ING Groep N.V. · EURONEXT:INGA
ING Groep — Bernstein Strategic Decisions Conference 2012
34 slides from ING Groep's conference presentation, Sep 20, 2012
Slide 1: Retail Banking Benelux
Retail Banking Benelux Bernstein Strategic Conference Hans van der Noordaa CEO Retail Banking Benelux London – 20 September 2012 www.ing.com
Slide 2: Key points
Key points • ING Bank continues to show solid results, strongly supported by Retail Benelux • ING is a leading Retail Bank in the Benelux with an RoE of 17.9% in 1H12 • Retail Banking Benelux has contributed significantly to balance sheet optimisation • Focus on retail deposits allows us to continue
Slide 3: ING Bank posted robust results despite higher provisioning
ING Bank posted robust results despite higher provisioning Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 6,742 5,289 5,579 4,238 5,099 -546 3,224 3,102 -982 2,843 2,678 -1,341 2,120 -1,453 -2,256 2009 2010 2011 1H11 1H12 2009 2010 2011 1H11
Slide 4: Retail Benelux support total Bank result strongly
Retail Benelux support total Bank result strongly Total Bank pre-tax profit 1H12 Total Bank Netherlands Retail Netherlands -1% 21% 20% 36% 64% 80% 7% Private persons/mass 36% Retail Banking Business Banking 11% Commercial Banking Private Banking 26% Total Bank Belgium Retail Belgium 13% 20% 43% 57%
Slide 5: Retail Benelux RoE 17.9% in 1H12
Retail Benelux RoE 17.9% in 1H12 Return on Equity (based on CT-1 ratio of 10%) Recent trends • RoE at 17.9% in 1H12 remains substantially above 10- 19.8% 20.6% 20.8% 13% overall Bank target (based on IFRS EU equity) 19.0% 17.9% 16.7% • Gross result up in 1H12 driven by lower expenses • The increase
Slide 6: Income stable in 1H12 while the cost base was reduced
Income stable in 1H12 while the cost base was reduced Income and expenses Retail Benelux (in EUR mln) Full year First half of the year + EUR 165 mln - EUR 326 mln - EUR 25 mln - EUR 49 mln 6,012 6,177 4,186 3,860 3,091 3,066 1,904 1,855 Income Expenses Income Expenses 2008 2011 1H11 1H12 • Income in
Slide 7: Benelux has been a strong contributor to ING Bank's capital generation
Retail Benelux has been a strong contributor to ING Bank’s capital generation ING Bank core Tier 1 ratio Further strengthening of CT1 ratio 11.1% 0.5% 0.4% 11.9% • The announced sale of ING Direct 9.6% 9.6% Canada and Capital One stake will 7.8% lead to a pro-forma core Tier 1 ratio of 11.9% 2009 20
Slide 8: ING is the leading retail bank in the Benelux
ING is the leading retail bank in the Benelux ING Netherlands ING Belgium • # 2 bank in NL • # 4 bank in Belgium (including Record Bank) • Full universal bank with 8.9 mln customers • Full universal bank with 2.7 mln customers • 280 branches • 779 branches • 14,002 employees • 9,583 employees • Full
Slide 9: ING Retail Benelux well positioned to capture future trends in Retail Banking
ING Retail Benelux well positioned to capture future trends in Retail Banking Converging models For Customers: Easy and fair Broad • Customer centric culture, with care for Product Belgium customers Range Netherlands • Limited number of transparent products, serving all customer needs ING model • Co
Slide 10: Retail Benelux delivering on balance sheet optimisation
Retail Benelux delivering on balance sheet optimisation Bernstein Strategic Conference - 20 September 2012 10
Slide 11: Managing the Bank Balance Sheet more efficiently under Basel III
Managing the Bank Balance Sheet more efficiently under Basel III Balance Sheet stable at EUR 900 bln Ambition 2015 Evolve investment portfolio into ~ EUR 900 bln Strong capital generation to grow into liquidity portfolio and continue to Other Basel III requirements Other de-risk Debt Equity securiti
Slide 12: Retail Benelux contributes strongly to ING Bank's balance sheet optimisation
Retail Benelux contributes strongly to ING Bank’s balance sheet optimisation • In the Netherlands, ING strongly increased the retail deposit base by Focus on EUR 10 billion since year-end 2010 deposit • In Belgium, ING launched successful new products resulting in EUR 6 growth billion higher balance
Slide 13: In the Netherlands, we have selectively grown long-term lending
In the Netherlands, we have selectively grown long- term lending while accelerating funds entrusted Retail Netherlands lending (EUR bln) Retail Netherlands funds entrusted (EUR bln) + EUR 3 bln + EUR 10 bln 42 41 138 143 Other lending 114 104 Mortgages YE 2010 1H2012 YE 2010 1H2012 • Mortgages are a
Slide 14: Funding rich Belgian market allows for asset growth
Funding rich Belgian market allows for asset growth Retail Belgium lending (EUR bln) Retail Belgium funds entrusted (EUR bln) + EUR 10 bln + EUR 6 bln 33 27 74 Other lending 68 26 30 Mortgages YE 2010 1H2012 YE 2010 1H2012 • Balanced growth in mortgages while increasing market • Healthy increase in
Slide 15: Retail Benelux contributed EUR 14 billion to balance sheet integration
Retail Benelux contributed EUR 14 billion to balance sheet integration Balance Sheet integration progressing (EUR bln) Recent initiatives • In 2011, EUR 11 bln of balance sheet 3.0 optimisation was related to Retail Benelux 2.9 0.6 • This was largely driven by transferring 2.4 securitised Dutch mort
Slide 16: Retail Netherlands: maintaining a high RoE
Retail Netherlands: maintaining a high RoE Bernstein Strategic Conference - 20 September 2012 16
Slide 17: ING Retail NL adapted to a changing environment
ING Retail NL adapted to a changing environment Customer Centricity NPS • Easy and transparent product offering 2009 • Converged to distribution model “direct where possible, June '12 advice when needed” -23 • Leverage new technology to improve service levels, proximity and convenience (internet, mo
Slide 18: Retail Netherlands: maintaining a high RoE despite headwinds
Retail Netherlands: maintaining a high RoE despite headwinds Return on Equity (based on CT-1 ratio of 10%) Recent trends • Return on Equity in 1H12 was 15.6% 19.5% 19.1% • Income is under pressure driven by the low 15.6% interest rate environment 13.0% • Risk costs are slowly trending up, largely du
Slide 19: Savings rates are coming down while margins on lending are stable
Savings rates are coming down while margins on lending are stable despite higher funding costs Savings rates are coming down in the Netherlands Margins on lending stable despite higher funding costs • Top savings rate* in the Dutch market increased by • Margins on lending reflect higher funding cost
Slide 20: As retail cost leader in the Netherlands, ING improved its cost advantage
As retail cost leader in the Netherlands, ING improved its cost advantage significantly over the past years Underlying expenses (EUR mln) Cost base is further reduced - 13.4 % • Weakening economic environment, more stringent regulatory requirements and changing customer 2,803 expectations are puttin
Slide 21: Benefits from restructuring programmes go far beyond cost reductions
Benefits from restructuring programmes go far beyond cost reductions Aim is to increase customer centricity and Simplification of Product Offering operational excellence Examples # Retail savings products offered in NL • Product offering has been simplified and made more transparent 62 • Simplificat
Slide 22: ING is the leading internet bank in the Netherlands
ING is the leading internet bank in the Netherlands ING is the leading internet bank ING channel usage: growth in internet usage (in millions) • Internet is the leading channel or usage of sales, with 60% of sales via internet 800 • # of ING customers with an online banking account is still growing
Slide 23: Dutch mortgage market: Despite high LTVs it is less risky than perceived
Dutch mortgage market: Despite high LTVs it is less risky than perceived Dutch Government policies Balanced price growth and shortage of houses • Mortgage interest is tax deductible for a period of • No price boom pre-crisis 30 years • Relatively low level of owner-occupancy • In May 2012, changes h
Slide 24: Dutch mortgages: limited repricing risk while underwriting criteria are more stringent
Dutch mortgages: limited repricing risk while underwriting criteria are more stringent ING NL: 22% market share* (June 2012, outstanding) ING Domestic Bank: Remaining interest period (June 2012) 15% 22% 13% 10% 9% 8% Variable ING NL < 1 year Rabobank 13% 1-3 years ABN AMRO 32% 3-5 years 25% 30% SNS
Slide 25: The NPL ratio for Dutch mortgages stable despite house price declines
The NPL ratio for Dutch mortgages stable despite house price declines Non-performing loans ratio Dutch mortgages (%) Average house prices* (x EUR 1,000) 3.0 - 10.5 % 240 233 226 2.0 219 215 1.0 0.0 4Q08 4Q10 4Q11 1Q12 2Q12 4Q08 4Q10 4Q11 1Q12 2Q12 NPLs 90+ days arrears Risk costs and write offs (EUR
Slide 26: Higher risk costs for Business lending NL driven by more cyclical segments
Higher risk costs for Business lending NL driven by more cyclical segments Business lending portfolio by industry* Risk costs business lending (in EUR mln) 7% 20% Institutions 393 408 15% Transport Construction 320 Real Estate 10% General Industries 183 10% Retail 116 6% Services Food and Beverage 1
Slide 27: Retail Belgium: high RoE business with pockets of growth
Retail Belgium: high RoE business with pockets of growth Bernstein Strategic Conference - 20 September 2012 27
Slide 28: Retail Belgium shares the same strategic direction
Retail Belgium shares the same strategic direction Customer Centricity NPS • Improve service via modern distribution channels 10 • Renewed branch network 5 • Growing client base with high cross-sell ratios, maintaining high NPS 2008 June '12 Operational Excellence • Cost leadership will be a key str
Slide 29: Retail Belgium: high RoE business with good momentum
Retail Belgium: high RoE business with good momentum Return on Equity (based on CT-1 ratio of 10%) Recent trends 26.4% • Return on Equity in 1H12 was 23.4% 23.6% 23.4% • In 1H12, ING Belgium has been steadily 18.5% growing it’s income base • Risk costs have slowly trended down 2009 2010 2011 1H12 Re
Slide 30: Retail Belgium continues to grow its client base and gain market share
Retail Belgium continues to grow its client base and gain market share Net active clients base (x1,000) Recent trends 2,072 2,130 2,210 2,248 • ING Retail Belgium has been consistently 2,010 growing its client base • Driven by its full product range and multi-channel distribution approach • Almost 5
Slide 31: ING Retail Belgium: consistent growth in savings
ING Retail Belgium: consistent growth in savings Retail Belux funds entrusted (EUR bln) Savings ING Bank Belgium (EUR bln*) 75 30 73 25 71 20 69 15 67 65 10 2009 2010 2011 1H12 2007 2008 2009 2010 2011 2012 Funds entrusted* ING Lion Premium Savings Account (strictly online & mobile) ING Orange Savin
Slide 32: A well diversified lending portfolio in Retail Belgium
A well diversified lending portfolio in Retail Belgium A well diversified portfolio Business lending portfolio by industry* 7% 1% 8% Institutions 15% 5% Transport Construction 8% 12% Real Estate EUR 48% General Industries 62.5 bln Mortgages Retail 45% SME/Mid-corporate lending Services Consumer lend
Slide 33: Key points
Key points • ING Bank continues to show solid results, strongly supported by Retail Benelux • ING is a leading Retail Bank in the Benelux with an RoE of 17.9% in 1H12 • Retail Banking Benelux has contributed significantly to balance sheet optimisation • Focus on retail deposits allows us to continue
Slide 34: 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 2011 ING Group Annual Account
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