07.11 Earnings Round-Up
**ING Reports Below-Forecasts Third-Quarter Earnings and More Job Cuts**
ING (AMS:INGA) registered third-quarter earnings of €609 million (£489 million), falling short of a Reuters poll forecast for €872 million (£696 million). The bank’s underlying result before tax came out solid at €1.02 billion (£818 million) despite credit value adjustments/debt value adjustments, de-risking losses and higher risk costs. The underlying interest margin rose to 1.33 percent from 1.26 percent in the second quarter of this year. The bank core Tier 1 capital ratio strengthened to 12.1 percent.
The largest Dutch financial services group also announced it will be cutting 2.5 percent of its workforce worldwide or more than 2,000 employees. ING said 1,350 positions will be shed from the European insurance operations and 1,000 from commercial banking. The company said the dismissals will be carried out over two years but did not specify when they are starting. ING expects annual savings of €260 million (£208 million) from 2015 onwards in its banking business and savings of some €200 million (£160 million) by the end of 2014 in insurance.
“It is painful to announce such steps today, because throughout these challenging times employees at all levels have worked tirelessly to prepare businesses for divestment, secure strong stand-alone futures for Bank and Insurance, and ensure that we are prepared for industry changes and regulatory requirements.” commented Jan Hommen, CEO of ING Group, on today’s lay-offs announcement.
By the early afternoon in the Amsterdam trading session the stock price remained around yesterday’s closing level of €6.88 having reached a session high of €7.035.
**BNP Paribas Fares Well In Challenging Eurozone Environment**
BNP Paribas (EPA:BNP) reported solid earnings in the third quarter, outperforming by a large margin its results in Q3 2011 when the bank was negatively exposed to the sovereign debt crisis and took a €2.2 billion (£1.76 billion) hit on its Greek bond holdings. This quarter net profits more than doubled year-on-year to €1.3 billion (£1.04 billion). Tier 1 core ratio stood at 9.5 percent at the end of September beating the bank’s 9 percent target. There was a €774 million (£597 million) loss on re-evaluation of BNP’s debt, which was partially offset by a €427 million (£342 million) gain on assets sold by Fortis Bank, the bank’s Belgian subsidiary.
!m(/uploads/story/741/thumbs/pic1_inline.png)“Thanks to its balanced and diversified business model, BNP Paribas Group confirmed this quarter its resilience in a challenging economic environment.” said chief executive Jean-Laurent Bonnafé.
Recently Standard & Poor downgraded BNP Paribas by one notch to A plus from double A minus as a result of the ongoing Eurozone recession. The French bank derives most of its revenue from the region and owns BNL, one of Italy’s largest banks.
BNP Paribas shares have risen by 4.14 percent to €40.74 in today’s trading on the Paris Stock Exchange.
**News Corp Beats Wall Street Expectations**
News Corp’s (NASDAQ:NWS) earnings beat Wall Street expectations as adjusted earnings per share reached $0.43 for the quarter that ended in September on profit of $1 billion (£625.6 million). Forecasts were generally around the $0.37 a share level. Growth in regional sports networks FX and Fox News Channel boosted operating income by 23 percent year-on-year to $953 million (£596 million).
“Even against considerable currency headwinds due to a stronger dollar, we were able to increase News Corp’s revenue and adjusted segment operating profit over the prior year quarter while continuing to make key investments to position us for future growth.” said Rupert Murdoch, chief executive of News Corp.
Shares in News Corp edged slightly up by 1.77 percent in afterhours trading from yesterday’s closing level of $24.28 and are expected to gain further ground today.
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