ING Groep NV saw a year-over-year rise in full-year 2016 profit, shrugging off the impact of restructuring charges and impairments and higher regulatory costs, on the back of "continuously positive" business momentum and lower risk costs.
The group reported a net result of €4.65 billion in 2016, up 16.0% from the year-ago figure of €4.01 billion. The underlying net result rose to €4.98 billion from €4.22 billion.
Additions to loan loss provisions reached €974 million, down from €1.35 billion a year ago. Underlying risk costs declined to 31 basis points of average risk-weighted assets in 2016 from 44 basis points the previous year. Regulatory costs, meanwhile, rose to €845 million from €620 million.
In addition, ING booked a €441 million profit in 2016 from NN Group NV, which it sold the same year, compared to a loss of €779 million in 2015.
For the fourth quarter of 2016, the net result reached €750 million, or 19 cents per share, compared to the year-ago €819 million, or 21 cents per share, and included a negative impact of €787 million of special items after tax related to the company's intended digital transformation programs.
Net interest income amounted to €3.34 billion in the fourth quarter of 2016, up from €3.17 billion in the year-ago period. Net commission income also rose, to €611 million from €607 million. Net investment income came in at €39 million, compared to a loss of €1 million in the fourth quarter of 2015.
ING booked a €138 million addition to loan loss provisions in the fourth quarter of 2016, down from €302 million a year ago.
The fourth-quarter 2016 group underlying return on IFRS-EU equity increased year over year to 11.1% from 7.0%.
The nonperforming loans ratio stood at 2.1% as of Dec. 31, 2016, down from 2.5% a year ago.
The group's phased-in common equity Tier 1 ratio stood at 14.1% as of Dec. 31, 2016, compared to 13.5% as of Sept. 30, 2016. The fully loaded ratio stood at 14.2% at 2016-end, up from 13.5% at the end of September 2016. ING Bank's fully loaded CET 1 ratio was 12.6% at the end of 2016, unchanged from three months ago.
The board proposed a final cash dividend for 2016 of 42 cents per ordinary share. Combined with the August interim cash dividend of 24 cents, the full-year 2016 dividend amounts to 66 cents per share.