Ing Groep N.v. · EURONEXT:INGA
Ing Groep — ING Group — Q3 2019 Earnings Presentation
25 slides from Ing Groep's earnings presentation, Oct 31, 2019
Slide 1: Third quarter 2019 results
Third quarter 2019 results ING posts 3Q2019 net result of €1,344 mln Ralph Hamers, CEO ING Amsterdam • 31 October 2019
Slide 2: Key points
Key points • ING posted 3Q2019 net profit of €1,344 mln • Primary customers increased by 165,000 to 13.1 mln, representing more than one-third of our Retail customer base • Net core lending growth in Retail was €3.6 bln • In Wholesale Banking net core lending decreased by €4.6 bln, with volumes affe
Slide 3: Commercial momentum remained strong in Retail
Commercial momentum remained strong in Retail Target to reach >16.5 mln primary customers* by 2022 Net promoter scores (NPS) 3Q2019 29.2% 30.5% 32.8% 33.9% #1 in 6 out of >16.5 12.5 13.1 10.4 11.4 13 retail countries 2016 2017 2018 3Q2019 Ambition 2022 Primary as a % of total retail customers Core l
Slide 4: Countering financial and economic crime remains our priority
Countering financial and economic crime remains our priority Continued focus on improving Know Your Customer (KYC) We keep developing tools to increase accuracy and effectiveness in the management of our non-financial risks • We made further progress in strengthening our global KYC organisation and
Slide 5: Strong mortgage growth at improved margins in Spain
Strong mortgage growth at improved margins in Spain We have introduced a new Improved customer experience and market share in 2019 mortgage relationship model… Comparing traditional to new model ytd August 2019 except for market share • A new call center platform, fully # of inbound calls* Conversio
Slide 6: We continue to take action to combat climate change
We continue to take action to combat climate change Important milestones achieved in 3Q2019 Strong sustainability deal activity in 3Q2019 • ING signed the UN-backed Principles for Responsible • We also help our customers reach their sustainability Banking as a founding member – one of 131 banks goal
Slide 7: 3Q2019 results
3Q2019 results 7
Slide 8: Income reflects robust lending margins and fee growth
Income reflects robust lending margins and fee growth Underlying pre-tax result (in € mln) Total underlying income (in € mln) 2,124 2,005 4,646 4,501 4,576 4,665 4,626 1,911 1,692 1,582 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 • 3Q2019 underlying result before tax was €1
Slide 9: NII improved quarter-on-quarter; 4-quarter rolling NIM at 154 bps
NII improved quarter-on-quarter; 4-quarter rolling NIM at 154 bps Net interest income excl. Financial Markets (FM) (in € mln) Higher NIM partially explained by FM (in bps) 3,470 3,459 3,435 3,391 3,391 156 153 155 154 154 152 153 154 152 154 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 3Q2018 4Q2018 1Q2019 2Q
Slide 10: 3Q2019 net core lending
3Q2019 net core lending Customer lending ING Group 3Q2019 (in € bln) Core lending businesses: €-1.0 bln 2.1 -1.4 -3.1 3.9 617.3 615.2 0.5 -0.2 1.2 0.0 -0.3 -0.5 30/06/2019 Retail Retail Retail Retail WB Lending WB Daily WB Other* Lease run- Treasury FX / Other** 30/09/2019 NL Belgium Germany Other B
Slide 11: Good fee income growth; higher FM with lower value adjustments
Good fee income growth; higher FM with lower value adjustments Net fee and commission income (in € mln) Underlying income Financial Markets (in € mln) +3.8% 720 747 704 711 183 232 27 675 14 196 213 281 295 262 290 280 176 226 254 255 257 156 159 159 176 180 180 259 249 256 262 274 -13 -4 -25 -58 -7
Slide 12: Expenses impacted by higher costs related to KYC
Expenses impacted by higher costs related to KYC Underlying operating expenses (in € mln) Regulatory costs* (in € mln) 515 493 515 266 97 106 91 266 2,216 2,303 2,272 2,354 2,334 98 97 91 106 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 1Q 2Q 3Q 4Q Expenses excl. regulatory costs Regulatory costs 2018 2019 •
Slide 13: Risk costs up QoQ, asset quality remains strong
Risk costs up QoQ, asset quality remains strong Risk costs (in € mln) Stage 3 ratio 276 215 242 1.7% 207 209 1.6% 1.6% 1.6% 1.6% 50 116 107 71 1.6% 1.6% 91 107 1.6% 1.5% 1.5% 1.5% 1.5% 73 1.4% 82 84 1.4% 40 80 44 1.3% 46 45 42 16 43 11 22 -21 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 3Q2018 4Q2018 1Q2019 2
Slide 14: ING Group CET1 ratio improved to 14.6%
ING Group CET1 ratio improved to 14.6% ING Group CET1 ratio development* 14.5% +0.2% -0.1% 14.6% ~13.5% 11.8%*** 2Q2019 Group CET1 Profit added to CET1** RWA & other 3Q2019 Group CET1 Basel IV CET1 ambition CET1 ratio Regulatory impacts 2019 SREP requirement Management buffer (incl. P2G) • 3Q2019 CE
Slide 15: ING Group financial ambitions
ING Group financial ambitions Actual 2018 Actual 3Q2019 Financial ambitions ~13.5%* • CET1 ratio (%) 14.5% 14.6% (Basel IV) Capital • Leverage ratio (%) 4.4% 4.4% >4% • Underlying ROE (%)** 11.2% 10.3% 10-12% (IFRS-EU Equity) Profitability • Underlying C/I ratio (%)** 54.8% 55.8% 50-52% Dividend • D
Slide 16: Wrap up
Wrap up 16
Slide 17: Wrap up
Wrap up • ING posted 3Q2019 net profit of €1,344 mln • Primary customers increased by 165,000 to 13.1 mln, representing more than one-third of our Retail customer base • Net core lending growth in Retail was €3.6 bln • In Wholesale Banking net core lending decreased by €4.6 bln, with volumes affecte
Slide 18: Appendix
Appendix 18
Slide 19: Limited impact of volatile items on 3Q2019 pre-tax result
Limited impact of volatile items on 3Q2019 pre-tax result Underlying pre-tax result Volatile items and regulatory costs Pre-tax result excl. volatile items (in € mln) (in € mln) and regulatory costs (in € mln) 3Q18 4Q18 1Q19 2Q19 3Q19 2,124 2,175 2,005 1,911 1,954 2,001 1,989 2,005 WB/FM – valuation
Slide 20: Group CET1 ratio at 14.6% and underlying ROE at 10.3%
Group CET1 ratio at 14.6% and underlying ROE at 10.3% Group CET1 ratio development during 3Q2019 Group underlying ROE calculation in 3Q2019 (amounts in € bln and %) (in € mln) Capital RWA Ratio Change As of 30 September 2019 Actuals 30 June 2019 46.2 318.3 14.5% IFRS-EU shareholders’ equity 53,512 N
Slide 21: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 7% 5% 2% 26% 15% 37% €703 €446 26% €257 3% bln bln bln 63% 10% 67% 17% 9% 13% Retail Banking Mortgages Netherlands Lending Wholesale Banking Other lending Netherlands Daily Banking & Trade Finance
Slide 22: Granular Wholesale Banking lending credit outstandings by geography and sector
Granular Wholesale Banking lending credit outstandings by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (3Q2019)* Lending Credit O/S Wholesale Banking (3Q2019)* 1% NL 12% Real Estate, Infra & Construction 9% 9% 17% Belux
Slide 23: Detailed Stage 3 disclosure on selected portfolios
Detailed Stage 3 disclosure on selected portfolios Selected portfolios (in € mln) Lending credit Stage 3 ratio Lending credit Stage 3 ratio Lending credit Stage 3 ratio O/S 3Q2019 3Q2019 O/S 2Q2019 2Q2019 O/S 3Q2018 3Q2018 Wholesale Banking 257,082 1.5% 251,034 1.3% 252,657 1.6% Lending 171,509 1.7%
Slide 24: Overview Turkey exposure
Overview Turkey exposure Total exposure ING to Turkey* (in € mln) Lending Credit O/S by currency 3Q2019 2Q2019 Change 2% 15% Lending Credit O/S Retail Banking 4,817 4,821 -0.1% USD Residential mortgages 537 525 +2.3% 36% EUR TRY Consumer lending 1,225 1,147 +6.8% Other 47% SME/Midcorp 3,054 3,149 -3
Slide 25: 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