By Diana Mandia and Matteo Allievi
(Reuters) -ING Groep, the largest Dutch bank, on Thursday announced its second share buyback programme of the year, of up to 2.5 billion euros ($2.65 billion), following third-quarter net profits that more than doubled from the previous year.
However shares were down as much as 4.8% in morning trading, with some brokers pointing to a poor beat in third-quarter income estimates. By 0938 GMT they were 2.7% lower.
"It seems that investors are looking at the 'low' quality of the beat in income estimates, which was driven by other income and very low risk costs", Rodger Rinke from Landesbank Baden-Wuerttemberg said.
Net interest income (NII), a key measure of earnings on loans minus deposit costs, was also lower than expected, he said.
The bank's net profit more than doubled to 1.98 billion euros between July and September, beating a 1.83 billion euro company-compiled consensus forecast, but NII reached 4.03 billion euros in the quarter, below 4.12 billion euros expected.
ING, which serves more than 38 million customers, also said it remains vigilant as global economic growth is slowing.
Banks have been some of the main beneficiaries of rising interest rates over the past two years, but central banks seem now to be at the end of this cycle of monetary tightening.
Net additions to loan loss provisions amounted to 183 million euros, below the 322 million euros expected in the company-compiled consensus, partially due to what Chief Risk Officer Ljiljana Cortan described as "successful de-risking from Russia".
The company's common equity tier-one capital (CET1) ratio, the measure of solvency for European banks, rose to 15.2% in the quarter, the group said, adding it targeted a ratio of around 12.5%, above the requirement of 10.98%.
"It remains unclear how the bank wants to reach its 12.5% CET1 target. There is still more than 9 billion euros in excess capital and the management has to outline the path to their goal," Rodger Rinke said.
($1 = 0.9437 euros)
(Reporting by Diana Mandiá and Matteo Allievi; Editing by Kim Coghill, Robert Birsel and Jan Harvey)