ING Groep N.V. · EURONEXT:INGA
ING Groep — ING Group — Debt Investor Presentation (November 2016)
24 slides from ING Groep's debt investor presentation, Nov 30, 2016
Slide 1: ING Group Credit Update
ING Group Credit Update www.ing.com Amsterdam • 30 November 2016
Slide 2: Executive summary
Executive summary • ING Bank recorded underlying 3Q16 net profit of EUR 1,336 million • Strong results boosted by steady growth in primary customers (> 400,000 year-to-date), higher net interest income and a relatively low level of risk costs ING Bank/ ING • ING Bank underlying return on equity was
Slide 3: ING Bank
ING Bank 3
Slide 4: Strong third-quarter results reflecting NII growth
Strong third-quarter results reflecting NII growth Underlying pre-tax result ING Bank (in EUR mln) Net interest income excl. Financial Markets (in EUR mln) 2,009 3,247 1,878 200 3,191 1,495 3,124 3,074 1,202 3,040 3,049 1,186 3,011 3,007 2,932 1,808 3Q15 4Q15 1Q16 2Q16 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15
Slide 5: Net interest margin up from 2Q16
Net interest margin up from 2Q16 Business segment contribution to NIM (in bps) NIM trend reflects volatility in FM interest result (in bps) 155 153 153 155 +3 149 151 150 150 +2 150 147 147 149 151 150 146 146 147 148 147 143 2Q16 Retail Banking Financial 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Slide 6: Underlying operating expenses remained stable
Underlying operating expenses remained stable Underlying operating expenses Regulatory costs skewed to first and fourth quarters* (in EUR mln) (in EUR mln) 496 279 260 174 2,141 2,139 2,140 2,157 2,155 105 61 75 65 3Q15 4Q15 1Q16 2Q16 3Q16 1Q 2Q 3Q 4Q Expenses Regulatory costs Redundancy costs 2015
Slide 7: Risk environment benign; NPLs keep trending down
Risk environment benign; NPLs keep trending down Risk costs (in EUR mln) NPL ratio 2015: EUR 1,347 mln 9M16: EUR 836 mln 3.3% 432 3.0% 2.9% 353 173 301 307 265 265 2.6% 2.6% 111 261 2.8% 97 123 2.4% 59 62 97 97 2.3% 117 2.5% 48 40 80 2.2% 66 77 74 67 2.2% 153 16 65 57 140 32 51 2.1% 82 59 49 50 43 1
Slide 8: ING Bank capital ratios and risk-weighted assets
ING Bank capital ratios and risk-weighted assets ING Bank capital ratios* Regulatory capital* and liquidity (in EUR bln) (fully-loaded) 30-Sep 2016 30-Jun 2016 Change 16.5% 16.5% 16.6% 17.4% 17.6% CET1 ratio 12.6% 12.2% 0.3% 3.0% 3.2% 2.7% 3.0% 3.0% Tier 1 ratio 14.6% 14.5% 0.1% 1.9% 2.3% 2.2% 2.0%
Slide 9: ING Group
ING Group 9
Slide 10: ING Group capital ratios and risk-weighted assets
ING Group capital ratios and risk-weighted assets ING Group capital ratios* Regulatory capital* (in EUR bln) (fully-loaded) 30-Sep 2016 30-Jun 2016 Change 17.4% 18.3% 18.5% CET1 ratio 13.5% 13.1% 0.3% 2.7% 3.0% 3.0% 2.2% 2.0% Tier 1 ratio 15.5% 15.4% 0.1% 2.0% Total capital ratio 18.5% 18.3% 0.2% 12
Slide 11: ING Group's 2016 SREP process completed
ING Group’s 2016 SREP process completed ING Group SREP 2016 SREP (Supervisory Review and Evaluation Process) • ING Group has been notified of the European Central Bank (ECB) MDA decision on the 2016 SREP which will set the capital requirements restriction level (11.75%) for 2017 MDA • A 9.0% phased-
Slide 12: Additional Tier 1: comfortable buffers to triggers
Additional Tier 1: comfortable buffers to triggers Buffer to MDA 3Q16 Buffer to Conversion Trigger 3Q16 (in EUR bln) 42.2 EUR 14.1 bln 4.5% EUR 20.3 bln 6.5% 21.9 7% CET1 equity conversion trigger 13.50% 11.75% 3Q16 phased-in CET1 10.25% 9.00% 10.38% 2016 MDA trigger level 3Q16 2016 2017 2018* 2019*
Slide 13: Ambition 2020 - Financial Targets
Ambition 2020 - Financial Targets Actual 9M16 - Group Ambition 2020 – Group* • CET1 ratio (%) 13.5% > Prevailing fully-loaded requirements** Capital • Leverage ratio (%) 4.4% > 4% • Underlying C/I ratio (%) 54.5% 50-52% Profitability • Underlying ROE (%) 9.8% Awaiting regulatory clarity (IFRS-EU Equ
Slide 14: HoldCo resolution strategy
HoldCo resolution strategy 14
Slide 15: New legislation focuses on loss absorbing capacity
New legislation focuses on loss absorbing capacity Loss absorbing capacity • Regulators have added total loss absorbing capacity (TLAC) and (in the EU) minimum own funds and eligible liabilities (MREL) to the post- crisis regulatory reform aimed at ending too-big-to-fail • Regulators are now looking
Slide 16: Loss absorption and recapitalisation overview
Loss absorption and recapitalisation overview Pre-resolution tools Resolution tools Insolvency tools Going concern Recovery PONV Resolution Liquidation • Dividend payments • Dividends, AT1 • Capital instruments • Remaining • Liquidation • AT1 coupon coupons and • Conversion or instruments, through n
Slide 17: ING's preferred approach to resolution
ING’s preferred approach to resolution Current status Resolution entity ING Group • ING has always benefitted from the optionality of having both a HoldCo and an OpCo in place External senior unsecured • Both ING Group and ING Bank are issuing entities External Additional Tier 1 • Historically, ING
Slide 18: Simplified indicative transition and end-state issuance structures
Simplified indicative transition and end-state issuance structures Transition structure End-state structure HoldCo issuance strategy • All external TLAC/MREL-eligible Senior unsecured Senior unsecured debt will be issued by ING Group ING Group creditor ING Group creditor (to be issued over time) (Ho
Slide 19: TLAC requirements are manageable…
TLAC requirements are manageable… “Gap” bridged with ING Group senior ING Group 3Q16 capital position unsecured issuance EUR 16 bln 23.5% 25% 25% 5.0% EUR 58 bln 20% 18.5% 20% 3.0% EUR 42 bln 2.0% 15% 13.5% 15% 10% 10% 5% 5% 0% 0% 3Q16 Group CET1 Group Additional Tier 1* Bank Tier 2* 3Q16 Total Capi
Slide 20: …supported by a recycling strategy of ING Bank instruments
…supported by a recycling strategy of ING Bank instruments Outstanding long-term senior unsecured debt (in EUR bln) 12 8 4 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026 ING Bank senior unsecured debt* ING Group senior unsecured debt • ING Bank has EUR 42.5 billion of long-term senior uns
Slide 21: Issuance entities under our proposed approach to resolution
Issuance entities under our proposed approach to resolution Issuance entities Instruments • Capital instruments ING Group • Senior unsecured debt (TLAC / MREL eligible) • Covered Bonds / secured funding ING Bank • Senior unsecured debt (TLAC / MREL ineligible) • Covered Bonds / secured funding Vario
Slide 22: Appendix I (overview capital instruments)
Appendix I (overview capital instruments) 22
Slide 23: Outstanding capital securities
Outstanding capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Issued Outstanding** USD Dec-00 Dec-10 3M Libor + 360 1,500 522 USD Dec-02 Dec-07 7.200% 1,100 1,100 EUR Jun-03 Jun-13 10yr DSL +50 750 432 USD Oct-03 Jan-09 6.200% 500 500 EUR Ju
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
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