ING Canada Inc. has reported a sharp drop in first-quarter net income to $23 million, compared with $126.2 million a year earlier, blaming turbulent weather and stock markets.

The Canadian property and casualty subsidiary of Dutch-based ING Groep NV said today that its January-March operating profit fell to $70.2 million from $112.8 million “as a result of the severe storms that hit Central Canada over the winter months.”

The decline in net income to 19¢ a share, down from 95¢ a year ago, came as the slide in operating profit was aggravated by declines in equity-market returns.

ING Canada, the largest provider of property and casualty insurance in the country with 11% of the market, said premiums written increased by 1.7% from a year earlier to $860.3 million.

“Our commercial insurance profitability improved significantly and our current-year automobile insurance results remained stable despite the difficult driving conditions resulting from the weather conditions in Quebec and Ontario,” stated ING Canada CEO Charles Brindamour.

“However, numerous storms and near-record snowfalls in Central Canada resulted in a loss on our home insurance activities. While the industry’s loss ratios are usually higher during the first quarter, this year’s weather conditions had a more severe impact than usual.”

ING Canada booked an overall investment portfolio market yield of about 5%, but “the decline in equity markets in the quarter caused a higher level of recognized investment losses.”

Meanwhile, parent company ING Groep NV reported a 19% decline in first-quarter profits Wednesday and wrote down the value of its U.S. mortgage-related investments by US$5.6 billion.

However, the writedowns were not booked as a loss because the Dutch bank and insurance company plans to hold on to those investments.

ING said bank earnings were up 1.5% to 1.41 billion euros (US$2.18 billion), while insurance earnings fell 31% to 722 million euros (US$1.11 billion).

Insurance earnings were hurt by the performance of an investment portfolio ING holds to hedge against potential claims, the company said. ING said investment profits fell by 436 million euros (US$673 million).