ING Groep Profit Up on Asset Sales

"We expect that the tough markets will continue for retail banking in the first quarter,' he said.

ING also took a €133 million write-down on its holdings of Greek bonds. After selling down its portfolio of bonds issued by Southern European governments throughout the year, ING now holds around €2 billion worth, mostly Italian.

At its insurance division, operating results before one-time charges were up 20 percent to €478 million mostly because of cost-cutting. But the "underlying" result was a loss of €1.35 billion as ING took a €1.1 billion charge to write down the value of its U.S. annuity business—people are living longer than ING had expected, and fewer are allowing their policies to lapse.

The bailed-out ING is trying to get itself back into shape after the Dutch government gave it €10 billion in aid and took over most of its portfolio of mortgage-backed securities in the wake of the 2008 financial crisis.

Hommen said the company is at a loss on how to repay the Dutch state a remaining €3 billion, with a court case ongoing as to whether it must pay a €1.5 billion penalty if it does so.

"We would like to repay a significant amount this year," Hommen said on a conference call with analysts. However, he said the company also had doubts about "what amount can we afford to pay," given new global rules on greater financial buffers for the 29 global financial companies identified as "systemically important." ING is among the 29.

Hommen said the company still has work to do before it can spin off its insurance arm in an initial public offering of shares. The sale has been mandated by the European Commission's competition authority to compensate for the state aid.

"It will be much better to look for an IPO…next year, rather than this year," he said.

The company repeated Thursday it will not pay a dividend until the state aid is repaid and it can meet the new rules on financial buffers.