Slide 1: First quarter 2019 results
First quarter 2019 results ING posts 1Q19 net result of €1,119 million Ralph Hamers, CEO ING Group Amsterdam • 2 May 2019
Slide 2: Key points
Key points • ING posted 1Q19 net profit of €1,119 mln • Primary customers increased by 150,000 to 12.6 mln, growth mainly in Australia and Germany • We recorded net core lending growth of €8.7 bln in the quarter; net customer deposit inflow amounted to €4.8 bln • Furthermore, results were supported
Slide 3: Key value accelerators
Key value accelerators Grow primary customers Increase cross-buy Improve cross-border scalability in Retail and Wholesale leveraging own, partners’ and third parties’ products Faster time-to-volume Benefit from attractive Enhance sustainability profile funding and lending mix to increase opportuniti
Slide 4: Our focus on primary customers and digital drives value
Our focus on primary customers and digital drives value New target to reach 16.5 mln primary customers* by 2022 Core lending Customer deposits 1Q19 net growth 1Q19 net growth 29.2% 30.5% 32.8% 32.9% 12.6 >16.5 € +8.7 bln € +4.8 bln 11.4 12.5 10.4 Net promoter scores (NPS) # of digital interactions**
Slide 5: New innovative solutions in the Payments and DLT space
New innovative solutions in the Payments and DLT space Instant payments launched in the Netherlands and Belgium Main DLT* initiatives of ING in the trade space • ING joined a consortium with MineHub to develop a blockchain- instant based platform that would help our clients in the metals and mining
Slide 6: We are recognised as an industry leader in sustainability
We are recognised as an industry leader in sustainability Strong sustainability deal activity in 1Q19 Recognition • In 1Q19, ING has supported the issuance of 12 sustainable bond transactions, leading to a significant improvement in Ranked 9th and In January 2019, our Green Bond league table positio
Slide 7: 1Q19 results
1Q19 results 7
Slide 8: Pre-tax result reflects solid income and higher but still relatively low risk costs
Pre-tax result reflects solid income and higher but still relatively low risk costs Underlying pre-tax result (in € mln) Total underlying income (in € mln) 2,022 2,124 4,484 4,646 4,501 4,576 4,457 1,686 1,692 1,582 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 • 1Q19 underlying result before ta
Slide 9: NII improved year-on-year; 4-quarter rolling NIM at 154 bps
NII improved year-on-year; 4-quarter rolling NIM at 154 bps Net interest income excl. Financial Markets (FM) Net interest margin remained resilient in 1Q19 (in € mln) (in bps) +2.8% 3,470 3,459 3,364 3,391 156 3,300 154 154 153 155 152 152 153 154 151 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q1
Slide 10: Well-diversified net core lending growth in 1Q19
Well-diversified net core lending growth in 1Q19 Customer lending ING Group 1Q19 (in € bln) Core lending businesses: €8.7 bln 3.0 610.3 -0.1 2.2 2.5 1.5 -0.3 2.2 1.0 0.2 596.7 1.4 31/12/18 Retail Retail Retail Retail WB Lending WB Daily WB Other* Lease run- Treasury FX / 31/03/19 NL Belgium Germany
Slide 11: Resilient fee income development; challenging quarter for FM
Resilient fee income development; challenging quarter for FM Net fee and commission income (in € mln) Underlying income Financial Markets (in € mln) +2.1% 717 720 704 258 675 241 661 27 213 196 295 281 295 262 176 280 154 164 64 104 149 157 156 159 159 183 252 274 259 249 256 104 112 92 77 30 -19 -8
Slide 12: Retail Benelux cost savings underpin well-controlled cost base
Retail Benelux cost savings underpin well-controlled cost base Underlying operating expenses (in € mln) Regulatory costs* (in € mln) 515 493 515 493 266 98 91 266 2,193 2,249 2,216 2,303 2,272 98 91 1Q18 2Q18 3Q18 4Q18 1Q19 1Q 2Q 3Q 4Q Expenses excl. regulatory costs Regulatory costs 2018 2019 • Exp
Slide 13: Risk costs up YoY, but remain below through-the-cycle average
Risk costs up YoY, but remain below through-the-cycle average Risk costs (in € mln) Stage 3 ratio 215 242 1.8% 207 1.7% 50 1.7% 115 107 1.6% 71 1.7% 1.6% 1.6% 1.6% 1.6% 85 63 107 82 84 1.6% 1.6% 62 72 40 42 1.5% 1.5% 47 32 46 45 -13 11 -21 1.4% 1.4% -10 -52 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q
Slide 14: ING Group CET1 ratio up at 14.7% supported by Kotak sale
ING Group CET1 ratio up at 14.7% supported by Kotak sale ING Group CET1 ratio development* 14.5% +0.1% +0.2% 0.0% 14.7% ~13.5% 11.81%*** 4Q18 Group CET1 Profit added to CET1** Kotak Mahindra RWA & Other 1Q19 Group CET1 Basel IV CET1 ambition Bank sale (excl. Kotak impact) CET1 ratio Basel IV & TRIM
Slide 15: Consistent focus on creating operating leverage
Consistent focus on creating operating leverage Roadmap from current market positions Retail Retail Benelux Challengers & Growth Markets Wholesale Banking Financial ambitions Focus on profitable Income lending and fee income Cost discipline focus; Costs some increases in markets that grow Efficiency
Slide 16: ING Group financial ambitions
ING Group financial ambitions Actual 2018 Actual 1Q19 Financial ambitions ~13.5%* • CET1 ratio (%) 14.5% 14.7% (Basel IV) Capital • Leverage ratio (%) 4.4% 4.4% >4% • Underlying ROE (%)** 11.2% 11.0% 10-12% (IFRS-EU Equity) Profitability • Underlying C/I ratio (%)** 54.8% 55.0% 50-52% Dividend • Div
Slide 17: Wrap up
Wrap up 17
Slide 18: Wrap up
Wrap up • ING posted 1Q19 net profit of €1,119 mln • Primary customers increased by 150,000 to 12.6 mln, growth mainly in Australia and Germany • We recorded net core lending growth of €8.7 bln in the quarter; net customer deposit inflow amounted to €4.8 bln • Furthermore, results were supported by
Slide 19: Appendix
Appendix 19
Slide 20: WB reporting aligned with new structure following strategic review
WB reporting aligned with new structure following strategic review WB reporting structure until 4Q18 WB reporting structure per 1Q19 • Project & Asset-based Finance • Project & Asset-based Finance Industry incl. Trade & Commodity Finance excl. Trade & Commodity Finance Lending • Real Estate Finance
Slide 21: 1Q19 pre-tax result positively impacted by volatile items
1Q19 pre-tax result positively impacted by volatile items Underlying pre-tax result Volatile items and regulatory costs Pre-tax result excl. volatile items (in € mln) (in € mln) and regulatory costs (in € mln) 1Q18 2Q18 3Q18 4Q18 1Q19 WB/FM – valuation 2,022 2,124 13 3 -13 -4 -58 2,097 2,111 2,175 1
Slide 22: Group CET1 ratio at 14.7% and underlying ROE at 11.0%
Group CET1 ratio at 14.7% and underlying ROE at 11.0% Group CET1 ratio development during 1Q19 Group underlying ROE calculation in 1Q19 (amounts in € bln and %) (in € mln) Capital RWA Ratio Change As of 31 March 2019 Actuals 31 December 2018 45.4 314.1 14.5% IFRS-EU shareholders’ equity 52,788 Net p
Slide 23: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 7% 4% 1% 26% 15% 35% 29% €681 3% €442 €239 bln bln bln 65% 66% 17% 10% 9% 13% Retail Banking Mortgages Netherlands Lending Wholesale Banking Other lending Netherlands Daily Banking & Trade Finance
Slide 24: Granular Wholesale Banking lending credit outstandings by geography and sector
Granular Wholesale Banking lending credit outstandings by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (1Q19)* Lending Credit O/S Wholesale Banking (1Q19)* 1% NL 4% 14% Real Estate, Infra & Construction 7% 18% Belux 17%
Slide 25: Detailed Stage 3 disclosure on selected portfolios
Detailed Stage 3 disclosure on selected portfolios Selected portfolios (in € mln) Lending credit Stage 3 ratio Lending credit Stage 3 ratio Lending credit Stage 3 ratio O/S 1Q19 1Q19 O/S 4Q18 4Q18 O/S 1Q18 1Q18 Wholesale Banking 238,992 1.4% 236,248 1.4% 221,882 1.8% Lending 157,262 1.4% 153,260 1.5
Slide 26: Overview Turkey exposure
Overview Turkey exposure Total exposure ING to Turkey* (in € mln) Lending Credit O/S by currency 1Q19 4Q18 Change 2% 16% Lending Credit O/S Retail Banking 5,189 5,709 -9.1% USD Residential mortgages 573 595 -3.7% 37% EUR TRY Consumer lending 1,243 1,355 -8.3% Other 45% SME/Midcorp 3,373 3,760 -10.3%
Slide 27: 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