Depicting the first signs of its recovery on Wednesday, Dutch financial services companies ING Groep NV returned to profitability, posting a second-quarter net profit of euro71 million as against the monstrous first-quarter net loss of euro793 million.

However, the reported profit figures were not only way less than the euro1.92 billion net profit in the same quarter last year, but were also lower than the analysts' expectations of net profit of euro388 million - particularly after ING having received a euro10 billion Dutch state cash infusion in October 2008, as well as a euro27.7 billion state guarantee on its Alt-A mortgage portfolio in January this year.

ING said that its lower-than-expected second-quarter profit resulted from bank loan losses of euro852 million; along with real estate revaluations, fair value changes on debt, US impairments on mortgage-backed securities, and higher risk costs.

The company, which has raised its year-end cost cuts target by 30 percent - from euro1 billion to euro1.3 billion -, said that it would not be paying an interim dividend largely because of the prevailing market conditions.

In a statement, ING CEO Jan Hommen said: "While we begin to see signs of recovery in financial markets, economic conditions are expected to remain challenging for some time."