Even so, results in the first quarter were pretty good. Pre-tax profits rose by nearly 29%, and per-share profits climbed by nearly 65%. Although the company's profits are split pretty closely to 50/50 between banking and insurance, insurance grew at a considerably greater rate in the first quarter.
Pre-tax profits in the insurance business climbed by more than 44%, with an even greater escalation in the company's Asia-Pacific operations. In addition to strong growth in life insurance operations, ING saw improved underwriting results across the board and improved profitability within the business.
Though not quite as strong, banking was far from a slouch -- it grew by 18.3%. While wholesale banking, at 9.7% growth, lagged the overall rate, the Amsterdam-based ING Direct business continues to grow strongly. It added 1 million customers and posted pre-tax earnings growth of nearly 63%.
Despite results that beat estimates pretty handily, management was cautious about the future. The banking arm has to deal with a flattening yield curve and disappointing economic growth in Europe. On the insurance side, management believes that market conditions are deteriorating, and provisions will likely have to increase as the year goes on. While growth from emerging markets looks to stay robust, profitability will get hurt if those provisions go up as management expects.
ING is a little bit challenging to evaluate. While many companies engage in both banking and insurance, most tend to rely meaningfully more on one than the other.
In any case, ING looks cheap at a P/E below around 7 until you look back and see that ING has traded around this level for a few years now. On a more positive note, ING boasts margins, capital returns, and a yield better than virtually all of its peers.
Business might be getting a bit tougher for ING in the short run, but the company has a great record of improving its operations and growing around the world. Assuming that growth continues, patient long-term investors should be happy with what they see over time.
For more on the banking and insurance space:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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