ING Group, the Dutch bank, has managed to reduce its operating costs in Q1, which helped it achieve profits of €1.33 billion (£1.13 billion).
The bank’s profit has increased significantly since it recorded a €793 million (£675 million) loss in the same period last year. ING said that this year, it would focus on separating its banking and insurance operations
In its Q1 2010 results, ING reported its operating expenses declining by 1.8 per cent, as savings made under its ‘Back To Basics’ cost-cutting programme had “more than offset higher deposit insurance premiums” and the “impact of currency exchange rates”.
In February, the bank said that it had cut €1.5 billion (£1.3 billion) from annual costs after reorganising its IT and other operations, and streamlining processes. This led to the bank exceeding by half its own savings targets under the programme. Other savings were achieved through 7,000 redundancies.
ING initiated ‘Back To Basics’ after it plunged to a €1.49 billion loss for 2008 in the credit crunch, compared to an €11 billion pre-tax profit the year before.
“The results to date are clearly encouraging,” said Jan Hommen, CEO of ING Group. “Our priorities for this year are to ensure an orderly operational separation of banking and insurance and to improve the performance of both organisations to create strong independent companies going forward – and we’re making good progress on all fronts.”
He added: “In the first quarter we also completed an inventory of all integration issues that need to be addressed in the separation project.
“Now we are designing solutions that aim to keep restructuring costs to a minimum while at the same time ensuring that both the bank and insurer benefits from lower operating expenses going forward.”