ING Groep N.V. · EURONEXT:INGA
ING Groep — Debt Investor Presentation (February 2014)
40 slides from ING Groep's debt investor presentation, Feb 12, 2014
Slide 1: ING Bank Credit update
ING Bank Credit update Amsterdam – 12 February 2013 www.ing.com
Slide 2: Key points
Key points • ING advanced further into end phase of restructuring • State support further reduced and IABF unwound • Further progress on divestment Insurance and Investment Management • ING Insurance on track in preparations for intended IPO in 2014 • Group posted an underlying net profit of EUR 405
Slide 3: ING Group
ING Group ING Bank Credit update 3
Slide 4: ING advanced further into end phase of restructuring
ING advanced further into end phase of restructuring ING made further progress on divestment Insurance/IIM ING Insurance on track in preparations for intended IPO • Divestment ING Insurance/IIM Asia resolved • Implementation of new reporting segmentation that better aligns the businesses of ING Insu
Slide 5: Double leverage covered by (market) value ING US, SulAmerica and ING Insurance
Double leverage covered by (market) value ING US, SulAmerica and ING Insurance Group double leverage comfortably covered by (market) value ING U.S., SulAmerica and ING Insurance (in EUR bln) 4.8 -0.8 1.0 5.0 -3.7 -0.1 -0.3 3Q13 Sale of 15% Stake in Debt/Equity 4Q13 57% MV ING Stake in Balance stake
Slide 6: ING Insurance will be appropriately capitalised at the intended IPO
ING Insurance will be appropriately capitalised at the intended IPO ING Insurance gross debt and cash capital (in EUR bln) The capital position of ING Insurance is assessed on solvency, leverage and holding company buffer 4.9 • Currently all operating entities are adequately 3.9 3.9 capitalized • Ho
Slide 7: ING Group posts underlying net profit of EUR 3,255 mln in FY 2013
ING Group posts underlying net profit of EUR 3,255 mln in FY 2013 Underlying net result ING Group (in EUR mln) Net result ING Group (in EUR mln) 1,804 1,482 1,078 978 794 788 539 405 163 101 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q13 Divestments, discontinued operations and special items (in
Slide 8: ING Bank
ING Bank ING Bank Credit update 8
Slide 9: ING Bank has strong positions in resilient northern European home markets
ING Bank has strong positions in resilient northern European home markets Strong positions in European home markets ING Bank total underlying income 2013 (EUR mln) Netherlands 1,872 184 Belgium 5,200 Germany EUR Rest of Europe 3,476 15,305 Rest of World mln Other 1,514 3,060 Lending portfolio 2012 (
Slide 10: ING Bank has key strengths to support our success
ING Bank has key strengths to support our success Strong capital generation Strong retail deposit gathering ability* (in EUR bln) Core Tier 1 ratio 389 11.9% 11.7% 381 338 355 321 9.6% 7.8% 2009 2011 2012 2013 2009 2010 2011 2012 2013 Conservative funding mix Attractive Loan-to-Deposit Ratio* Per 31
Slide 11: ING Bank results
ING Bank results ING Bank Credit update 11
Slide 12: ING Bank posted another solid quarter
ING Bank posted another solid quarter Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 1,730 1,762 1,655 1,464 1,169 1,147 1,103 904 871 283 -589 -561 -616 -552 -560 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q12 4Q12 1Q13 2Q13 3Q13 4Q13 • I
Slide 13: Net interest margin increased further to 145 bps
Net interest margin increased further to 145 bps Underlying interest margin by quarter (in bps) Financial Markets contribution to NIM can be volatile 3,006 2,936 2,946 Financial markets impact on NIM Q-on-Q (in bps) 2,867 2,916 2 134 138 142 144 145 0 -1 -2 -3 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13
Slide 14: Net lending increased in both Retail and Commercial Banking
Net lending increased in both Retail and Commercial Banking Lending Assets ING Bank (EUR bln)* Retail Banking: EUR +1.6 bln Commercial Banking: EUR +0.4 bln 1.5 1.5 -1.2 0.8 -0.7 -3.6 493.8 -1.8 1.1 0.8 -2.8 489.4 30/09/13 Retail NL Retail Retail Retail CB CB CB CB Transfers/ FX 31/12/13 Belgium Ger
Slide 15: Operating expenses remain flat
Operating expenses remain flat Underlying operating expenses (in EUR mln) Expenses flat over the years (in EUR mln) 0.5% 175 149 8,745 8,638 8,694 ~8,700 2,165 2,133 2,090 2,120 2,202 2011 2012 2013 2015 4Q12 1Q13 2Q13 3Q13 4Q13 Ambition Expenses Dutch bank tax • Underlying expenses rose 0.5% from 4
Slide 16: Restructuring programmes on track to reach cost savings of EUR 880 mln by 2015
Restructuring programmes on track to reach cost savings of EUR 880 mln by 2015 Restructuring programmes (in EUR mln) Remaining Total cost Total FTE Cost savings cost savings savings reduction Announced achieved by 2015 by 2015 by 2015 Retail Banking NL 3Q11/4Q12 279 151 430 4,100 Retail Banking NL 4
Slide 17: ING Bank asset quality
ING Bank asset quality ING Bank Credit update 17
Slide 18: A well diversified loan book
A well diversified loan book Residential mortgages* (in EUR bln) Other retail lending* (in EUR bln) Commercial Banking* (in EUR bln) 7 47 18 30 30 64 EUR 138 EUR EUR 277 bln 119 bln 169 bln 62 7 55 16 6 31 30 25 Netherlands Business lending Netherlands Structured Finance Belgium Other lending Nether
Slide 19: Risk costs down versus 4Q12, slightly up from 3Q13
Risk costs down versus 4Q12, slightly up from 3Q13 Underlying additions to loan loss provisions Underlying additions to loan loss provisions (in EUR mln and bps of avg RWA) (in EUR mln) 616 552 560 589 5 15 561 552 560 13 35 28 47 89 83 85 71 81 80 81 30 94 79 82 70 32 126 138 82 82 4Q12 1Q13 2Q13 3
Slide 20: NPL ratio increased slightly to 2.8%
NPL ratio increased slightly to 2.8% Non-performing loans (in EUR and %) NPL ratio (in %) 4Q13 3Q13 2.8 2.7 2.8 2.6 Retail Banking 2.5 - Dutch Mortgages 1.9 1.8 - Business Lending NL 7.5 7.0 - Retail Belgium 3.2 3.2 - Retail International 1.5 1.6 14.9 15.2 16.2 15.7 15.9 Commercial Banking - Structu
Slide 21: Provisions continue to exceed write-offs
Provisions continue to exceed write-offs Net provisions have structurally outweighed write-offs Coverage ratio has improved (in EUR bln) (in EUR bln) 3.0 4Q12 3Q13 4Q13 2.3 Stock of 2.1 5.5 5.9 6.2 1.8 provisions 1.7 1.7 1.6 1.3 1.2 1.2 1.3 0.7 Non-performing 14.9 15.7 15.9 loans 2008 2009 2010 2011
Slide 22: Risk costs Retail Banking Netherlands remain elevated
Risk costs Retail Banking Netherlands remain elevated Risk costs Dutch mortgages and Business Lending NL Non-performing loans Dutch mortgages and Business (in EUR mln) Lending NL (in EUR bln) 82 82 2.6 33 82 81 2.4 2.5 2.1 2.3 148 126 138 121 112 2.0 2.2 2.3 1.9 1.9 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q1
Slide 23: Risk costs Real Estate Finance further down
Risk costs Real Estate Finance further down Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (31 Dec 2013)* (in EUR bln) 111 112 11% Netherlands 103 5% Spain 83 71 5% Italy 5% EUR France 25 bln 59% UK 6% Americas 9% Other 4Q12 1Q13 2Q13 3Q13 4Q13 Non-performing loans Ris
Slide 24: Investment book maintained for liquidity purposes
Investment book maintained for liquidity purposes Investment portfolio per 31 December 2013 Government bonds per 31 December 2013 20% Germany EUR 97 bln 27% Netherlands EUR Belgium 8 56 bln France 4% 14 24% GIIPS 7% 18% Other 18 GIIPS debt securities per 31 December 2013 2.3 0.5 Italy EUR 1.1 Irelan
Slide 25: ING Bank capital, liquidity and funding
ING Bank capital, liquidity and funding ING Bank Credit update 25
Slide 26: ING Bank is already meeting CRD IV requirements
ING Bank is already meeting CRD IV requirements Priorities for 2012-2013 set at the IR Day in January 2012 Strong retail deposit gathering ability and low Loan-to-Deposit ratio (in EUR bln) Accelerate transition to Basel III 389 Limit balance sheet growth 348 Execute balance sheet optimisation
Slide 27: Capital position remains strong despite higher RWAs
Capital position remains strong despite higher RWAs ING Bank core Tier 1 ratio (in %) -0.4% -0.5% 0.2% -0.9% 10.8% 11.9% 12.4% 11.7% 9.6% 10.0% fully loaded 4Q11 4Q12 3Q13 Dividend to RWA Net profit 4Q13 Impact Pro-forma Group CRD IV at CRD IV implementation • ING Bank’s core Tier 1 ratio remains st
Slide 28: Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.0%
Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.0% Impact CRD IV 4Q2013 (pro-forma) (EUR bln) CRD IV core Tier 1 ratio Core Tier CT1 • CRD IV started on 1 January 2014, 1 capital RWAs ratio including the first tranche of the phased-in impact. 31 Dec 2013 33.1 282.5 11.7% • Pro-forma impact at imp
Slide 29: Strong capital base and a sizeable capital buffer
Strong capital base and a sizeable capital buffer Total capital (in EUR million) ING Bank total Risk Weighted Assets (in EUR billion) 343 15.3% 321 16.9% 16.5% 46,190 12.8% 279 283 9,813 7,142 8,263 8,263 9 11,870 6,774 35 8,438 5,122 5,122 7,085 33,200 33,110 32,805 238 30,894 24,934 2008 2010 2012
Slide 30: Deposits are the primary source of funding
Deposits are the primary source of funding Continued growth in deposits Total liabilities (31 December 2013, in %) • 60% of the balance sheet is funded by customer deposits 15% 4% • 84% of funds entrusted is retail based 8% • ING continued to grow its deposits base even in crisis 13% years Other Equ
Slide 31: Long-term debt issuance has increased over time
Long-term debt issuance has increased over time Long-term funding increased Short-term professional funding reduced (in EUR bln) (in EUR bln) 65 67 52 79 94 86 58 44 41 84 37 73 72 21 21 18 39 27 16 15 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Subordinated loans Long-term debt Interbank CD/C
Slide 32: ING Bank has modest long-term funding needs
ING Bank has modest long-term funding needs Maturity ladder outstanding long-term debt 31 December 2013 (EUR million) Issued Maturing 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 > 2022 ING Bank Senior debt ING Bank Covered bonds ING B
Slide 33: Wrap up
Wrap up Strong capital generation Continued retail deposit gathering* (in EUR bln) Core Tier 1 ratio 11.9% 11.7% 381 389 338 355 9.6% 321 7.3% 2008 2010 2012 2013 2009 2010 2011 2012 2013 A healthy balance sheet Sound liquidity ratios • Total capital buffer of EUR 46 billion 2011 2012 2013 • Core ti
Slide 34: Appendix
Appendix ING Bank Credit update 34
Slide 35: Pro-forma ING Group capital structure at 31 December 2013
Pro-forma ING Group capital structure at 31 December 2013 Pro-forma - ING Group 31 December 2013 ING Bank 32 Equity 44 ING Insurance 14 Minority Interest U.S. 4 ING U.S. 10 CT1 securities 2 HybridsB 5 Core Debt 5 HybridsI 2 Hybrids 7 64 64 ING Bank ING Insurance (ING V) consolidated Insurance ING U.
Slide 36: Capital position strengthened in advance of intended ING Insurance IPO
Capital position strengthened in advance of intended ING Insurance IPO ING Insurance gross debt and cash capital (in EUR bln) Solvency I ratio NN Life, based on DNB Swap curve (in %) 234% 4.9 23% 221% 3.9 3.9 15% 183% 1.4 0.5 0.6 0.8 3Q13 4Q13 4Q13 Pro-forma* 3Q13 Capital Capital 4Q13 4Q13 Pro- gene
Slide 37: ING Insurance will be appropriately capitalised at the intended IPO
ING Insurance will be appropriately capitalised at the intended IPO The capital position of ING Insurance is assessed on solvency, leverage and holding company buffer • Currently all operating entities are adequately capitalized • Holding company 4Q13 pro-forma cash capital position was EUR 0.8 bln
Slide 38: ING reached agreement to make Defined Benefit Pension Fund financially independent
ING reached agreement to make Defined Benefit Pension Fund financially independent Pension agreement will have strong benefits for ING* Financial impact in 1Q14* • ING Group will be released from all financial P/L impact (after tax) (in EUR bln) obligations under the closed Dutch Defined Benefit pen
Slide 39: Early signs of stabilisation Dutch economy and housing market
Early signs of stabilisation Dutch economy and housing market Dutch Purchasings Managers Index (PMI) rose to 55.8 in Dutch unemployment rate (%) has remained stable at September. Above 50 indicates positive growth around 7% in the past 5 months 70 15,0 12.0% 60 57.0 12,5 50 10,0 7.0% 40 7,5 30 5,0 2
Slide 40: Disclaimer
Disclaimer 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, the same accounting principles are applied as in the 3Q2013 ING Group Interim Acco
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