Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (November 2023)
48 slides from Ing Groep's debt investor presentation, Nov 2, 2023
Slide 1: ING Credit Update 3Q2023
ING Credit Update 3Q2023 ING Investor Relations 2 November 2023
Slide 2: Delivering strong value in 3Q2023
Delivering strong value in 3Q2023 Continued primary High share of Growing volume mobilised2) customer growth mobile-only customers1) to finance the transition +181,000 62% €27 bln versus +227,000 in 2Q2023 versus 60% in 2Q2023 versus €25 bln in 2Q2023 Strong total income growth Increasing return on
Slide 3: Future proofing our business for success
Future proofing our business for success Our purpose Empowering people to stay a step ahead in life and in business Our strategic priorities A superior customer experience Sustainability at the heart 75% digital onboarding of new customers Publication of the in the Netherlands 2023 Climate Report 3Q
Slide 4: We continue helping our clients in their low-carbon transition
We continue helping our clients in their low-carbon transition Overview milestones 2023 1Q2023 2Q2023 4Q2023 Climate considerations Joined PCAF to help develop Published 2023 Climate Report, which embedded in corporate client data and methodology describes progress on our aim to steer and transactio
Slide 5: Continued strong performance in the German retail market
Continued strong performance in the German retail market Consistent customer growth with an increasing primary customer base Highlights1) 19.0 21.1 25.0 26.5 28.5 29.2 29.6 29.9 Most preferred bank #1 8.6 8.6 8.5 For the 17th time in a row 8.5 8.5 8.4 8.4 8.2 Net Promoter Score #1 2018 2019 2020 202
Slide 6: Right-sizing our capital remains a priority
Right-sizing our capital remains a priority Strong capital position ▪ The €2.5 bln share buyback as announced today is the next 15.2% step in converging our CET1 ratio towards our target level of 14.5% ~12.5% €2.5 bln ~€9 bln ▪ We have returned ~€21 bln to shareholders since 2018 ~12.5% ▪ €~7 bln di
Slide 7: Well on track towards our 2025 targets
Well on track towards our 2025 targets Financial target 3Q2023 2025 target Drivers ▪ Primary customer growth 5-10% ▪ Increasing package and service fees in daily banking to better reflect cost of service Fee income1) 3.8% annual growth ▪ Growing base in investment products, both in number of account
Slide 8: Business profile
Business profile 8
Slide 9: 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 10: Our strategy, with a focus on execution certainty
Our strategy, with a focus on execution certainty Purpose Empowering people to stay a step ahead in life and in business Strategic priorities A superior customer experience Sustainability at the heart Seamless Scalable Safe Our Enablers digital services Tech & Operations & secure people 10
Slide 11: Our focus SDGs are reflected in our Sustainability Direction
Our focus SDGs1) are reflected in our Sustainability Direction Environment Social Climate action Financial health Empowering our clients2) Empowering our customers by focusing on: ▪ Aim to steer the most carbon-intensive parts of our ▪ Financial inclusion by making bank products lending portfolio to
Slide 12: 3Q2023 results
3Q2023 results 12
Slide 13: Total income structurally higher in a positive rate environment
Total income structurally higher in a positive rate environment Total income excluding incidental income items (in € bln)1) ▪ Total income at a structurally higher level driven by a recovery of interest margin on liabilities 5.9 ▪ The cycle of recent central bank rate hikes appears to have 5.6 5.8 p
Slide 14: Continued high liability margin and increasing lending margin
Continued high liability margin and increasing lending margin Net interest income (in € mln) Lending and liability margin (in bps) Net interest margin (in bps) 3,545 4,012 4,061 4,028 3,332 129 127 128 129 130 159 156 157 121 121 114 136 4,012 4,061 4,028 135 152 3,604 3,860 145 94 140 134 71 128 -2
Slide 15: Strong and resilient positioning of our Retail Banking business
Strong and resilient positioning of our Retail Banking business Customer lending (in € bln) Net core lending €-2.4 bln 643.2 +0.7 +0.7 +0.5 637.3 -1.4 -2.2 -0.4 -0.2 -2.5 -0.9 -0.2 2Q2023 Retail Retail Retail Retail WB WB WB Treasury FX Other 2) 3Q2023 Netherlands Belgium Germany Other Lending DB&TF
Slide 16: Solid fee income growth in Retail Banking
Solid fee income growth in Retail Banking Net fee & commission income per business line (in € mln)1) Net fee & commission income per product category (in € mln) 876 888 896 912 909 876 888 896 912 909 96 105 106 131 107 295 318 323 346 294 207 194 201 217 206 238 258 244 253 246 583 573 575 569 608
Slide 17: Operating expenses well under control
Operating expenses well under control Expenses (in € mln) ▪ Expenses excluding regulatory costs and incidental items were 4.7% higher YoY 3,071 2,888 ▪ Main driver was higher staff expenses, reflecting the 2,793 2,629 525 2,626 impact of indexation and CLA increases across our markets 291 109 96 91
Slide 18: Low risk costs reflecting high quality and resilience of the loan book
Low risk costs reflecting high quality and resilience of the loan book Risk costs per business line (in € mln)1) Stage 2 ratio Stage 3 ratio 403 11.2% 10.2% 10.8% 9.8% 128 269 8.9% 152 1.6% 65 183 7.2% 1.5% 1.5% 7.0% 7.1% 6.9% 6.8% 1.4% 98 15 1.4% 1.5% 274 242 203 166 113 1.4% 1.4% 1.4% 5.8% 5.5% 1.
Slide 19: Capital
Capital 19
Slide 20: Risk-weighted assets decreased in 3Q2023
Risk-weighted assets decreased in 3Q2023, mainly due to a better overall profile of the loan book ING Group risk-weighted assets development (in € bln) Credit RWA €-1.8 bln 322.9 0.4 0.0 -1.1 -0.1 -0.9 -0.4 0.0 320.8 2Q2023 FX Volume Overall profile of Models, Other Market Operational 3Q2023 RWA imp
Slide 21: CET1 ratio increased to 15.2%
CET1 ratio increased to 15.2%. Pro forma CET1 ratio at 14.5% when adjusted for the announced €2.5 bln share buyback Total capital ratio development (in %) +2.9% 20.4% +2.3% 14.9% +0.3% -0.1% +0.1% 15.2% ~12.5% 10.8% 2Q2023 Profit added Other capital RWA 3Q2023 AT1 Tier 2 3Q2023 Total Basel IV CET1 C
Slide 22: Buffer to MDA remained strong
Buffer to MDA remained strong ING Group fully loaded SREP requirements ▪ ING Group’s fully loaded CET1 requirement is 10.83% ▪ 4.50% Pillar 1 Requirement (P1R) MDA restriction ▪ 0.98% Pillar 2 Requirement (P2R) MDA level ▪ 2.50% Capital Conservation Buffer (CCB) restriction (15.10%) MDA level ▪ 0.85
Slide 23: Funding & liquidity
Funding & liquidity 23
Slide 24: ING meets its TLAC and MREL requirements
ING meets its TLAC and MREL requirements TLAC as % of RWA (and LR) MREL as % of RWA (and LR) 33.1% 33.1% 27.79% 29.04% 12.8% 23.50% 12.8% 5.53% 5.50% 2.9% 5.50% 2.9% 2.3% 2.3% 22.29% 23.51% 15.2% 18.00% 15.2% 3Q2023 Current Requirement 3Q2023 Current Requirement Requirement 1/1/2024 9.5% 6.75% 9.5%
Slide 25: Long-term debt maturity ladder and issuance guidance
Long-term debt maturity ladder and issuance guidance Issuance guidance 2023 Currency split of outstandings as at 30 September 2023 ▪ Holdco Senior issuance was close to €6 bln YTD (FY guidance HoldCo Senior Tier 2 AT1 was €7-9 bln). Secured issuance just over €7 bln YTD (FY guidance was €4-7 bln) 10
Slide 26: Covered bond funding through various programmes
Covered bond funding through various programmes ING Bank N.V. ING Belgium S.A./N.V. ING DiBa AG ING Bank (Australia) Ltd ING Bank Hipoteczny Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured ▪ Covered bond: ~€18.5 bln ▪
Slide 27: ING issues Green Bonds in various formats
ING issues Green Bonds in various formats Green Bond issuance objectives External consultants & providers ▪ Support meeting our sustainability objectives ▪ Second party opinion provider ▪ Fund growth in our Eligible Green Loan portfolio ▪ Continue leadership in the Green Bond market ▪ Renewable ener
Slide 28: We issue Green Bonds to support our sustainability objectives
We issue Green Bonds to support our sustainability objectives ▪ Our Green Bond Framework was updated in 2022 and has been assessed by a Second Party Opinion and is aligned with the ICMA Green Bond Principles 2021. The framework is presented through below four pillars: Use of proceeds Project Evaluat
Slide 29: External recognition of ING's commitment to ESG
External recognition of ING’s commitment to ESG ESG ratings ING Groep N.V. ▪ Evaluation: ING's management of ESG ▪ Rating AA ▪ ESG evaluation ‘Strong’ (score 84/100) material risk is ‘Strong’ ▪ Updated: July 2023 ▪ Updated: June 2022 ▪ Position: in the 22nd percentile of 406 banks ▪ Updated: August
Slide 30: Strong and conservative balance sheet with customer deposits as primary 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 Assets Liabilities ▪ See “Asset Quality” section of this presentation 1,029 1,022 1,029 1,022 33 17 25 15 51 16 53 15 114 117 31 26 Sta
Slide 31: Robust liquidity position with a 12-month moving average LCR of 140%
Robust liquidity position with a 12-month moving average LCR of 140% Funding mix1) ING maintains a sizeable liquidity buffer 30 September 2023 ▪ ING’s funding consists mainly of retail deposits, corporate deposits and public debt 9% 2% Customer deposits (private individuals) 6% Customer deposits (ot
Slide 32: 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 1 November 2023 Latest rating actions on ING Group and Bank S&P Moody’s Fitch ▪ S&P: upgraded ING Bank to A+ in July 2017. In July Stand-alone rating a baa1 a+ 2023, S&P affirmed ING's rating and outlook, reflecting
Slide 33: Asset quality
Asset quality 33
Slide 34: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity 1) ING Group Retail Banking Wholesale Banking 5% 12% 16% 33% 21% 3% 15% €814 €543 6% €543 €272 19% bln bln bln bln 16% 22% 4% 61% 17% 62% 67% 8% 12% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesale Banking Consumer
Slide 35: Wholesale Banking lending credit outstandings
Wholesale Banking lending credit outstandings 1) Loan portfolio is well diversified across geographies… …and sectors Wholesale Banking Wholesale Banking 1% NL 2% 9% Real Estate, Infra & Construction 14% 14% Belux Commodities, Food & Agri 2% Germany 32% 12% TMT & Healthcare 10% Transportation & Logis
Slide 36: Addition to loan loss provisions per Stage
Addition to loan loss provisions per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln)1,2) Stage 3 provisioning (in € mln)2) 52 407 48 37 21 318 2 30 98 86 23 4 239 238 10 -9 -4 -50 -39 177 197 35 31 -117 -81 17 89 20 -48 43 1 6 -194 124 -84 -31 8 -15 167 141 155 149 116 -14 -190
Slide 37: Appendix
Appendix 37
Slide 38: 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. ▪ Secured funding & senior unsecure
Slide 39: Comfortable buffer to Additional Tier 1 trigger
Comfortable buffer to Additional Tier 1 trigger Buffer to AT1 trigger (in € bln) 30 September 2023 48.9 €26.4 bln 8.2pp1) 22.5 3Q2023 7% CET1 CET1 capital AT1 conversion trigger ▪ ING Group capital buffer to conversion trigger (7% CET1) is high at €26.4 bln, or 8.2% of RWA 1) Difference between 15.2
Slide 40: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities Currency Issue date First call date Coupon Outstanding (mln)2) Reset spread USD Feb-23 May-28 7.500% 1,000 UST + 371bps USD1) Sep-21 May-27 3.875% 1,000 UST + 286bps USD1) Sep-21 May-31 4.250% 1,000 UST + 286bps USD Feb-20 May-2
Slide 41: HoldCo Senior transactions in past 12 months
HoldCo Senior transactions in past 12 months ISIN Issue date First call date Maturity Tenor Coupon Issued (mln)1) Reset spread EUR XS2624976077 May-23 May-28 May-29 6NC5 4.5% 1,500 3mE+160 XS2624977554 May-23 May-33 May-34 11NC10 4.75% 1,500 3mE+190 XS2554746185 Nov-22 Nov-26 Nov-27 5NC4 4.874% 1,25
Slide 42: 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 type1) ▪ UCITS, CRR and ECBC Label compliant. Rated Aaa/AAA/AAA (Moody’s/S&P/Fitch) 3%1% Interest Only 3% ▪ This programme is used for external issuance purposes. There is a separate €15
Slide 43: Benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, although macro environment is increasingly challenging Dutch Purchasing Managers Index (PMI) indicates industrial Dutch unemployment rates (%) continue to decrease since contraction as it decreased to 43.6 August 2020 70 15 60 10 50 5 40 30 0 2
Slide 44: 3Q2023 results overview
3Q2023 results overview In € mln Reported P&L Volatile items P&L excluding volatile items Net interest income 4,028 15 4,013 Net fee and commission income 909 3 906 Investment income 103 0 102 Other income 802 11 791 Total income 5,842 29 5,813 Expenses excl. regulatory costs 2,684 122 2,562 Regulat
Slide 45: Volatile income and expense items
Volatile income and expense items Volatile items (in € mln) 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 WB/FM – valuation adjustments -15 -2 -10 33 15 Capital gains/losses -3 0 15 -0 0 Hedge ineffectiveness1) -431 -71 35 -46 102 Other items income2) -218 -319 -69 -6 -88 Total volatile items – income -668 -39
Slide 46: Hyperinflation accounting in Türkiye
Hyperinflation accounting in Türkiye Application of IAS 29 to consolidation of ING in Türkiye Impact on results (in € mln) ▪ We applied IAS 29 (‘Financial Reporting in Hyperinflationary 2Q2023 3Q2023 Economies’) to the consolidation of our subsidiary in Türkiye, Profit or loss effective as of 1 Janu
Slide 47: Accounting asymmetry impacting net interest income
Accounting asymmetry impacting net interest income Treasury interest rate differential (in € mln) WB Financial Markets (in € mln) 33 36 24 47 359 375 18 349 267 261 273 282 287 120 184 176 327 385 408 215 -102 -137 27 22 41 -234 -225 -249 78 50 47 28 -19 -73 -61 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 3Q
Slide 48: 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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