* Q3 underlying profit 1.5 bln euros vs forecast 1.43 bln
* Helped by lower provisions on bad loans
* Researching online Chinese banking JV with local partner (Recasts with plans in China, management comments, shares)
By Toby Sterling
AMSTERDAM, Nov 4 (Reuters) - ING, the largest Dutch financial services company, said on Wednesday it was researching an online banking joint venture in China, as it posted quarterly results boosted by an economic recovery in the Netherlands and strong growth in Germany.
ING reported third-quarter underlying pretax profit of 1.50 billion euros ($1.64 billion), compared with 1.49 billion euros in the same period last year, beating analysts’ mean forecast.
The figures, and an upbeat outlook, came as many leading European-based banks, including Deutsche Bank, Credit Suisse and Standard Chartered are shedding thousands of jobs and reorienting their businesses to meet stricter capital requirements.
Morgan Stanley analysts, who have an “overweight” rating on ING shares, said the numbers were better than expected thanks to falling provisions on bad loans. They dipped to 261 million euros from 322 million euros.
ING stock was the best performer on the Amsterdam stock exchange, rising more than 4 percent. They are up 26 percent year to date.
CEO Ralph Hamers said the bank was considering entering the Chinese online banking market with local partner Bank of Beijing, and was in the preliminary stages of researching the option.
Hamers said he believed the Chinese stock market had stabilized and measures taken by the government would “help economic recovery by the end of this year.”
Chief risk officer Wilfred Nagel said Chinese loan default rates, though they had risen, were still lower than in Europe. He said the Chinese retail banking sector was an attractive opportunity.
“China adds the size of the GDP of the Netherlands to its economy every year. This is still in absolute terms an economy that grows quite strongly,” he said.
ING’s online banking platform is helping it add 1,000 retail customers per week in Germany.
Nagel said the Chinese discussions were at an early stage and no decisions had yet been taken on timing or ownership.
In the earnings report, ING said it grew its lending portfolio by 1.6 billion euros.
Net interest margin improved slightly quarter-on-quarter to 1.46 percent from 1.45 percent.
“In Europe, sentiment is holding up,” Hamers said. “We see a recovery in bank lending in countries like Belgium and Germany.”
However he said U.S. growth was weakening and the outlook there was uncertain.
($1 = 0.9132 euros)
Additional reporting by Anthony Deutsch; Editing by Muralikumar Anantharaman and Mark Potter