ING to book goodwill impairment in second quarter
ING to book goodwill impairment in second quarter
ING announced today that as a result of the impairment test triggered by the Covid-19 pandemic, it expects to book approximately €300 million as an impairment on the goodwill on its balance sheet in its second quarter 2020 results. The goodwill is related to a number of acquisitions in the past.
In accordance with accounting standard IAS 36, the impairment announced today follows the negative developments in the macro-economic outlook for the relevant business units in the context of the Covid-19 pandemic. In addition, the applicable discount rate is also affected by the deteriorated economic and risk environment.
The goodwill impairment is estimated to be approximately €300 million, to be recorded under operating expenses in ING’s second quarter profit & loss statement. The accounting adjustment does not involve any cash outflow and will not impact ING’s capital ratios, as goodwill is already deducted from regulatory capital.
ING will report its full results for the second quarter of 2020 on 6 August 2020. As indicated earlier, the economic impact of the Covid-19 pandemic and the impact of IFRS-9 methodology will result in risk costs significantly above the through-the-cycle average, which will impact ING’s net profit for the quarter.
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| Raymond Vermeulen | ING Group Investor Relations | |
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