ING Groep N.V. · EURONEXT:INGA
ING Groep — Debt Investor Presentation (August 2013)
41 slides from ING Groep's debt investor presentation, Aug 9, 2013
Slide 1: ING Bank Credit update
ING Bank Credit update Amsterdam – 9 August 2013 www.ing.com
Slide 2: Key points
Key points • Good progress on restructuring • U.S. IPO launched • Double leverage reduced to EUR 4.4 bln • Relevant parts of WUB transferred to Nationale-Nederlanden Bank • Bank posted another strong quarter, with a pre-tax result of EUR 1,147 mln, supported by an improvement of the net interest mar
Slide 3: ING Group
ING Group ING Bank Credit update 3
Slide 4: ING is maintaining momentum in restructuring
ING is maintaining momentum in restructuring Delivering on EC restructuring in 2013 More than EUR 10 bln paid to the Dutch State (in EUR mln) Insurance ING U.S. IPO launched 10,156 3,531 375 375 Sale of part of SulAmerica and KB Life closed 2,406 375 750 750 750 Sale of CMF, additional part of
Slide 5: Group holding double leverage strongly reduced
Group holding double leverage strongly reduced Group core debt (double leverage) (EUR bln) Share price Voya since IPO (USD) 7.1 -0.8 32.22 -1.8 0.3 -4.5 4.4 -0.5 19.5 -0.2 1Q13 ING U.S. Up- 2Q13 Payment 71% Stake in Pro- IPO 2 May 2 Aug IPO and stream to NN MV US SulAm forma Sale from Bank stake Ban
Slide 6: ING Insurance (ING V) will be the IPO entity
ING Insurance (ING V) will be the IPO entity ING Group ING Bank ING Insurance Insurance ING U.S. (ING Verzekeringen) • ING U.S. will be transferred out of ING Insurance to the Group holding company, clearing the way to use ING Insurance (ING Verzekeringen) as the IPO entity for Insurance Europe • Th
Slide 7: ING Insurance debt will be further reduced
ING Insurance debt will be further reduced ING Insurance (ING V) excl. ING U.S. (30 June 2013) ING Insurance debt (EUR bln) Europe 13.8 Equity 15.2 4.7 -0.1 -0.3 4.3 Asia 4.4 Hybrids Group 2.5 ING Re & Other 1.6 Hybrids Insurance 0.5 IC Debt (US) 0.1 Financial debt 1.7 19.9 19.9 2Q13 IC US Sales CMF
Slide 8: Relevant parts WUB transferred to NN Bank
Relevant parts WUB transferred to NN Bank Relevant parts WUB transferred to Nationale-Nederlanden Bank per 1 July as part of amendments to EC restructuring plan as announced in Nov 2012 • EUR 3.9 bln of mortgages and EUR 0.1 bln of other consumer lending transferred to NN Bank • Retail savings of EU
Slide 9: ING Bank
ING Bank ING Bank Credit update 9
Slide 10: 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 northern European home markets ING Bank total underlying income 2012 (EUR mln) 296 Netherlands 1,741 Belgium 5,160 Germany EUR Rest of Europe 2,893 14,313 Rest of World mln Other 1,293 2,930 Lending portfol
Slide 11: 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 394 11.9% 11.8% 381 338 355 321 9.6% 7.8% 2009 2011 2012 1H13 2009 2010 2011 2012 1H13 Conservative funding mix Attractive Loan-to-Deposit Ratio* Per 30
Slide 12: ING Bank is making clear progress on Ambition 2015
ING Bank is making clear progress on Ambition 2015 Ambition 2015 30 June 2013 /1H13 CRD IV minimum Core Tier 1 • At least ≥10% under CRD IV 10.2% >8%* Leverage • Leverage ratio to increase above 4% (CRD IV) 3.9%** >3% LCR • Liquidity coverage ratio >100% in 2015 >100% >100% Assets • Bala
Slide 13: ING Bank results
ING Bank results ING Bank Credit update 13
Slide 14: ING Bank posted another strong quarter
ING Bank posted another strong quarter Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 1,664 1,730 1,762 1,550 1,169 1,147 1,110 1,011 871 283 -540 -554 -589 -561 -616 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13
Slide 15: Net interest margin rose to 142 bps
Net interest margin rose to 142 bps Underlying interest margin by quarter (in bps) Average B/S remained flat in 2Q13 Bank Balance Sheet (in EUR bln) 2,972 2,916 3,006 2,856 2,867 897 880 857 845 847 861 869 142 851 127 135 134 138 828 830 2Q12 3Q12 4Q12 1Q13 2Q13 B/S end of quarter B/S average • Net
Slide 16: Operating expenses declined further in 2Q13
Operating expenses declined further in 2Q13 Operating expenses (in EUR mln) Underlying cost/income ratio (in %) 80% 175 70% 2,165 2,133 2,044 2,127 2,090 60% 55.2% 54.3% 50% 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 Expenses Dutch bank tax • Expenses rose slightly versus a year ago as the im
Slide 17: Cost-saving programmes on track
Cost-saving programmes on track Restructuring programmes (in EUR mln) Cost Cost Total Total savings savings cost FTE Announced achieved by 2015 savings reduction Retail Banking 3Q11/4Q12 194 430 450 4,100 NL ING Bank 4Q12 20 150 150 1,000 Belgium Bank Commercial 3Q12 65 260 315 1,000 Banking Total 2
Slide 18: ING Bank asset quality
ING Bank asset quality ING Bank Credit update 18
Slide 19: 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) 8 48 15 29 32 62 EUR EUR EUR 287 bln 149 118 bln 170 bln 60 56 12 8 6 30 29 32 Netherlands Business lending Netherlands Structured Finance Belgium Other lending Nether
Slide 20: Risk costs remained elevated in 2Q13
Risk costs remained elevated in 2Q13 Underlying additions to loan loss provisions Underlying additions to loan loss provisions (in EUR mln and bps of avg RWA) (in EUR mln) 616 561 616 589 561 25 540 554 12 47 89 5 35 44 85 81 111 112 77 73 67 42 89 112 39 41 121 112 82 81 2Q12 3Q12 4Q12 1Q13 2Q13 1Q
Slide 21: NPL ratio increased slightly to 2.8%
NPL ratio increased slightly to 2.8% Credit outstandings (30 June 2013) NPL ratio (in %) 2Q13 1Q13 Retail Banking 1% 3% 10% - Dutch Mortgages 1.6 1.5 26% - Business Lending NL 6.4 6.0 5% - Retail Belgium 3.2 3.2 - Retail International 1.6 1.5 EUR Commercial Banking 11% 575 bln 6% - Structured Financ
Slide 22: Provisions continue to exceed write-offs
Provisions continue to exceed write-offs Net provisions have structurally outweighed write-offs Stock of provisions (in EUR bln) (30 June 2013)) Coverage ratio (%) 3.0 2.0 Retail 27.8% 2.1 2.4 Benelux 1.8 1.7 1.7 EUR Retail Banking 62.4% 1.3 1.2 1.2 1.3 5.9 bln International 0.7 0.6 0.5 0.6 0.3 Comm
Slide 23: Risk costs Business Lending NL down versus 1Q13
Risk costs Business Lending NL down versus 1Q13 Risk costs business lending (in EUR mln) Non-performing loans ratio (in %) 148 8 121 121 112 100 7 6.4 6 5 4 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 Business Lending NL (30 June 2013) Risk costs down, but expected to remain elevated Automotiv
Slide 24: Risk costs Real Estate Finance stable from 1Q13
Risk costs Real Estate Finance stable from 1Q13 Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (30 June)* 120 111 112 102 103 11% Netherlands 5% Americas 6% Spain EUR France 6% 52% 29 bln Italy 9% UK 2Q12 3Q12 4Q12 1Q13 2Q13 11% Other Non-performing loans ratio (in %)
Slide 25: NPL ratio Dutch mortgages rose slightly to 1.6%
NPL ratio Dutch mortgages rose slightly to 1.6% Non-performing loans ratio (in %) Risk costs (in EUR mln) 2.0 1.6 82 81 1.5 53 0.9 44 44 1.0 37 33 21 17 0.5 0.0 2Q11 4Q11 2Q12 4Q12 2Q13 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 NPL Dutch Mortgages 90+ days arrears Coverage ratio based on NPL and
Slide 26: LTVs do not reflect additional collateral
LTVs do not reflect additional collateral Dutch mortgage portfolio by product type (%) Interest only (100%) 2% 2% 20% Interest only (mixed) Percentage LTV > 100% for the Interest Only 18% mortgages (excl. NHG) is 11% Investment Life insurance LTV LTV LTV NHG Savings <= 80% 80-100% > 100% Annuity 11%
Slide 27: Investment book maintained for liquidity purposes
Investment book maintained for liquidity purposes Investment portfolio per June 2013 (in EUR bln) Government bonds per June 2013 (in EUR bln) 21% Germany 25% Netherlands EUR Belgium EUR 100 bln 3% 57 bln France 8 7% 26% GIIPS 18% Other 16 GIIPS debt securities per June 2013 (in EUR bln) 19 2.2 0.5 1
Slide 28: ING Bank capital, liquidity and funding
ING Bank capital, liquidity and funding ING Bank Credit update 28
Slide 29: ING Bank is already meeting most CRD IV requirements
ING Bank is already meeting most CRD IV requirements Priorities for 2012-2013 set at the IR Day in January 2012 Balance sheet and RWA reduced strongly (in EUR bln) Accelerate transition to Basel III 974 830 Limit balance sheet and RWA growth Execute balance sheet optimisation Further simplif
Slide 30: Short-term funding reduced while growing deposits
Short-term funding reduced while growing deposits 430 476 • ING continued to grow its deposit base, primarily driven by Retail Banking units Strong • ING will continuously focus on increasing market customer deposit share in corporate and mid-corporate deposits by growth investing to improve its Pay
Slide 31: Strong capital growth and a sizeable capital buffer
Strong capital growth and a sizeable capital buffer Total capital (in EUR million) ING Bank total Risk Weighted Assets (in EUR billion) 343 15.3% 47,687 321 16.9% 16.6% 12.8% 279 278 9,813 7,142 6,451 6,451 9 11,870 6,774 6,812 6,812 36 8,438 7,085 33,200 32,847 34,424 233 30,894 24,934 2008 2010 20
Slide 32: Strong capital position Bank despite dividend to Group
Strong capital position Bank despite dividend to Group ING Bank core Tier 1 ratio (in %) -0.7% -1.1% 0.2% 10.7% 12.3% 11.8% 10.2% fully loaded 1Q13 Dividend to Group Other 2Q13 Impact CRD IV at Pro-forma CRD IV implementation • ING Bank’s core Tier 1 ratio decreased from 12.3% to 11.8% following the
Slide 33: Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.2%
Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.2% Impact CRD IV 2Q2013 (pro-forma) (EUR bln) CRD IV core Tier 1 ratio Core Tier CT1 • DNB has allowed Dutch banks to 1 capital RWAs ratio apply a regulatory adjustment to eliminate the impact of the revised 30 June 2013 (after payment to Group) 32.
Slide 34: ING Bank is well positioned for capital requirements
ING Bank is well positioned for capital requirements Potential capital requirements • The common equity tier 1 capital requirement will be minimum 7% 2.0% • 4.5% common equity tier 1 (CET1) 2.3% • 2.5% capital conservation buffer (CCB) 1.5% • The systemic buffers compile: 2.5% • Global systemic buff
Slide 35: Deposits are the primary source of funding
Deposits are the primary source of funding Continued growth in deposits Total liabilities (30 June 2013, in %) • 57% of the balance sheet is funded by customer deposits 17% 4% • 84% of funds entrusted is retail based 9% • ING continued to grow its deposits base even in crisis 13% years Other Equity
Slide 36: Long-term debt issuance has increased
Long-term debt issuance has increased Subordinated loans and Long-term debt securities in issue ING Bank has a well diversified long term funding mix (in EUR bln) (30 June 2013, in EUR bln) 108 9 9 7 94 91 30 58 32 Senior debt Covered bonds 13 53 State guaranteed Lower tier 2 19 22 21 16 15 RMBS 4Q2
Slide 37: ING Bank has modest long-term funding needs
ING Bank has modest long-term funding needs Maturity ladder outstanding long-term debt 30 June 2013 (EUR million) Issued Maturing 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2011 2012 1H13 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 > 2022 remaining ING Bank Senior debt ING Bank Covered
Slide 38: Wrap up
Wrap up Strong capital generation Continued retail deposit gathering* (in EUR bln) Core Tier 1 ratio 11.9% 11.8% 394 381 338 355 9.6% 321 7.3% 2008 2010 2012 2Q13 2009 2010 2011 2012 2Q13 A healthy balance sheet Sound liquidity ratios • Total capital buffer of EUR 48 billion 2011 2012 1H13 • Core ti
Slide 39: Appendix
Appendix ING Bank Credit update 39
Slide 40: Pro-forma ING Group capital structure at 30 June 2013
Pro-forma ING Group capital structure at 30 June 2013 Pro-forma - ING Group 30 June 2013 ING Bank 34 Equity 50 ING Insurance 15 Minority Interest U.S. 3 ING U.S. 10 CT1 securities 2 HybridsB 7 Core Debt 4 HybridsI 2 Hybrids 9 68 68 ING Bank ING Insurance (ING V) consolidated Insurance ING U.S. RWA 2
Slide 41: 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 2Q2013 ING Group Interim Acco