Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (August 2024)
53 slides from Ing Groep's debt investor presentation, Aug 1, 2024
Slide 1: ING Credit Update 2Q2024
ING Credit Update 2Q2024 ING Investor Relations 1 August 2024
Slide 2: Recap of our recent Capital Markets Day
Recap of our recent Capital Markets Day ING is a highly successful bank, with a unique DNA and a strong track record Operating in attractive markets with enormous untapped potential Continuing to accelerate growth, increase impact and deliver value Aiming to be the best European bank for customers,
Slide 3: Accelerating growth with continued strong commercial performance
Accelerating growth with continued strong commercial performance Mobile primary customers1) Net core lending growth Net core deposits growth +248,000 €+8 bln €+15 bln ▪ Significant growth in mobile ▪ Strong commercial performance ▪ Strong growth of the deposit base primary customers, driven by the m
Slide 4: Increasing impact for our stakeholders
Increasing impact for our stakeholders Customers Our people Planet and society Shareholders ▪ +430,000 mobile ▪ Further improving ▪ Manage our lending ▪ Four-quarter rolling primary customers in engagement scores portfolio towards return on equity of 14% 1H2024 ▪ Progression to the net-zero by 2050
Slide 5: Consistently delivering value
Consistently delivering value Strong capital generation Attractive returns on strong capital base (in %) ▪ Strong NII development, growing 12.0 14.2 15.2 15.1 14.3 by €65 mln quarter-on-quarter, excluding accounting asymmetry 13.8 14.8 14.8 14.0 and one-offs 11.7 ▪ €2 bln fee income in 1H2024, on tr
Slide 6: Showcase of 'Growing the difference' strategy execution - Romania
Showcase of ‘Growing the difference’ strategy execution - Romania Consistent customer growth with an increasing primary customer base Growing the difference ▪ Digital leadership 31% 33% 36% 40% 47% 49% 52% 53% 54% with new digital 0.9 0.9 onboarding process 0.8 0.8 0.1 0.7 0.1 ▪ Digital lending and
Slide 7: Business profile
Business profile 7
Slide 8: Well-diversified business mix
Well-diversified business mix Retail Banking Retail Banking footprint Wholesale Banking Wholesale Banking ▪ Focus on earning the International Network ▪ A leading European primary relationship Netherlands Wholesale Bank, powered Belgium EMEA by: ▪ Technology to offer a Luxembourg Asia Pacific differ
Slide 9: Executing our strategy to be the best European bank
Executing our strategy to be the best European bank growing the difference Purpose Empowering people to stay a step ahead in life and in business Superior value for customers Uniquely Strategic pillars Sustainability at the heart ING Providing Staying seamless digital services safe & secure Enablers
Slide 10: 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 customers3) by focusing on: ▪ We aim to steer the most carbon-intensive parts of our ▪ Financial inclusion by making bank products lending portfol
Slide 11: 2Q2024 results
2Q2024 results 11
Slide 12: Net interest income increased despite margin normalisation
Net interest income increased despite margin normalisation Net interest income (in € mln) Lending and liability margin (in bps) Net interest margin (in bps) 4,061 4,028 3,875 3,825 3,830 156 157 156 129 130 130 131 132 155 152 1,880 1,877 1,810 1,795 1,779 154 121 121 152 151 118 116 148 112 145 2,0
Slide 13: Strong development of structural net interest income drivers
Strong development of structural net interest income drivers Net interest 2Q2024 income remained NII development strong in 1Q2024 (in € mln) NII excl accounting asymmetry and one-offs €+65 mln Accounting asymmetry €-91 mln 35 46 31 3,825 3,830 -49 -43 -16 NII 1Q2024 Liability NII Lending NII Other N
Slide 14: Focus on growing customer balances is clearly paying off
Focus on growing customer balances is clearly paying off Customer lending (in € bln) Main drivers Net core lending growth €+7.8 bln ▪ Strong growth in customer lending 3.2 662.2 ▪ Growth in Retail Banking mainly 4.9 0.6 0.4 654.0 driven by strong performance in -1.0 mortgages across all markets ▪ In
Slide 15: Fee income on track to reach our 2024 target
Fee income on track to reach our 2024 target Net fee & commission income per business line (in € mln)1) Main drivers ▪ Year-on-year growth was mainly +10% driven by structural (alpha) revenues and effectiveness of our fee structures 912 909 998 999 879 ▪ +0.9 mln mobile primary 294 354 322 346 296 c
Slide 16: Total income outlook for 2024 increased to >€22 bln
Total income outlook for 2024 increased to >€22 bln P&L drivers 1H2024 Previous 2024 outlook Current 2024 outlook Structural NII €8.4 bln €16.1 – €16.6 bln (upper end) €16.1 – €16.6 bln (upper end) Accounting asymmetry €-0.8 bln €-1.1 bln Net interest income €7.7 bln €15.0 - €15.5 bln (upper end) Fe
Slide 17: Total expenses in line with our 2024 outlook
Total expenses in line with our 2024 outlook Development operating expenses (in € bln) +3% +6% 0.6 0.4 0.0 5.9 5.7 +1% +3% 5.4 0.0 5.1 +4% -2% Total Regulatory Incidental Operating CLA / salary Danske VAT Business Operational Operating Regulatory Incidental Total expenses costs items expenses indexa
Slide 18: Risk costs below through-the-cycle average
Risk costs below through-the-cycle average Risk costs per business line (in € mln)1) Stage 2 ratio Stage 3 ratio 10.8% 300 9.8% 1.8% 8.9% 258 8.0% 8.1% 7.6% 1.6% 1.6% 183 7.7% 7.3% 1.5% 1.6% 93 202 6.9% 6.8% 1.4% 1.5% 98 15 86 7.5% 7.5% 166 165 6.9% 1.5% 1.5% 1.4% 113 86 98 1.4% 1.4% 1.4% -15 -1 5.1
Slide 19: Strong performance on all targets
Strong performance on all targets Results 1H2024 Mobile primary Total Fee Cost/income CET1 Return on customers income income ratio ratio equity 1H2024 1H2024 1H2024 4-quarter rolling 2Q2024 4-quarter rolling +430,000 €11.3 bln €2.0 bln 52.1% 14.0% 14.0% Outlook 2024 Mobile primary Total Fee Cost/inc
Slide 20: Capital
Capital 20
Slide 21: Risk-weighted assets increased due to business growth and a temporary increase from model changes
Risk-weighted assets increased due to business growth and a temporary increase from model changes Risk-weighted assets development (in € bln) Credit RWA €+8.3 bln 6.5 -0.6 -0.4 0.0 330.9 3.9 -2.1 323.1 0.6 1Q2024 FX Volume Overall profile of Models, Other Market Operational 2Q2024 RWA impact develop
Slide 22: CET1 ratio decreased to 14.0% due to the ongoing share buyback
CET1 ratio decreased to 14.0% due to the ongoing share buyback Total capital ratio development (in %) +2.9% 19.1% +2.2% 14.8% -0.8% 14.1% +0.3% -0.0% -0.4% 14.0% ~12.5% 10.8% 1Q2024 Share Pro forma Profit added Other capital RWA 2Q2024 AT1 Tier 2 2Q2024 Total Basel IV CET1 CET1 ratio buyback 1Q2024
Slide 23: Buffer to MDA remains strong
Buffer to MDA remains strong ING Group fully loaded SREP requirements ▪ Fully loaded CET1 requirement is 10.77% ▪ 4.50% Pillar 1 Requirement (P1R) MDA restriction ▪ 0.93% Pillar 2 Requirement (P2R) MDA level ▪ 2.50% Capital Conservation Buffer (CCB) restriction (14.99%) MDA level ▪ 0.84% Countercycl
Slide 24: Funding & liquidity
Funding & liquidity 24
Slide 25: Comfortably meeting TLAC and MREL requirements
Comfortably meeting TLAC and MREL requirements TLAC/MREL as percentage of RWA TLAC/MREL as percentage of leverage exposure 32.7% 9.4% 28.79% 13.7% 23.28% 5.28% 6.75% 7.27% 3.9% 5.28% 2.9% 0.8% 2.2% 0.6% 23.51% 14.0% 18.00% 4.0% TLAC/MREL TLAC MREL TLAC/MREL TLAC MREL eligible instruments requirement
Slide 26: Long-term debt maturity ladder and issuance guidance
Long-term debt maturity ladder and issuance guidance Issuance guidance 2024 Currency split of outstandings as per 30 June 2024 Guidance for 2024 issuance is: HoldCo Senior Tier 2 AT1 ▪ ~€6-8 bln in HoldCo Senior, of which ~€5.3 bln has been issued 8% 9% 3% in 2024 ▪ ~€7-9 bln of Secured issuance (in
Slide 27: Issuance programmes of main ING subsidiaries
Issuance programmes of main ING subsidiaries ING Bank N.V. ING Belgium ING DiBa AG ING Bank (Australia) Ltd ING Bank Hipoteczny S.A./N.V. (Poland) Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured ▪ Senior unsecured ▪ Co
Slide 28: ING is dedicated to its Green Bond franchise
ING is dedicated to its Green Bond franchise Green Bond issuance objectives and added value External consultants & providers ▪ Support meeting our sustainability objectives ▪ Second party Opinion provider ▪ Fund growth in our Eligible Green Loan portfolio ▪ Continued leadership in the Green Bond mar
Slide 29: ING Green Bond Framework
ING Green Bond Framework ▪ Our Green Bond Framework1 was updated in 2022 and has been assessed by a Second Party Opinion (SPO) and is aligned with the ICMA Green Bond Principles 2021. The framework is presented through below four pillars: Use of proceeds Project Evaluation and Selection ▪ ING will f
Slide 30: Project selection and management of proceeds
Project selection and management of proceeds ▪ Projects financed and/or refinanced through Green Bond proceeds are evaluated and selected based on compliance with the Eligibility Criteria Compliance with the Eligibility Criteria Management of proceeds ▪ ICMA Green Bond Principles categories ▪ Eligib
Slide 31: 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 material risk is ‘Strong’ ▪ Rating AA ▪ Position: in the 21st percentile of 339 banks ▪ Updated: July 2023 ▪ Updated: December 2023 Sustainability Index Products ING is regularly included
Slide 32: Strong balance sheet with customer deposits as the primary source of funding
Strong 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 1,030 1,041 1,030 1,041 22 15 27 15 18 18 98 97 19 54 20 51 Stable funding profile
Slide 33: Robust liquidity position with a 12-month moving average LCR of 146%
Robust liquidity position with a 12-month moving average LCR of 146% Funding mix1) ING maintains a sizeable liquidity buffer 30 June 2024 ▪ ING’s funding consists mainly of retail deposits, corporate deposits and public debt 10% 2% Customer deposits (private individuals) 6% Customer deposits (other)
Slide 34: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING on 31 July 2024 Latest rating actions on ING Group and Bank S&P Moody’s Fitch ▪ S&P: upgraded ING Bank to A+ in July 2017. In June Stand-alone rating a baa1 a+ 2024, S&P affirmed ING's rating and outlook, reflecting S&P’s
Slide 35: Asset quality
Asset quality 35
Slide 36: Addition to loan loss provisions per Stage
Addition to loan loss provisions per Stage Stage 1 provisioning (in € mln)1) Stage 2 provisioning (in € mln)1,2) Stage 3 provisioning (in € mln)1) 30 23 451 10 24 17 20 3 6 47 368 -4 -7 10 -9 -4 -23 -12 -4 -39 -46 -59 -81 -104 238 306 -16 -48 209 -100 -84 89 156 -35 -94 124 -147 8 59 116 149 159 145
Slide 37: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity 1) ING Group Retail Banking Wholesale Banking 12% 6% 10% 34% 22% 16% 9% 20% €810 €537 6% €537 €273 bln bln bln bln 12% 21% 5% 59% 63% 17% 8% 66% 13% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesale Banking Consumer
Slide 38: 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% 12% NL 1% 10% Real Estate, Infra & Construction 16% Belux Commodities, Food & Agri 2% 9% Germany 33% 11% TMT & Healthcare Transportation & Logis
Slide 39: Appendix
Appendix 39
Slide 40: 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 41: Comfortable buffer to Additional Tier 1 trigger
Comfortable buffer to Additional Tier 1 trigger Buffer to AT1 trigger (in € bln) ING Group available distributable items (in € mln) 30 June 2024 2023 2022 46.2 Share premium 17,116 17,116 Other reserves 29,167 30,859 Legal and statutory reserves -770 -984 €23.1 bln 7.0pp1) Non-distributable -6,727 -
Slide 42: Outstanding benchmark capital securities per 2Q2024
Outstanding benchmark capital securities per 2Q2024 (Additional) Tier 1 securities Currency Issue date First call date Coupon Outstanding (mln)2) Reset spread USD Feb-24 May-30 8.000% 1,250 SOFR MS+436 USD Feb-23 May-28 7.500% 1,000 UST + 371bps USD1) Sep-21 May-27 3.875% 1,000 UST + 286bps USD1) Se
Slide 43: 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 XS2764264607 Feb-24 Aug-28 Aug-29 5.5nc4.5 3.87% 1,250 3mE+125 XS2764264789 Feb-24 Feb-34 Feb-35 11nc10 4.00% 1,250 3mE+140 USD US456837BL64 Mar-24 Mar-29 Mar-30 6nc5 5.
Slide 44: 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% Investment ▪ This programme is used for external issuance purposes. There is a se
Slide 45: …benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market Dutch Purchasing Managers Index (PMI) showing initial signs of recovery Dutch unemployment rate (%) stable at a low level 70 15 60 10 50 5 40 30 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2013 2014 2015 2016 2017 2018 2019 202
Slide 46: 2Q2024 results overview
2Q2024 results overview In € mln Reported P&L Volatile items P&L excluding volatile items Net interest income 3,830 41 3,789 Net fee and commission income 999 1 999 Investment income 16 4 12 Other income 871 21 850 Total income 5,716 67 5,649 Expenses excl. regulatory costs 2,760 41 2,719 Regulatory
Slide 47: Retail Banking countries contributing to strong returns
Retail Banking countries contributing to strong returns Retail Banking Total Netherlands Belgium1) Germany Spain Italy Australia Poland Romania Türkiye Scale (2Q2024) Customers (mln) 39.2 7.7 2.4 8.9 4.3 1.3 2.9 4.3 1.7 5.6 o.w. primary (mln) 15.6 4.8 1.1 2.8 1.6 0.5 1.1 2.2 0.9 0.6 o.w. mobile prim
Slide 48: Volatile income and expense items
Volatile income and expense items Volatile items (in € mln) 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 WB/FM – valuation adjustments 33 15 -52 16 19 Capital gains/losses -0 0 -25 7 4 Hedge ineffectiveness -46 102 49 -60 39 Other items income1) -6 -88 -16 4 5 Total volatile items – income -21 29 -44 -32 67 I
Slide 49: NII sensitivity on Retail eurozone customer deposits
NII sensitivity on Retail eurozone customer deposits Replicating income on Retail eurozone 3-month EURIBOR forward curves customer deposits Drivers of liability NII Implied interest rates, end-of-period, in bps Interest income in € bln1) ▪ Replicating income represents the 11.6 gross investment retu
Slide 50: Granular customer deposit base
Granular customer deposit base Total customer deposits per segment (in € bln) ▪ Highly insured, granular and continuously growing customer 678 664 650 675 693 deposits represent a strong funding 39 base 65 45 61 41 58 26 62 37 68 113 116 118 118 120 ▪ ~70% of total deposits is from private individua
Slide 51: Accounting asymmetry impacting net interest income
Accounting asymmetry impacting net interest income Treasury interest rate differential (in € mln) Wholesale Banking Financial Markets (in € mln) 383 356 36 24 359 375 23 17 21 197 474 515 261 273 242 233 385 408 193 216 47 28 39 70 50 -225 -219 -172 -215 -73 -58 -249 -61 -160 -209 2Q2023 3Q2023 4Q20
Slide 52: 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 1Q2024 2Q2024 Economies’) to the consolidation of our subsidiary in Türkiye, Profit or loss effective as of 1 Janu
Slide 53: 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 ar