Ing Groep N.v. · EURONEXT:INGA

Ing Groep — ING Group — Q3 2017 Earnings Presentation

29 slides from Ing Groep's earnings presentation, Nov 2, 2017

  1. Slide 1: Third quarter 2017 Results

    Third quarter 2017 Results ING Group 3Q17 net profit of EUR 1,376 million Ralph Hamers, CEO ING Group Amsterdam • 2 November 2017

  2. Slide 2: Key points

    Key points • ING posted 3Q17 net profit of EUR 1,376 mln • Primary customers increased to 10.5 mln with most countries contributing to the quarterly growth • We recorded net core lending growth of EUR 8.0 bln in the quarter; net interest margin remains resilient • Our geographic footprint and produc

  3. Slide 3: Primary customers drive cross-buy in an ever more mobile world

    Primary customers drive cross-buy in an ever more mobile world Primary customer growth on target (in mln)* Share of mobile contacts growing fast Based on all ING retail contacts per channel > 14 9.9 10.5 47% 39% 8.4 9.2 57% 50% 48% 51% 59% 40% 2014 2015 2016 3Q17 Ambition 4Q14 4Q15 4Q16 2Q17** 2020

  4. Slide 4: Accelerating our cooperation with fintechs

    Accelerating our cooperation with fintechs ING Ventures launched Robo advice partnership • ING announced ING Ventures, a EUR 300 mln fund to accelerate the pace of innovation as well as manage our fintech partnerships (currently ~115) • Over the next four years, the fund will focus on start-ups and

  5. Slide 5: Preparing our businesses for the world of tomorrow

    Preparing our businesses for the world of tomorrow Material passport for buildings Sustainability recognition ING has joined with Scored 89 out of 100 by DJSI; Madaster, a platform ING included in the DJSI World that’s devised digital Index and Europe Index for “material passports” for banks office

  6. Slide 6: Strong results delivered 11% underlying return on equity

    Strong results delivered 11% underlying return on equity Underlying net result improved further (in EUR mln) Underlying return on equity reached 11% 11.0% 10.1% CAGR +20.6% 8.6% 4,976 +10.1% 4,219 7.2% 3,957 3,424 3,595 14.2% 14.5% 12.7% 10.5% 2014 2015 2016 9M16 9M17 2014 2015 2016 9M17 Underlying

  7. Slide 7: Healthy income progression on higher NII and commissions…

    Healthy income progression on higher NII and commissions… Underlying income Net interest result excl. FM Commission income (in EUR bln) (in EUR bln) (in EUR bln) CAGR +6.8% 17.5 +2.6% CAGR +4.8% 16.6 15.3 12.8 +4.0% 11.6 12.2 13.0 13.3 9.6 9.9 CAGR +3.1% +12.0% 2.3 2.3 2.4 2.0 1.8 2014 2015 2016 9M1

  8. Slide 8: …as well as a relatively stable expense base and low risk costs

    …as well as a relatively stable expense base and low risk costs Underlying operating expenses Risk costs (in EUR bln) (in EUR bln and bps of average RWA) Underlying cost/income ratio** 58.7% 55 55.9% 44 54.2% 53.8% 8.6 56.0% 8.2 8.5 31 6.5 6.6 21 52.1% 1.6 1.3 1.0 49.3% 0.5 49.1% 2014 2015 2016 9M16

  9. Slide 9: 3Q17 results

    3Q17 results 9

  10. Slide 10: Strong third-quarter results underpinned by resilient NII

    Strong third-quarter results underpinned by resilient NII Underlying pre-tax result (in EUR mln) Net interest income excl. Financial Markets (in EUR mln) +6.2% +1.4%* 1,955 1,992 1,995 3,383 1,878 3,294 1,652 3,247 3,235 3,263 91 3,292 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Impact ending

  11. Slide 11: Net interest margin up from 2Q17 due to accounting

    Net interest margin up from 2Q17 due to accounting Net interest margin up quarter-on-quarter… (in bps) …but move largely explained by technicalities 157 +2 157 155 +4 152 152 152 151 150 152 152 151 153 3Q16 4Q16 1Q17 2Q17 3Q17 2Q17 Impact ending Financial 3Q17 some hedge Markets NIM NIM (4-quarter

  12. Slide 12: Core lending grew by EUR 8.0 bln in 3Q17

    Core lending grew by EUR 8.0 bln in 3Q17 Customer lending ING Group 3Q17 (in EUR bln) Core lending businesses: EUR 8.0 bln 4.1 -0.3 -1.4 -1.7 -4.0 2.2 0.9 567.4 -0.4 0.8 0.7 568.3 30/06/17 Retail Retail Retail Retail WB Industry WB General WB Other* Lease run- Bank FX / 30/09/17 NL Belgium Germany O

  13. Slide 13: Efficiency gains through balance sheet optimisation in C&GM

    Efficiency gains through balance sheet optimisation in C&GM Core lending and net customer deposit growth (in EUR bln) Balance sheet optimisation Challengers & Growth Markets Challengers & Growth Markets (based on external assets) -6pp 27% -5pp 22% 33% 2.3 7.4 1.8 2.8 17% 20% 11% 2.5 1.2 11% 13% 12%

  14. Slide 14: Bank-wide focus on commission income pays off

    Bank-wide focus on commission income pays off Solid commission income across segments (in EUR mln) Initiatives to drive fee income growth • Acceleration of Consumer Lending 714 682 Lending 643 • Volume growth in SME/MidCorp 605 611 fees • Wholesale Banking growth in Industry 280 297 244 235 252 Lend

  15. Slide 15: Operating expenses down quarter-on-quarter

    Operating expenses down quarter-on-quarter Underlying operating expenses (in EUR mln) Regulatory costs experience seasonality (in EUR mln) 496 474 209 2,155 2,159 2,137 2,242 2,195 75 69 94 65 3Q16 4Q16 1Q17 2Q17 3Q17 1Q 2Q 3Q 4Q Expenses excl. regulatory costs Regulatory costs 2016 2017 • Compared

  16. Slide 16: Risk costs down in 3Q17; NPLs remain favourably low

    Risk costs down in 3Q17; NPLs remain favourably low Risk costs (in EUR mln) NPL ratio 265 229 2.4% 2.4% 2.4% 2.3% 2.3% 97 2.2% 138 135 124 2.1% 2.1% 133 2.0% 2.0% 74 31 46 35 2.1% 42 45 2.0% 51 68 71 1.9% 1.9% 36 36 1.8% 43 29 13 28 17 12 -22 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Wholesa

  17. Slide 17: ING's capital position a strong foundation for the future

    ING’s capital position a strong foundation for the future ING Group 3Q17 fully loaded capital ratios* 3.6% 19.8% 1.7% 14.5% 0.2% -0.2% 14.5% 2Q17 CET1 ratio Net profit** RWA/Other 3Q17 CET1 ratio Additional Tier 1 Tier 2 3Q17 Total capital ratio • ING Group’s 3Q17 fully loaded CET1 ratio was stable

  18. Slide 18: Ambition 2020 – ING Group Financial Targets

    Ambition 2020 – ING Group Financial Targets Actual 2016 Actual 9M17 Ambition 2020* • CET1 ratio (%) 14.2% 14.5% > Prevailing fully loaded requirements** Capital • Leverage ratio (%) 4.8% 4.5% > 4% • Underlying C/I ratio (%)*** 54.2% 53.8% 50-52% Profitability • Underlying ROE (%)*** 10.1% 11.0% Awai

  19. Slide 19: Wrap up

    Wrap up 19

  20. Slide 20: Wrap up

    Wrap up • ING posted 3Q17 net profit of EUR 1,376 mln • Primary customers increased to 10.5 mln with most countries contributing to the quarterly growth • We recorded net core lending growth of EUR 8.0 bln in the quarter; net interest margin remains resilient • Our geographic footprint and product d

  21. Slide 21: Appendix

    Appendix 21

  22. Slide 22: Strong 3Q17 result; volatile items broadly neutral in the quarter

    Strong 3Q17 result; volatile items broadly neutral in the quarter Underlying pre-tax result Volatile items and regulatory costs Pre-tax result excl. volatile items (in EUR mln) (in EUR mln) and regulatory costs (in EUR mln) 3Q16 4Q16 1Q17 2Q17 3Q17 2,125 1,955 1,992 1,995 2,036 2,090 1,878 1,919 1,9

  23. Slide 23: Retail and Wholesale Banking show resilient performance

    Retail and Wholesale Banking show resilient performance Underlying pre-tax result Retail Banking (in EUR mln) Underlying pre-tax result Wholesale Banking (in EUR mln) 67 61 80 110 91 384 99 7 13 1,288 1,249 1,327 1,348 813 748 778 698 972 638 -2 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Repo

  24. Slide 24: Group CET1 ratio at 14.5% and Group ROE at 11.0%

    Group CET1 ratio at 14.5% and Group ROE at 11.0% Group fully loaded CET1 ratio development during 3Q17 Changes to Group ROE calculation in 3Q17 (amounts in EUR bln and %) (in EUR mln) Capital RWA Ratio Change As of 30 September 2017 Actuals June 2017 44.9 310.3 14.5% IFRS-EU shareholders’ equity 49,

  25. Slide 25: Further client savings rate adjustments in our home markets

    Further client savings rate adjustments in our home markets Few more savings rate adjustments in the quarter… …and we have several other levers to stabilise NIM • In 3Q17, we reduced Dutch savings rates by 5 bps after • Continue growth in higher margin lending without earlier adjustments in the firs

  26. Slide 26: Lending credit outstandings are well-diversified

    Lending credit outstandings are well-diversified ING Group* Retail Banking* Wholesale Banking* 6% 5% 1% 15% 29% 16% 36% EUR EUR EUR 42% 4% 635 408 228 bln 64% bln bln 17% 8% 22% 9% 12% 14% Retail Banking Mortgages Netherlands Structured Finance Wholesale Banking Other lending Netherlands Real Estate

  27. Slide 27: Wholesale Banking lending credit outstandings well-diversified by geography and sector

    Wholesale Banking lending credit outstandings well-diversified by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (3Q17)* Lending Credit O/S Wholesale Banking (3Q17)* 1% NL 7% 3% 4% Builders & Contractors 13% 5% 19% Belux

  28. Slide 28: Detailed NPL disclosure on selected lending portfolios

    Detailed NPL disclosure on selected lending portfolios Selected lending portfolios Lending credit NPL ratio Lending credit NPL ratio Lending credit NPL ratio O/S 3Q17 3Q17 O/S 2Q17 2Q17 O/S 3Q16 3Q16 Wholesale Banking 227,714 2.3% 225,566 2.4% 215,779 2.4% Industry Lending 127,232 2.6% 127,907 2.6%

  29. Slide 29: Important legal information

    Important legal information Projects may be subject to regulatory approvals. 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 descri

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