ING Groep on Thursday launched a 1 billion euro ($1.2 billion) share buyback as it beat quarterly profit expectations, boosted by a strong performance across the board with costs lower than anticipated.
The bank’s first-quarter profit stood at 1.56 billion euros, ahead of the 1.43 billion euros forecast by analysts polled by the lender and around 100 million euros higher than last year’s result.
“Total income has risen 3% (…) supported by strong commercial net interest income and a 13% year-on-year increase in fee income,” the lender’s CEO Steven van Rijswijk said in a statement.
ING said the double-digit increase in fee income was partly driven by higher customer trading activity, boosting its push to lift net fee and commission income as lower interest rates weigh on lending revenues.
As euro zone interest rates came down to 2%, European banks bet on fees to spearhead their continued growth in profitability and offset slower progress of net interest income.
The bank confirmed its outlook for 2026 and 2027. Its net interest income – the difference between the interest gathered from borrowers and paid out to depositors – climbed by 7% to 4.06 billion euros.
After flatlining in 2025 after the European Central Bank brought down interest rates as inflation slowed down, the metric is set to pick up again in 2026 and 2027, according to analysts at UBS.
Additionally, with the war in the Middle East upending trade of crucial resources, inflation risks may force central banks around the world to start lifting rates once more, which would further boost lenders’ interest income.
ING’s France-based peers Societe Generale and Credit Agricole also posted their quarterly reports on Thursday with the latter missing expectations due to higher provisions on Iran war uncertainty.
($1 = 0.8578 euros)
(Reporting by Mateusz Rabiega and Jakob Van Calster)
