ING Plans to Cut 1,000 Jobs as It Misses Q3 Estimates

The bank posted €788 million in profits, compared to the estimated €844 million.

ING Group NV has become the latest to conduct mass layoffs as the bank has decided to cut 1,000 jobs and close its offices in South America and some in Asia.

The bank highlighted that it is moving towards a digital transformation that requires much less staff than maintaining traditional physical branches.

“In wholesale banking, we will concentrate even more on core clients and simplify our geographical footprint, which will require fewer staff,” ING CEO, Steven van Rijswijk said. “This includes closing our offices in South America and some in Asia, while continuing to serve the international needs of clients from our regional hubs.”

Short on Earnings

The Dutch lender made this harsh decision as it missed earnings estimates for its third quarter of 2020. Profits for the period came in at 788 million euros ($925 million), much lower than the analysts’ estimation of 844 million euros.

The pre-tax profits remained 1.20 billion euros ($1.41 billion), while the forecasts predicted this figure to be 1.26 billion euros.

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The operational cost for the quarter also surged to 2.6 billion euros, again beating the street estimation of 2.35 billion euros.

“The pandemic continues to have a significant impact everywhere, with the second wave in Europe and the U.S. putting further pressure on consumers and businesses,” Rijswijk added.

However, ING lowered its loan provisioning for the quarter to 469 million euros. Additionally, the net interest of the lender went down by 5.7 percent to 3.33 billion euros.

Meanwhile, the bank added more than 200,000 customers in the quarter, calling its performance ‘resilient’.

“ING’s third-quarter results were resilient, with increased fee income from diversified income sources, coupled with good cost control and lower risk costs,” the CEO said. “We saw a reduction in net interest income resulting from margin pressure on liabilities combined with lower lending demand.”

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