Ing Groep N.v. · EURONEXT:INGA
Ing Groep — FY2019 Earnings Presentation
24 slides from Ing Groep's earnings presentation, Feb 6, 2020
Slide 1: Full year 2019 results
Full year 2019 results ING posts 2019 net result of €4,781 mln; 4Q2019 net result of €880 mln Ralph Hamers, CEO ING Amsterdam • 6 February 2020
Slide 2: Key points
Key points • ING posted 2019 net profit of €4,781 mln, up 1.7% on 2018 • Our primary customer base, a driver of future value, increased by more than 830,000, to 13.3 mln in 2019 • We recorded net core lending growth of €17.2 bln in 2019, or 2.9%, primarily in Retail Banking which grew by €16.1 bln w
Slide 3: Primary customer growth underpins commercial momentum
Primary customer growth underpins commercial momentum Target to reach >16.5 mln primary customers* by 2022 2019 primary customer growth across Retail segments 24.6% 25.2% 26.6% 29.2% 30.5% 32.8% 34.3% Benelux >16.5 +63k 12.5 13.3 10.4 11.4 7.8 8.4 9.2 Challengers +526k 2013 2014 2015 2016 2017 2018
Slide 4: In Retail our mobile approach is taking off
In Retail our mobile approach is taking off % of mobile-only in channel use among active customers who % mobile in total interactions with Annual mobile non-deposit sales contact us* ING per 1,000 active customers CAGR +56%** CAGR +42%*** CAGR +90% 37% 82% 62 26% 73% 46 19% 63% 28 12% 52% 9 2016 201
Slide 5: Our focus on building an innovative bank
Our focus on building an innovative bank Important milestones on innovation Making further progress in 2019 with Yolt and AXA initiatives achieved in 4Q2019 • Yolt, our smart money app, has grown to over 1 mln registered users and has • In line with our strategy to create expanded to offer open bank
Slide 6: Sustainability is at the heart of our strategy
Sustainability is at the heart of our strategy Major We are milestones recognised in 2019 as a leader in sustainability We are recognised as a leader in sustainability • •ING INGsigned was recognised the UN-backed as anPrinciples A-list company for Responsible for leadership Banking on • ING was rec
Slide 7: FY2019 results
FY2019 results 7
Slide 8: Income growth supported by higher NII and fees
Income growth supported by higher NII and fees Total underlying income Net interest income excl. FM Net fee and commission income (in € bln) (in € bln) (in € bln) CAGR +1.6% 18.1 18.3 CAGR +2.3% 17.5 17.7 13.3 13.6 13.7 12.8 CAGR +5.6% 2.7 2.8 2.9 2.4 2016 2017 2018 2019 2016 2017 2018 2019 2016 201
Slide 9: Underlying expenses increased driven by higher KYC, staff and regulatory costs
Underlying expenses increased driven by higher KYC, staff and regulatory costs Underlying operating expenses (in € bln) Underlying cost/income ratio CAGR +6.5% CAGR +2.7% 0.9 1.0 0.8 0.9 56.6% 55.5% 54.8% 54.2% 8.9 9.0 9.3 8.6 50.4% 51.0% 49.3% 49.5% 2016 2017 2018 2019 2016 2017 2018 2019 Expenses
Slide 10: Risk costs increased, remaining below through-the-cycle average
Risk costs increased, remaining below through-the-cycle average Risk costs (in € bln and bps of average customer lending) • Risk costs increased to €1,120 mln in 2019, or 18 bps of average customer lending, remaining below the 18 18 through-the-cycle average of ~25 bps 12 11 • The increase was mainl
Slide 11: Underlying result down 11.3% in 2019; ROE at 9.4% for FY2019
Underlying result down 11.3% in 2019; ROE at 9.4% for FY2019 Underlying net result* (in € mln) Underlying return on equity* 5,389 11.2% 4,976 4,957 10.1% 10.2% 4,781 9.4% 2016 2017 2018 2019 2016 2017 2018 2019 €685 mln incl. €-775 mln settlement impact and €90 mln net result from Insurance other •
Slide 12: ING Group financial ambitions
ING Group financial ambitions Actual 2018 Actual 2019 Financial ambitions ~13.5%* • CET1 ratio (%) 14.5% 14.6% (Basel IV) Capital • Leverage ratio (%) 4.4% 4.6% >4% • Underlying ROE (%)** 11.2% 9.4% 10-12% (IFRS-EU Equity) Profitability • Underlying C/I ratio (%)** 54.8% 56.6% 50-52% Dividend • Divi
Slide 13: 4Q2019 results
4Q2019 results 13
Slide 14: We continue our efforts to counter financial and economic crime
We continue our efforts to counter financial and economic crime Continued focus on know your customer (KYC) We keep investing in regulatory compliance • The number of FTE working globally on know your • We announced an investment in US-based regulatory customer (KYC) related activities has increased
Slide 15: Income reflects discipline in lending margins and fee growth
Income reflects discipline in lending margins and fee growth Underlying pre-tax result (in € mln) Total underlying income (in € mln) 2,005 4,501 4,576 4,665 4,626 4,439 1,911 1,692 1,582 1,337 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 • 4Q2019 underlying result before tax
Slide 16: NII improved on year-ago and previous quarter; 4-quarter rolling NIM at 154 bps
NII improved on year-ago and previous 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) 3,459 3,435 3,478 3,391 3,391 156 157 155 154 154 153 154 152 154 154 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q2018 1Q
Slide 17: 4Q2019 net core lending
4Q2019 net core lending Customer lending ING Group 4Q2019 (in € bln) Core lending businesses: €2.0 bln 0.5 1.9 -2.0 1.5 -0.1 -0.3 -0.6 -2.1 617.3 -0.6 0.8 616.4 30/09/2019 Retail Retail Retail Retail WB Lending WB Daily WB Other* Lease run- Treasury FX / Other** 31/12/2019 NL Belgium Germany Other B
Slide 18: Further growth of fee income; FM client business improved YoY
Further growth of fee income; FM client business improved YoY Net fee and commission income* (in € mln) Underlying income Financial Markets (in € mln) +4.4% 747 735 254 255 257 704 711 221 675 14 180 295 262 290 280 303 159 159 176 180 176 249 256 262 274 256 -4 -25 -58 -72 -74 -14 4Q2018 1Q2019 2Q2
Slide 19: Higher expenses driven by elevated KYC costs
Higher expenses driven by elevated KYC costs Underlying operating expenses (in € mln) Regulatory costs* (in € mln) 515 303 493 515 266 97 106 266 303 2,303 2,272 2,354 2,334 2,372 98 97 91 106 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 1Q 2Q 3Q 4Q Expenses excl. regulatory costs Regulatory costs 2018 2019 •
Slide 20: Risk costs increased sequentially, asset quality remains strong
Risk costs increased sequentially, asset quality remains strong Risk costs (in € mln) Stage 3 ratio 428 242 276 1.6% 1.6% 1.6% 1.6% 1.6% 207 209 254 50 116 71 91 1.5% 1.5% 1.5% 1.5%* 107 73 75 1.4% 1.4% 84 80 1.4% 1.3% 1.3%* 40 44 84 1.2% 45 42 11 16 22 43 15 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q201
Slide 21: ING Group CET1 ratio stable at 14.6%
ING Group CET1 ratio stable at 14.6% ING Group CET1 ratio development 14.6% 0.3% 0.3% 15.2% -0.6% 14.6% ~13.5% 11.8%** 3Q2019 Group CET1 Profit added to CET1* RWA & other Pro forma 4Q2019 Part of expected 4Q2019 Group CET1 Basel IV CET1 Group CET1 supervisory RWA ambition impact CET1 ratio Expected
Slide 22: Wrap up
Wrap up 22
Slide 23: Wrap up
Wrap up • ING posted 2019 net profit of €4,781 mln, up 1.7% on 2018 • Our primary customer base, a driver of future value, increased by more than 830,000, to 13.3 mln in 2019 • We recorded net core lending growth of €17.2 bln in 2019, or 2.9%, primarily in Retail Banking which grew by €16.1 bln whil
Slide 24: 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