May 10 (Reuters) - ING Groep (INGA.AS), the largest Dutch bank, reported better than expected first-quarter profit on Thursday, helped by rising interest rates and modest risk costs.
It also announced the launch of a new share buyback programme of up to 1.5 billion euros ($1.65 billion).
Lenders' margins are benefiting from rising interest rates after major central banks ramped up interest rates at the fastest pace in at least two decades in 2022 to tackle inflation.
"During this quarter, marked by turbulent market conditions, clients continued to put their trust in us. This was evidenced by our stable and diversified deposit base, which grew by 1.3 billion euros in the quarter," CEO Steven van Rijswijk said in a statement.
The company's CET1 ratio, a measure of solvency for European banks, rose 0.3 percentage points from the previous quarter to 14.8%, above the current requirement of 10.73%.
The bank's net additions to loan loss provisions - money set aside for failing loans - totalled 152 million euros in the quarter, which the group said was "well below the through-the-cycle average".
ING also registered a 118 million euro net release of provisions for its Russia-related portfolio due to a further reduction of its exposure.
"We do not see a future for ourselves in Russia," van Rijswijk said in a call with journalists.
The group, which serves around 37 million customers, corporate clients and financial institutions in more than 40 countries, said its net profit jumped to 1.59 billion euros in the first quarter, beating the 1.11 billion euros expected by analysts polled by the company.
ING had recorded a profit of 429 million euros in the same period last year, impacted by 834 million euros in risk costs linked to Russia-related exposure.