Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Q2 2021 Earnings Presentation
24 slides from Ing Groep's earnings presentation, Aug 6, 2021
Slide 1: Second quarter 2021 results
Second quarter 2021 results ING posts 2Q2021 net result of €1,459 mln Steven van Rijswijk, CEO of ING 6 August 2021
Slide 2: Key points
Key points ▪ We continue to provide support to customers, employees and society in coping with the effects of the Covid-19 pandemic. With vaccination programmes progressing globally, we look forward to return to more normal circumstances ▪ As focus on climate action accelerates, we are well-position
Slide 3: Accelerated focus on climate action strengthens our leading role in financing the transition
Accelerated focus on climate action strengthens our leading role in financing the transition to a low-carbon economy Recent events reiterate the need for We are well-positioned to finance Sustainability deals** (#) the green transition that transition 139 133 ▪ Impact of extreme weather visible ▪ We
Slide 4: Fee growth continued in 1H2021
Fee growth continued in 1H2021 Net fee & commission income per product category (in € mln) ▪ Development of daily banking fees since 2019 was mainly driven by annual increases of ~15% of package fees in Retail Benelux. The YoY development also reflected a recovery of CAGR +11.1% 1,710 payment transa
Slide 5: ING's distribution plans in 2021 and beyond
ING’s distribution plans in 2021 and beyond ING’s Distribution Policy Distribution in 2021 and beyond ▪ Pay-out ratio of 50% of resilient net profit ▪ We will pay an amount of €1,874 mln (€0.48 per share) on ▪ Net profit adjusted for significant items not linked to the 12 October 2021* consisting of
Slide 6: 2Q2021 results
2Q2021 results 6
Slide 7: Income supported by continued strong fee income
Income supported by continued strong fee income Income (in € mln) ▪ Total income YoY included another strong quarter for fee income, mainly driven by daily banking products 4,671 4,702 ▪ NII included a €83 mln TLTRO III benefit 4,517 4,286 296 ▪ Other income was lower as 2Q2020 benefited from severa
Slide 8: Resilient NII; 4-quarter rolling average NIM at 140 bps
Resilient NII; 4-quarter rolling average NIM at 140 bps Net interest income (in € mln) Net Interest Margin (in bps) 3,513 3,430 3,329 3,344 3,340 233 152 148 83 144 146 140 144 141 142 136 3,280 3,257 138 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 NIM NIM (4-quarter rollin
Slide 9: Sustained mortgage growth, higher repayments in WB
Sustained mortgage growth, higher repayments in WB Customer lending 2Q2021 (in € bln) Core lending businesses: €-3.7 bln 2.2 2.2 -3.6 623.5 0.4 0.5 -1.1 -4.4 -1.4 -0.3 -1.8 616.3 1Q2021 Retail NL Retail Retail Retail Other WB Lending WB Daily WB Other* Run-off Treasury FX / Other** 2Q2021 Belgium Ge
Slide 10: Continued strong fee income
Continued strong fee income Net fee and commission income per business line (in € mln) Net fee & commission income per product category (in € mln) 854 855 854 855 734 771 734 771 723 723 278 302 239 257 253 255 184 211 246 264 219 220 235 278 232 199 221 198 198 206 218 233 284 248 322 203 262 273 2
Slide 11: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Expenses included €39 mln of incidental items, reflecting an IT impairment and some additional redundancy costs. This compares to €310 mln goodwill impairments in 2Q2020 and 137 331 587 €84 mln redundancy and restructuring costs in 1Q2021 310 11
Slide 12: Risk costs remain well below the through-the-cycle average
Risk costs remain well below the through-the-cycle average Risk costs per business line (in € mln) Stage 2 ratio Stage 3 ratio 1,336 8.6% 8.5% 7.6% 7.6% 7.0% 7.0% 7.0% 6.7% 882 1.8% 1.7% 1.8% 1.8% 1.8% 469 7.0% 6.7% 6.6% 6.1% 6.0% 6.4% 1.7% 1.7% 1.6% 208 223 5.8% 1.6% 1.6% 178 145 1.4% 1.4% 1.4% 1.5
Slide 13: Strong ING Group CET1 ratio at 15.7%
Strong ING Group CET1 ratio at 15.7% ING Group CET1 ratio development (in %) +0.2% -0.1% +0.1% ~12.5% 15.5% 15.7% 10.5% 1Q2021 Profit added Other capital movements RWA 2Q2021 Basel IV CET1 ratio CET1 ratio to CET1 CET1 ratio ambition Capital ratio Reserved outside of CET1 CET1 developments SREP requ
Slide 14: ING Group financial ambitions
ING Group financial ambitions Actual 2020 Actual 2Q2021 Financial ambitions ~12.5%* Capital ▪ CET1 ratio (%) 15.5% 15.7% (Basel IV) ▪ ROE (%)** 4.8% 7.7% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 63.2% 62.7% 50-52% Distribution ▪ Distribution (per share) €0.12*** €0.48**** 50% pay-out
Slide 15: Wrap up
Wrap up 15
Slide 16: Wrap up
Wrap up ▪ As focus on climate action accelerates, we are well-positioned to finance the investments needed for the transition to a low-carbon economy ▪ Pre-provision result was good, supported by continued strong fee income, the inclusion of the TLTRO III benefit and negative rate charging in NII an
Slide 17: Appendix
Appendix 17
Slide 18: Volatile items 2Q2021
Volatile items 2Q2021 Volatile items and regulatory costs (in € mln) 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 WB/FM – valuation adjustments 87 91 -13 11 11 Capital gains/losses 15 6 3 36 -2 Hedge ineffectiveness 40 43 -59 23 11 Other items income* 40 -230 0 233 155 Total volatile items – income 182 -90 -6
Slide 19: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 2Q2021 2Q2021 2Q2021 7% 13% 23% 20% 37% 15% 20% 3% €784 €497 7% €497 €287 bln bln bln bln 9% 55% 5% 17% 8% 22% 63% 63% 14% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesa
Slide 20: Our lending book is senior and well-collateralised
Our lending book is senior and well-collateralised Residential ▪ Average LTV of 57% with low Stage 3 ratio at 1.2% Mortgages ▪ Risk metrics remained strong, also supported by government schemes €311 bln 8% Consumer Lending ▪ Relatively small book, risk metrics slightly deteriorated 40% €26 bln €784
Slide 21: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 255 299 771 61 80 144 309 219 169 -46 63 428 195 45 -30 -40 -235 36 56 30 -168 2 3 -25 8 290 15 -83 -110 300 189 173 -32 -43 463 124 -95 -125 166 135177 -73 127 54 -4 2Q2020 3Q2020
Slide 22: Retail Consumer Lending and Business Lending
Retail Consumer Lending and Business Lending Consumer Lending – 2Q2021 Lending Credit Outstandings Business Lending – 2Q2021 Lending Credit Outstandings By geography By product By geography By sector 2% 2% 1% 1% 4% 3% 2% 5% 4% 3% 1% 2% 2% 3% 2% 24% 5% 6% 11% 3% 36% 4% 5% 7% 44% 5% 7% €26 bln €26 bln
Slide 23: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (2Q2021)* Lending Credit O/S Wholesale Banking (2Q2021)* 1% NL 1% 11% Real Estate, Infra & Construction 14% 25% Belux Commodities, Food & Agri 23% 2% Germany TMT & Healt
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