Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (November 2021)
42 slides from Ing Groep's debt investor presentation, Nov 4, 2021
Slide 1: ING Credit Update 3Q2021
ING Credit Update 3Q2021 ING Investor Relations 4 November 2021
Slide 2: Key points
Key points ▪ Focus on climate action continues to accelerate and we actively engage with companies to finance the investments needed for the transition to a low-carbon economy ▪ Strong pre-provision result, supported by continued strong fee income, higher lending margins and negative interest rate c
Slide 3: A sustainability leader supporting our clients in the transition
A sustainability leader supporting our clients in the transition We published our integrated climate report We support our clients in the transition to a low-carbon economy ▪ The 2021 climate report integrates our progress on climate alignment of our loan book and climate risk management €1.35 bln G
Slide 4: Strong pre-provision result reflecting continued fee growth
Strong pre-provision result reflecting continued fee growth Pre-provision result excl. volatile items* and regulatory costs ▪ As both income and costs improved, this quarter’s (in € mln) pre-provision result excluding volatile items and regulatory costs increased ~10% both YoY and QoQ 2,215 ▪ 3Q2021
Slide 5: The quality of our loan book is strong
The quality of our loan book is strong Risk costs compared to peers* (in bps of customer lending) ▪ In 3Q2021 we released €96 mln of management overlays applied in previous quarters, reflecting a recovery of 263 247 economic activity, robust GDP forecasts and improved risk 210 indicators on our loan
Slide 6: Business profile
Business profile 6
Slide 7: Well-diversified business mix with many profitable growth drivers
Well-diversified business mix with many profitable growth drivers Retail Banking Market Leaders Wholesale Banking Netherlands, ▪ Focus on earning the Belgium, Luxembourg ▪ Our business model is primary relationship similar throughout our ▪ We use technology to offer global WB franchise a differentia
Slide 8: 3Q2021 results
3Q2021 results 8
Slide 9: Income supported by continued strong fee income
Income supported by continued strong fee income Income (in € mln) ▪ Total income YoY included another strong quarter for fee income 4,702 4,648 ▪ Fee income was up for all products, with daily banking as 4,517 4,286 296 the main driver 4,169 39 312 304 120 74 103 6 48 10 ▪ NII included a €84 mln TLT
Slide 10: Resilient NII; 4-quarter rolling average NIM stable at 140 bps
Resilient NII; 4-quarter rolling average NIM stable at 140 bps Net interest income (in € mln) Net Interest Margin (in bps) 3,513 3,344 3,340 3,388 3,329 233 84 148 83 144 146 140 140 138 141 142 136 138 3,280 3,257 3,304 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 NIM NIM (
Slide 11: Sustained mortgage growth, higher repayments in WB
Sustained mortgage growth, higher repayments in WB Customer lending 3Q2021 (in € bln) Core lending businesses: €3.1 bln 2.2 2.5 -2.5 1.0 -0.1 -0.3 -0.2 0.2 619.2 616.3 0.1 -0.1 2Q2021 Retail NL Retail Retail Retail Other WB Lending WB Daily WB Other* Lease / WUB Treasury FX / Other** 3Q2021 Belgium
Slide 12: Fee income strong
Fee income strong Net fee & commission income per business line (in € mln) Net fee & commission income per product category (in € mln) 854 855 882 854 855 882 734 771 734 771 113 130 105 278 302 295 94 255 99 247 253 233 284 248 203 278 232 247 206 235 220 253 221 198 219 273 281 295 322 338 246 257
Slide 13: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Expenses included €233 mln of incidental items, reflecting a €180 mln provision for compensation to retail customers on certain Dutch consumer credit products and €53 mln for an 331 587 impairment and redundancy costs. This compares to €140 111
Slide 14: Risk costs remain well below the through-the-cycle average
Risk costs remain well below the through-the-cycle average Risk costs per business line (in € mln) Stage 2 ratio Stage 3 ratio 469 8.6% 7.6% 145 7.6% 7.0% 7.0% 6.7% 208 223 6.0% 1.7% 1.8% 1.8% 1.8% 1.7% 140 30 7.0% 6.7% 6.6% 193 85 39 6.1% 1.7% 1.7% 1.6% 6.4% 5.6% 1.5% 1.5% 184 -91 19 5.8% 1.6% 1.4%
Slide 15: ING Group financial ambitions
ING Group financial ambitions Actual 2020 Actual 3Q2021 Financial ambitions ~12.5%* Capital ▪ CET1 ratio (%) 15.5% 15.8% (Basel IV) ▪ ROE (%)** 4.8% 8.8% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 63.2% 61.9% 50-52% Distribution ▪ Distribution (per share) €0.12*** 50% pay-out ratio****
Slide 16: Capital
Capital 16
Slide 17: Total risk-weighted assets increased in 3Q2021
Total risk-weighted assets increased in 3Q2021, mainly reflecting ongoing redevelopments of internal models and EBA guidelines ING Group risk-weighted assets development (in € bln) Credit RWA +€4.3 bln 11.0 -2.0 -0.6 -1.8 310.5 308.6 0.8 -1.2 -4.3 2Q2021 FX Volume Overall profile of Models, Other Ma
Slide 18: Strong ING Group CET1 ratio at 15.8%, excluding €2,840 mln profit reserved for distribution
Strong ING Group CET1 ratio at 15.8%, excluding €2,840 mln profit reserved for distribution ING Group Total capital ratio development (in %) +2.6% 20.6% +2.2% 15.7% +0.2% -0.0% -0.1% 15.8% ~12.5% 10.5% 2Q2021 Profit added Other capital RWA 3Q2021 AT1 Tier 2 3Q2021 Total Basel IV CET1 CET1 ratio to C
Slide 19: Buffer to Maximum Distributable Amount remained strong at ~5%
Buffer to Maximum Distributable Amount remained strong at ~5% ING Group fully-loaded SREP ▪ ING Group’s fully-loaded CET1 requirement is 10.52% ▪ 4.50% Pillar 1 Requirement (P1R) MDA ▪ 0.98% Pillar 2 Requirement (P2R) restriction MDA level ▪ 2.50% Capital Conservation Buffer (CCB) restriction (14.79
Slide 20: Funding & liquidity
Funding & liquidity 20
Slide 21: Issuance entities under our approach to resolution
Issuance entities under our approach to resolution Issuance entities Eligible instruments for TLAC/MREL Designated TLAC MREL resolution ING Groep N.V. entity ▪ Own funds (CET1 / AT1 / Tier 2) ✓ ✓ ▪ Senior unsecured debt (> 1 year) ✓ ✓ ▪ Own funds ✓ ✓ ING Bank N.V. ▪ Senior unsecured debt (> 1 year)
Slide 22: ING meets its TLAC and the new intermediary MREL requirements
ING meets its TLAC and the new intermediary MREL requirements TLAC as % of RWA (and LR) MREL as % of RWA (and LR) 29.61% 29.63% 27.32% 27.88% 0.12% 0.14% 23.03% 5.04% 8.86% 21.03% 8.86% 5.03% 2.64% 5.03% 2.64% 2.16% 5.03% 2.16% 22.29% 22.84% 15.83% 16.00% 18.00% 15.83% 3Q2021 Requirement 3Q2021 Requ
Slide 23: Long-term debt maturity ladder and issuance activity year-to-date 3Q2021
Long-term debt maturity ladder and issuance activity year-to-date 3Q2021 Long-term debt maturity ladder (in € bln)* 12 10 8 6 4 2 0 Redemptions Issuance 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2030 YTD 3Q21 YTD 3Q21 Covered Bank Senior HoldCo Tier 2 AT1 Issuance activity in 3Q2021 ▪ Total
Slide 24: ING's debt issuance programme in 2021
ING’s debt issuance programme in 2021 Group / Bank issuance plan Currency split Senior debt issuance HoldCo Senior ▪ Outstanding HoldCo Senior of ~€32 bln mainly in EUR and USD 15% ▪ Guidance on Holdco Senior issuances for 2021 remains ~€5-7 bln, subject to balance sheet developments and Covid-19 re
Slide 25: Other subsidiaries remain active mainly through their covered bond programmes
Other subsidiaries remain active mainly through their covered bond programmes ING Bank N.V. ING Belgium S.A./N.V. ING Bank (Australia) Ltd ING DiBa AG ING Bank Hipoteczny Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured
Slide 26: We issue green bonds to support meeting our sustainability objectives
We issue green bonds to support meeting our sustainability objectives ING’s Green Bond Programme Green Covered Bonds ▪ ING’s Green Bond Framework is aligned with the ICMA Green ▪ As part of our Green Bond Programme, we aim to issue Bond Principles and a Second Party Opinion (SPO) has been covered bo
Slide 27: Strong and conservative balance sheet with customer deposits as the primary source of funding
Strong and conservative balance sheet with customer deposits as the primary source of funding Balance sheet ING Group (in € bln) Well-diversified customer loan book ▪ Balance sheet ING Group increased to €989 bln in 3Q2021 ▪ See “Asset Quality” section of this presentation Assets Liabilities 978 989
Slide 28: Robust liquidity position with a 12-month moving average LCR of 142%
Robust liquidity position with a 12-month moving average LCR of 142% Funding mix* ING maintains a sizeable liquidity buffer 30 September 2021 ▪ ING’s funding consists mainly of retail deposits, corporate 3% 2% deposits and public debt 8% Customer deposits (retail) Customer deposits (corporate)** ▪ I
Slide 29: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING as of 3 November 2021 Latest rating actions on ING Group and Bank S&P Moody’s Fitch ▪ Fitch: ING Bank was upgraded to AA- in February 2019. In Stand-alone rating a baa1 a+ October 2020, Fitch affirmed ING Group’s and ING
Slide 30: Asset quality
Asset quality 30
Slide 31: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 3Q2021 3Q2021 3Q2021 7% 13% 22% 24% 37% 15% 19% €796 €501 7% €501 2% €296 bln bln bln bln 10% 52% 5% 17% 8% 63% 63% 22% 14% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholes
Slide 32: Our lending book is senior and well-collateralised
Our lending book is senior and well-collateralised Residential ▪ Average LTV of 55% with low Stage 3 ratio at 1.2% Mortgages ▪ Risk metrics remained strong €314 bln 8% Consumer Lending ▪ Relatively small book, risk metrics slightly improved 40% €26 bln €796 37% bln ▪ Limited exposure to most vulnera
Slide 33: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 45 144 428 30 -30 -40 1 -168 169 63 15 2 3 7 -46 -7 56 290 -32 -43 36 -235 -201 8 300 237 -25 -42 -95 -83 124 189 -110 173 -159 169 135 -125 166 177 -73 127 54 68 3Q2020 4Q2020 1Q20
Slide 34: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (3Q2021)* Lending Credit O/S Wholesale Banking (3Q2021)* 1% NL 1% 11% Real Estate, Infra & Construction 13% 26% Belux Commodities, Food & Agri 23% 2% Germany TMT & Healt
Slide 35: Appendix
Appendix 35
Slide 36: Comfortable buffer to Additional Tier 1 trigger
Comfortable buffer to Additional Tier 1 trigger Buffer to AT1 trigger (in € bln) ING Group available distributable items (in € mln)** 30 September 2021 2020 49.2 Share premium 17,089 Other reserves 32,784 Legal and statutory reserves 2,334 €27.4 bln 8.8%* Non-distributable -9,831 Total 42,376 21.7 A
Slide 37: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Outstanding (mln)** Reset spread USD* Sep-21 May-27 3.875% 1,000 UST + 286bps USD* Sep-21 May-31 4.250% 1,000 UST + 286bps USD Feb-20 May-29 4.875% 750 UST + 351bps USD*
Slide 38: HoldCo Senior transactions in past 12 months
HoldCo Senior transactions in past 12 months HoldCo Senior Unsecured, EUR issuances ISIN Issue date First call date Maturity Tenor Coupon Currency Issued (€ mln) Spread XS2390506546 Sep-21 Sep-27 Sep-28 7NC6 0.38% EUR 1,500 m/s + 70 XS2281155254 Jan-21 Feb-29 Feb-30 9NC8 0.25% EUR 1,500 m/s + 70 XS2
Slide 39: ING Bank's covered bond programme…
ING Bank’s covered bond programme… ▪ ING Bank NV €30 bln Hard and Soft Bullet Covered Bonds programme Redemption type* ▪ UCITS, CRR and ECBC Label compliant. Rated Aaa/AAA/AAA (Moody’s/S&P/Fitch) 3% 3% Interest Only 5% Investment ▪ This programme is used for external issuance purposes. There is a se
Slide 40: …benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, which seems unaffected by the economic uncertainty in the last year Dutch Purchasing Managers Index (PMI) was 62.0 as per end- 3Q2021, indicating robust industrial growth Dutch unemployment rates (%) decreased since August 2020 70 15 60 10 50 5
Slide 41: Volatile items 3Q2021
Volatile items 3Q2021 Volatile items and regulatory costs (in € mln) 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 WB/FM – valuation adjustments 91 -13 11 11 38 Capital gains/losses 6 3 36 -2 6 Hedge ineffectiveness 43 -59 23 11 7 Other items income* -230 0 233 155 50 Total volatile items – income -90 -69 303
Slide 42: Important legal information
Important legal information ING Group’s annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS-EU’). In preparing the financial information in this document, except as described otherwise, the same accounting principles are
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