By Jakob Van Calster and Mateusz Rabiega
(Reuters) -Dutch bank ING Groep on Thursday said it does not expect its annual total income to grow in 2025, as the European Central Bank continues to cut interest rates on concerns of a muted economy.
The ECB cut its deposit rate by 25 basis points to 2.75% last week as euro zone inflation continued to ease, bringing an end to steadily high borrowing costs supporting bank profits in Europe.
“We anticipate revenue at the same level as last year, so 22.6 billion (euros)”, ING CEO Steven van Rijswijk said, adding that the bank expects to compensate the hit to net interest income (NII) by raising fees and repricing deposits.
The bank, which serves around 40 million customers in more than 40 countries, expects fee income to grow by 5% to 10% in 2025, after an 11% jump to 4 billion euros ($4.15 billion) last year, while NII slumped by nearly one billion euros.
ING outlined that the annual guidance did not include the impact from recent Russian business sale, which is expected to put a 700 million euro dent in its post-tax profits.
It also expects rising total expenses of between 12.5 and 12.7 billion euros.
The group reported lower-than-expected fourth-quarter profit, weighed by higher operating expenses and loan loss provisions.
“We expect single-digit downgrades for consensus EPS (earnings-per-share) for the full year of 2025, driven by the higher cost guidance”, said J.P. Morgan analysts.
ING’s net profit slumped almost 26% from a year ago to 1.15 billion euros in October-December, missing the median expectation of 1.22 billion euros in a company-compiled poll.
The bank reported annual total income of 22.62 billion euros, beating its target of over 22.5 billion euros.
ING said it will propose a final cash dividend of 0.71 euro per share.
($1 = 0.9629 euros)
(Reporting by Mateusz Rabiega and Jakob Van Calster in Gdansk; Additional reporting by Gianluca Lo Nostro;Editing by Varun H K)
