EUR 560 mln in value over the past nine months. This compares with a value increase for its portfolio of EUR 1.8 bn in the period 2004-2007.
While the results of its investment management arm fell from EUR 117 mln last year to EUR 75 mln this year, the real estate development division doubled its net profit to EUR 33 mln for the first nine months of 2008, from EUR 15 mln a year before. But the Development unit say its loss for the third quarter of 2008 jump to EUR 31 mln, from a EUR 4 mln loss in the third quarter last year.
The overall portfolio increased by 3.2% in the third quarter of 2008 to EUR 115 bn.
