(Adds analyst, chairman comments, detail)

AMSTERDAM, May 11 (Reuters) - Dutch financial services group ING Group NV reported a forecast-beating 3.3 percent rise in first-quarter net profit, driven by strong growth in retail banking, insurance in Asia and mortgages in the Netherlands.

Shares in ING (ING.AS: Quote, Profile, Research) rose 1.6 percent after the bancassurer reported net income of 2.01 billion euros ($2.6 billion) for the first three months of 2006, up from 1.94 billion a year earlier, which included a one-off gain of nearly 400 million euros.

The net result was above the average forecast in a Reuters poll of analysts and also beat the highest forecast in the poll for a first quarter profit of 1.97 billion euros.

Excluding divestments and other charges, ING's profit rose 29 percent to 1.98 billion euros, reflecting higher rates of return on capital and from its new life insurance business.

"We are pretty satisfied with the strong growth in the underlying business during the first quarter," ING Chairman Michel Tilmant said on a conference call.

One of the top five insurers in Europe, ING is known for its insurance network and ING Direct retail banking products, which are part of a broader strategy to boost its insurance business and offer banking services over the Internet.

Because of its strong financial position, ING has been considered a likely buyer for other European banks, but Tilmant said ING remained wary of making large acquisitions.

Insurance profit, excluding taxes and charges, rose 22 percent to 1.2 billion euros, while banking profit on the same basis rose 24 percent to 1.47 billion euros.

"This was a strong set of figures," said Petercam analyst Tom Gietman in a client note.

READY TO POUNCE?

Responding to reports that ING was on the hunt for acquisitions, Tilmant said that the company was well-positioned for growth in its direct banking business, retirement services for an ageing population and the shift of wealth from Western to Eastern economies.

"We are not particularly interested in making large acquisitions with high goodwill," Tilmant told reporters, but added: "We are interested in making small acquisitions."

ING's main Dutch rivals have all reported healthy results for the first quarter. ABN AMRO's (AAH.AS: Quote, Profile, Research) net profit rose 12 percent to 1 billion euros, insurer Aegon NV (AEGN.AS: Quote, Profile, Research) beat expectations with net income of 630 million euros.

SNS REAAL, another Dutch bancassurer, is set to go public on May 18 to raise funds for buying smaller insurance companies in the fragmented Dutch insurance market.

ING's stock has risen 8 percent since its last earnings announcement to just below one-year highs, and was trading at 33.68 euros, up 1.6 percent, at 0815 GMT.

ING is trading at around 11 times projected 2006 earnings, on par with rivals AXA (AXAF.PA: Quote, Profile, Research) and Aegon and just above ABN AMRO's forward price-earnings multiple of 10, according to Reuters Estimates.

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By Reed Stevenson 

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