ING, the Netherlands's largest bank by assets, reported a 39 per cent fall in net income to €788 million ($1.05 billion) for the second quarter of 2013, down from €1.29 billion in the same period a year ago. 

The firm said that much of the loss was caused by hedging losses and rising loan loss provisions at its insurance businesses in the US and Japan.

Group underlying net profit was €942 million, up from €800 million in the first quarter of 2013, but down €1.11 billion in from the second quarter of 2012.

Underlying pre-tax profit for the banking unit rose 13.5 per cent from the end of the second quarter in 2012 to €1.15 billion, but was down 1.9 per cent from the first three months of 2013.

Pre-tax profit was €1.29 billion, down 1.3 per cent from €1.31 billion the previous year.

The investment management arm posted a second-quarter operating result of €27 million, up from €11 million in the second quarter of 2012 and €14 million in the first quarter of 2013, fuelled by an increase in fees and premium-based revenues.

ING Bank’s core Tier 1 ratio declined to 11.8 per cent from 12.3 per cent, mainly as result of the €1.8 billion of dividends paid, which was only partially compensated by the quarterly net profit.