AMSTERDAM — ING Group NV said Wednesday that it swung to a third quarter net profit from a loss a year earlier because of improving investment markets, and aims to focus on growth opportunities at its banking business.

Chief Executive Jan Hommen said ING wants to repay the remainder of the EUR10 billion of state aid it has received and concentrate on its growth strategy. It plans to pay back EUR5 billion before the end of the year and repay the remainder "quite early," Hommen said.

ING announced on Oct. 26 that it plans to spin off its insurance and investment arms through a sale or initial public offering.

Hommen said there are plenty of potential buyers for its insurance operations. U.K. insurer Aviva PLC and its Dutch affiliate Delta Lloyd NV have said in recent weeks they are looking at parts of ING's insurance business. "But we... are not in a hurry. In the meantime we will manage both businesses separately," Hommen said.

Third-quarter net profit was EUR499 million, or EUR0.25 per share, in line with a preliminary EUR500 million given Oct. 26, and up from a net loss of EUR478 million a year earlier.

The underlying net result in the third quarter before divestments and special items was EUR778 million, up from an underlying net loss of EUR568 million a year ago and compared with an underlying profit of EUR229 million in the second quarter this year.

Underlying net profit in ING's banking business was EUR264 million, helped by strong interest income, improved financial markets and lower costs, ING said.

At its insurance arm, the underlying net profit was EUR514 million, influenced by favorable markets, ING said.

Shareholder equity increased by 19% to EUR26.5 billion.

ING said it had cut operating expenses by EUR1 billion in the first nine months and expects to hit its EUR1.3 billion target for the full year. It has reduced staff by more than 10,000 to 109,000.

The Core Tier 1 ratio increased to 7.6% from 7.3% at the end of the second quarter and its debt-to-equity ratio improved slightly to 13.1% from 13.5%.

"ING achieved a strong commercial performance in the third quarter, illustrating the strength of our banking and insurance franchises even in this challenging economic environment," CEO Hommen said. He said the decision to fully separate the banking and insurance business was "the right choice at the right time."

The split will enable both the bank and the insurer to adapt more quickly and emerge from the crisis more efficiently, Hommen said.

Theodoor Gilissen analyst Paul Beijsens said results at ING's retail bank and ING Direct were strong. He said that the insurance arm, with equal regional spread between Benelux, the U.S. and emerging markets, will be interesting for potential acquirers, but that an initial public offering is a good option too. He has a hold rating and EUR10 price target on ING stock.

ING's earnings were in line with preliminary figures, Petercam analyst Dirk Peeters said. He added that earnings in ING's bank activities were resilient and the performance of its insurance activities "decent." Peeters has a reduce rating and EUR8 target price on ING.

At 1015 GMT, ING shares were up EUR0.44, or 4.6% at EUR9.99, compared with a 1.8% higher AEX.

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