Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Investor Day (March 2019)
18 slides from Ing Groep's investor day presentation, Mar 25, 2019
Slide 1: Progressing towards our financial ambitions
Progressing towards our financial ambitions Investor Day 2019 Tanate Phutrakul, CFO Frankfurt • 25 March 2019
Slide 2: ING's journey through a CFO lens
ING’s journey through a CFO lens Launch of Think Forward strategy Accelerating Think Forward Today 2014 2015 2016 2017 2018 2019 Future • Completed restructuring and repayment of State aid • Interest rates expected to remain at current low • NIM supported by asset mix change and savings rate levels
Slide 3: Think Forward has consistently delivered strong financial results
Think Forward has consistently delivered strong financial results Strong underlying income growth… …disciplined cost growth… …and below-average risk costs… (in € bln) (in € bln) (in € bln and bps of average RWA) CAGR +4.3% CAGR +23.4% 55 44 16.6 17.5 17.7 18.1 CAGR +1.1% 31 15.3 22 21 1.6 1.3 1.0 0.
Slide 4: NII increase reflects lending growth at resilient margins…
NII increase reflects lending growth at resilient margins… Robust customer lending growth since 2014 (in € bln)… …has supported growth in NII (excl. FM, in € bln)… 574 597 CAGR +3.9% 561 514 533 13.6 12.8 13.3 11.6 12.2 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 …as net interest margin improv
Slide 5: …while liability NII reduced, partly offset by several levers
…while liability NII reduced, partly offset by several levers Lower replicating portfolio yield still expected… ...which is likely to keep pressurising liability NII Net interest income by type (in % of total NII) 5% 3% 6% 8% 7% 60% 62% 61% 61% 63% 35% 35% 33% 31% 30% 2014 2015 2016 2017 2018 2014 2
Slide 6: Balance sheet mix steered towards profitable customer lending
Balance sheet mix steered towards profitable customer lending ING successfully replaced liquid investments with …while we gradually changed our asset mix towards higher own-originated lending… margin lending Balance sheet by type (in % of total assets) Customer lending by type (in € bln and % of tot
Slide 7: Robust organic growth, especially in Challengers & Growth Markets
Robust organic growth, especially in Challengers & Growth Markets Customer lending (in € bln and % of total) Underlying income (in € bln and % of total) 597 561 18.1 11% 17.5 514 11% 15.3 13% 10% 13% 21% 14% 19% 18% 41% 21% 23% 37% 34% 37% 34% 20% 18% 20% 32% 16% 13% 14% 12% 16% 17% 17% 18% 21% 17%
Slide 8: Upside potential driven by attractive funding and lending mix
Upside potential driven by attractive funding and lending mix Balance sheet ING Group (in € bln) ING benefits from wider credit Balance sheet size ING Group 31 December 2018: €887 bln spreads • Favourable exposure to credit spreads: loans to customers is Other** 198 credit spread receiver, wholesale
Slide 9: Think Forward accelerates growth in fee income
Think Forward accelerates growth in fee income We have met ambition to grow fee income at 5-10% p.a. (in € bln) Peer comparison confirms large upside for fee income* CAGR +5.2% CAGR +5.2% CAGR +0.2% CAGR +1.1% 2.7 2.8 2.4 26.7% 2.3 2.3 30% 19.2% 15.5% 27% 40% 3% 2014 2015 2016 2017 2018* ING Average
Slide 10: Underlying expense base stable; regulatory expenses increased
Underlying expense base stable; regulatory expenses increased ING total underlying expenses (in € bln) Regulatory costs split by type (in € mln) CAGR +23.4% CAGR +23.4% CAGR +1.1% 901 947 845 620 381 375 352 408 244 208 9.0 176 179 8.6 8.6 8.6 8.9 250 143 233 316 341 364 159 2014 2015 2016 2017 2018
Slide 11: Cost increases in those areas where we see growth
Cost increases in those areas where we see growth Retail Challengers & Growth Retail Benelux (in € bln) Markets (in € bln) Wholesale Banking (in € bln) CAGR +22.3% CAGR +28.0% CAGR +28.2% CAGR -4.2% CAGR +6.3% CAGR +2.8% 4.0 3.8 3.6 3.4 3.4 2.7 2.7 2.4 2.6 2.6 2.2 2.2 2.4 2.3 2.4 2014 2015 2016 2017
Slide 12: Efficiency and transformation programmes achieve cost savings
Efficiency and transformation programmes achieve cost savings Status of investments, cost savings and impact on FTEs (2016 – 2018) Cumulative investments* (in € mln) 199 575 774 Gross annual cost savings (in € mln) 380 235 615 Gross staff reduction** -2,300 -2,900 -5,200 (in FTE) Efficiency programm
Slide 13: We continue to improve our operational efficiency
We continue to improve our operational efficiency Strong operating leverage in recent years Excluding regulatory costs, C/I ratio already below 50% 2014 = 100 58.7% 120 +15% 55.9% 55.5% 54.2% 54.8% 110 56.0% +5% 52.1% 50.4% 49.5% 100 49.3% 90 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Custome
Slide 14: Good CET1 ratio development towards our ambition
Good CET1 ratio development towards our ambition Capital allocation framework in theory, and… …in practice Business growth 1 2 • Supporting profitable loan growth 4.4% -2.4% 3 4 -0.6% -1.4% 0.6% 14.5% 1.2% 4 12.7% 1 Net result 3 2 4Q15 Net Dividend Model Volume Risk FX & 4Q18 Profit retention Capita
Slide 15: Basel IV and other RWA impacts are being actively managed
Basel IV and other RWA impacts are being actively managed Pro-forma RWA impact from Basel IV and model changes Limited amount of CET1 capital build required until 2027 15%-18% 14.5% ~-2.0% ~0.7% ~13.2% ~13.5% ~80% of total ~20% of total impacts impacts 11.8%* 4Q18 Possible Management Pro-forma ING G
Slide 16: Management actions to partly mitigate RWA impacts
Management actions to partly mitigate RWA impacts Product Features, Data Disintermediation and Income Enhancement Portfolio mix Quality and Regulations Capital Relief • We see opportunities to • Some pricing • ING developed its • All businesses will need adjust certain product opportunities exist in
Slide 17: ING Group financial ambitions
ING Group financial ambitions 2014 2015 2016 2017 2018 Financial ambitions • CET1 ratio (%) 10.5% 12.7% 14.2% 14.7% 14.5% ~13.5%* (Basel IV) Capital • Leverage ratio** (%) - 4.4% 4.8% 4.7% 4.4% >4% • Underlying ROE (%) 7.2% 8.6% 10.1% 10.2% 11.2% 10-12% (IFRS-EU Equity)*** Profitability • Underlying
Slide 18: 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