By Elena Vardon

ING Groep posted a smaller-than-anticipated decline in net profit for the first quarter and confirmed its key targets, reassuring investors fretting about the impacts of U.S. tariffs and sending the Dutch bank's shares higher.

The Netherlands' largest lender on Friday reported a net profit of 1.455 billion euros ($1.64 billion) for the three months ended March 31. This figure beat the 1.40 billion euros estimate taken from a company-compiled consensus but was 7.8% lower than the same period the previous year due to heavier costs.

Total income for the quarter edged up 1.0% to 5.64 billion euros, also exceeding the 5.62 billion euros forecast. Growth in fees, commissions and investments income helped compensate softer commercial net interest income--the difference between what banks earn on loans and what they pay out on client deposits. This was despite growth in deposits and higher mortgage volumes, reflecting interest-rate dynamics following cuts from the European Central Bank.

Chief Executive Steven van Rijswijk acknowledged the geopolitical and macroeconomic uncertainty around the impact of trade wars. "These times also offer an opportunity for Europe, an opportunity to drive competitiveness and resilience, for instance, through simplification of regulations and through investments in infrastructure, technology, and defense," he said in a call with journalists, adding that the group is well positioned to play a key role in supporting this growth while navigating the volatility.

The bank has a robust capital position that allowed it to announce a fresh 2 billion euro ($2.26 billion) buyback program, in line with analyst expectations. ING will provide another update on shareholder returns in six months.

The executive added that the group continues to converge its common equity Tier 1 ratio--a key measure of balance-sheet strength--to its target level of around 12.5%. Due to the current circumstances, it is temporarily raising this view and guided for its CET1 ratio to stand between 12.8% and 13.0% at the end of 2025, after reporting 13.6% at the end of March. A higher ratio means that its capital buffer to absorb potential losses is larger.

The lender backed its guidance for 2025 and said it is well on track to meet its 2027 targets. It expects this year's total income to be roughly stable on volume growth and an increase in fee income.

Shares in Amsterdam climbed as much as 5.7% in morning exchanges before pulling back slightly to trade around 17.81 euros. The stock had been underperforming in recent weeks following the tariff announcements but the quarterly figures and guidance reiteration despite rising uncertainty should help it catch up, Citi said in a note to clients.

"We expect investors to focus on potential positive biases given the strong commercial momentum and the steepening of the yield curve," analysts wrote.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

May 02, 2025 05:15 ET (09:15 GMT)

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