BRUSSELS (Bloomberg) — ING Groep NV and Fortis, the largest Dutch and Belgian financial-services companies, said third quarter profits declined on lower earnings from banking.Net income at ING slid 16 percent to 1.57 billion euros ($1.97 billion), the Amsterdam-based company said yesterday. Fortis, based in Brussels, said earnings dropped 5.1 percent to 884 million euros. The shares of both companies fell.

At ING, banking profit slid 17 percent as provisions for risky loans rose and increased competition and lower prepayment penalties on mortgages reduced income from consumer banking in the Netherlands, Belgium and Luxembourg, the company said. Fortis’s earnings from banking slumped 11 percent.

“You can definitely see a common factor in today’s earnings,” said Vasco Moreno, the head of European banks research at Keefe, Bruyette & Woods in London. “The third quarter is always a weak season, but there’s also an underlying factor and that is competitive pressures in the Benelux region, particularly with mortgages.”

ING shares fell 4.1 percent to 33.95 euros, the most since May, after profit missed analysts’ estimates. Fortis shares fell 1.5 percent to 32.77 euros in Brussels. The stock has risen 22 percent this year, compared with 16 percent for ING.

Among other European financial companies reporting today, Paris-based Societe Generale said third-quarter profit rose 12 percent, led by its consumer banking business outside France. Aegon NV, the second-largest Dutch insurer, said earnings climbed ten percent on gains from investments.

“Looking forward, low long-term interest rates and flat yield curves will continue to pose challenges,” ING chief executive officer Michel Tilmant said.

Speculation there will be more European Central Bank rate increases drove two-year government bond yields above ten-year yields for the first time in more than six years today. The so-called flat yield curve squeezes banks’ lending margins.

ING’s banking profit slid 17 percent to 750 million euros, while earnings at the insurance division fell 16 percent to 821 million euros because of lower realised capital gains on bonds. Tilmant has sold 15 businesses since 2004 as ING expanded its online banking, US pension and Asian insurance operations.

ING Direct, which added 631,000 customers from June to September, recorded a 2.2 percent decline in pretax profit to 175 million euros.

“Interest rates which are putting margins at the bank under pressure,” said Jan-Willem Nijkamp, a fund manager at Tielkemeijer & Partners.

Fortis CEO Jean-Paul Votron plans to reduce the company’s reliance on its Dutch, Belgium and Luxembourg home markets and expand in banking and insurance in Turkey, Poland and Spain.