Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (August 2021)
43 slides from Ing Groep's debt investor presentation, Aug 6, 2021
Slide 1: ING Credit Update 2Q2021
ING Credit Update 2Q2021 ING Investor Relations 6 August 2021
Slide 2: Key points
Key points ▪ We continue to provide support to customers, employees and society in coping with the effects of the Covid-19 pandemic. With vaccination programmes progressing globally, we look forward to return to more normal circumstances ▪ As focus on climate action accelerates, we are well-position
Slide 3: Accelerated focus on climate action strengthens our leading role in financing the transition
Accelerated focus on climate action strengthens our leading role in financing the transition to a low-carbon economy Recent events reiterate the need for We are well-positioned to finance Sustainability deals** (#) the green transition that transition ▪ Impact of extreme weather visible ▪ We have be
Slide 4: Fee growth continued in 1H2021
Fee growth continued in 1H2021 Net fee & commission income per product category (in € mln) ▪ Development of daily banking fees since 2019 was mainly driven by annual increases of ~15% of package fees in Retail Benelux. The YoY development also reflected a recovery of CAGR +11.1% 1,710 payment transa
Slide 5: Business profile
Business profile 5
Slide 6: Well-diversified business mix with many profitable growth drivers
Well-diversified business mix with many profitable growth drivers Retail Banking Market Leaders Wholesale Banking Netherlands, • Focus on earning the Belgium, Luxembourg • Our business model is primary relationship similar throughout our • We use technology to offer global WB franchise a differentia
Slide 7: 2Q2021 results
2Q2021 results 7
Slide 8: Income supported by continued strong fee income
Income supported by continued strong fee income Income (in € mln) ▪ Total income YoY included another strong quarter for fee income, mainly driven by daily banking products 4,671 4,702 ▪ NII included a €83 mln TLTRO III benefit 4,517 4,286 296 ▪ Other income was lower as 2Q2020 benefited from severa
Slide 9: Resilient NII; 4-quarter rolling average NIM at 140 bps
Resilient NII; 4-quarter rolling average NIM at 140 bps Net interest income (in € mln) Net Interest Margin (in bps) 3,513 3,430 3,329 3,344 3,340 233 152 148 83 144 146 140 144 141 142 136 3,280 3,257 138 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 NIM NIM (4-quarter rollin
Slide 10: Sustained mortgage growth, higher repayments in WB
Sustained mortgage growth, higher repayments in WB Customer lending 2Q2021 (in € bln) Core lending businesses: €-3.7 bln 2.2 2.2 -3.6 623.5 0.4 0.5 -1.1 -4.4 -1.4 -0.3 -1.8 616.3 1Q2021 Retail NL Retail Retail Retail Other WB Lending WB Daily WB Other* Run-off Treasury FX / Other** 2Q2021 Belgium Ge
Slide 11: Continued strong fee income
Continued strong fee income Net fee and commission income per business line (in € mln) Net fee & commission income per product category (in € mln) 854 855 854 855 734 771 734 771 723 723 278 302 239 257 253 255 184 211 246 264 219 220 235 278 232 199 221 198 198 206 218 233 284 248 322 203 262 273 2
Slide 12: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Expenses included €39 mln of incidental items, reflecting an IT impairment and some additional redundancy costs. This compares to €310 mln goodwill impairments in 2Q2020 and 137 331 587 €84 mln redundancy and restructuring costs in 1Q2021 310 11
Slide 13: Risk costs remain well below the through-the-cycle average
Risk costs remain well below the through-the-cycle average Risk costs per business line (in € mln) Stage 2 ratio Stage 3 ratio 1,336 8.6% 8.5% 7.6% 7.6% 7.0% 7.0% 7.0% 6.7% 882 1.8% 1.7% 1.8% 1.8% 1.8% 469 7.0% 6.7% 6.6% 6.1% 6.0% 6.4% 1.7% 1.7% 1.6% 208 223 5.8% 1.6% 1.6% 178 145 1.4% 1.4% 1.4% 1.5
Slide 14: ING Group financial ambitions
ING Group financial ambitions Actual 2020 Actual 2Q2021 Financial ambitions ~12.5%* Capital ▪ CET1 ratio (%) 15.5% 15.7% (Basel IV) ▪ ROE (%)** 4.8% 7.7% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 63.2% 62.7% 50-52% Distribution ▪ Distribution (per share) €0.12*** €0.48**** 50% pay-out
Slide 15: Capital
Capital 15
Slide 16: Total risk-weighted assets decreased in 2Q2021
Total risk-weighted assets decreased in 2Q2021, mainly reflecting an improved collateral profile of the loan book ING Group risk-weighted assets development (in € bln) Credit RWA +€1.2 bln 1.4 -1.8 311.0 -0.5 -0.5 5.2 -1.8 -4.4 308.6 1Q2021 FX Volume Overall profile of Models, Other Market Operation
Slide 17: Strong ING Group CET1 ratio at 15.7%, excluding €4,031 mln profit reserved
Strong ING Group CET1 ratio at 15.7%, excluding €4,031 mln profit reserved for distribution ING Group Total capital ratio development (in %) +2.6% 20.2% +1.9% 15.5% +0.2% -0.1% +0.1% 15.7% ~12.5% 10.5% 1Q2021 Profit added Other capital RWA 2Q2021 AT1 Tier 2 2Q2021 Total Basel IV CET1 CET1 ratio to C
Slide 18: Buffer to Maximum Distributable Amount remained strong at ~5%
Buffer to Maximum Distributable Amount remained strong at ~5% ING Group fully-loaded SREP ▪ ING Group’s fully-loaded CET1 requirement is 10.51% ▪ 4.50% Pillar 1 Requirement (P1R) MDA ▪ 0.98% Pillar 2 Requirement (P2R) restriction MDA level ▪ 2.50% Capital Conservation Buffer (CCB) restriction (14.78
Slide 19: ING's distribution plans in 2021 and beyond
ING’s distribution plans in 2021 and beyond ING’s Distribution Policy Distribution in 2021 and beyond ▪ Pay-out ratio of 50% of resilient net profit ▪ We will pay an amount of €1,874 mln (€0.48 per share) on ▪ Net profit adjusted for significant items not linked to the 12 October 2021* consisting of
Slide 20: Funding & liquidity
Funding & liquidity 20
Slide 21: Issuance entities under our approach to resolution
Issuance entities under our approach to resolution Issuance entities Eligible instruments for TLAC/MREL Designated TLAC MREL resolution ING Groep N.V. entity ▪ Own funds (CET1 / AT1 / Tier 2) ✓ ✓ ▪ Senior unsecured debt (> 1 year) ✓ ✓ ▪ Own funds ✓ ✓ ING Bank N.V. ▪ Senior unsecured debt (> 1 year)
Slide 22: ING meets its TLAC and the new intermediary MREL requirements
ING meets its TLAC and the new intermediary MREL requirements TLAC as % of RWA (and LR) MREL as % of RWA (and LR) 28.71% 28.73% 27.87% 27.32% 0.10% 23.03% 0.12% 8.36% 21.03% 8.36% 5.03% 5.03% 2.65% 5.03% 2.65% 5.03% 1.88% 1.88% 22.29% 22.84% 15.73% 16.00% 18.00% 15.73% 2Q2021 Requirement 2Q2021 Requ
Slide 23: Long-term debt maturity ladder and issuance activity year-to-date 2Q2021
Long-term debt maturity ladder and issuance activity year-to-date 2Q2021 Long-term debt maturity ladder (in € bln)* 12 10 8 6 4 2 0 Maturity Issuance 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2030 YTD 2Q21 YTD 2Q21 Covered Bank Senior HoldCo Tier 2 Issuance activity in 2Q2021 ▪ Total issuan
Slide 24: ING's debt issuance programme in 2021
ING’s debt issuance programme in 2021 Group / Bank issuance plan Currency split Senior debt issuance HoldCo Senior ▪ Updated guidance on Holdco Senior issuances for 2021 is ~€5-7bln, subject to balance sheet developments and Covid-19 16% related impacts ▪ ~€4.3bln of Senior HoldCo has been issued in
Slide 25: Other subsidiaries remain active mainly through their covered bond programmes
Other subsidiaries remain active mainly through their covered bond programmes ING Bank N.V. ING Belgium S.A./N.V. ING Bank (Australia) Ltd ING DiBa AG ING Bank Hipoteczny Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured
Slide 26: We issue green bonds to support meeting our sustainability objectives
We issue green bonds to support meeting our sustainability objectives ING’s Green Bond Programme Green Covered Bonds ▪ ING’s Green Bond Framework is aligned with the ICMA Green ▪ As part of our Green Bond Programme, we aim to issue Bond Principles and a Second Party Opinion (SPO) has been covered bo
Slide 27: Strong and conservative balance sheet with customer deposits as primary funding
Strong and conservative balance sheet with customer deposits as the primary source of funding Balance sheet ING Group (in € bln) Well-diversified customer loan book ▪ Balance sheet ING Group decreased to €978 bln in 2Q2021 ▪ See “Asset Quality” section of this presentation Assets Liabilities 981 978
Slide 28: Robust liquidity position with a 12-month moving average LCR of 141%
Robust liquidity position with a 12-month moving average LCR of 141% Funding mix* ING maintains a sizeable liquidity buffer 30 June 2021 ▪ ING’s funding consists mainly of retail deposits, corporate 3% 2% deposits and public debt 7% Customer deposits (retail) Customer deposits (corporate)** ▪ ING’s
Slide 29: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING instruments as of 5 August 2021 Latest rating actions on ING Group and Bank stand-alone S&P Moody’s Fitch ▪ Fitch: ING Bank was upgraded to AA- in February 2019. In Stand-alone rating a baa1 a+ October 2020, Fitch affirme
Slide 30: Asset quality
Asset quality 30
Slide 31: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 2Q2021 2Q2021 2Q2021 7% 13% 23% 20% 37% 15% 20% 3% €784 €497 7% €497 €287 bln bln bln bln 9% 55% 5% 17% 8% 22% 63% 63% 14% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesa
Slide 32: Our lending book is senior and well-collateralised
Our lending book is senior and well-collateralised Residential ▪ Average LTV of 57% with low Stage 3 ratio at 1.2% Mortgages ▪ Risk metrics remained strong, also supported by government schemes €311 bln 8% Consumer Lending ▪ Relatively small book, risk metrics slightly deteriorated 40% €26 bln €784
Slide 33: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 255 299 771 61 80 144 309 219 169 -46 63 428 195 45 -30 -40 -235 36 56 30 -168 2 3 -25 8 290 15 -83 -110 300 189 173 -32 -43 463 124 -95 -125 166 135177 -73 127 54 -4 2Q2020 3Q2020
Slide 34: Retail Consumer Lending and Business Lending
Retail Consumer Lending and Business Lending Consumer Lending – 2Q2021 Lending Credit Outstandings Business Lending – 2Q2021 Lending Credit Outstandings By geography By product By geography By sector 2% 2% 1% 1% 3% 2% 5% 4% 3% 1% 2% 2% 3% 4% 2% 5% 6% 11% 3% 24% 36% 4% 5% 7% 44% 5% 7% €26 bln €26 bln
Slide 35: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (2Q2021)* Lending Credit O/S Wholesale Banking (2Q2021)* 1% NL 1% 11% Real Estate, Infra & Construction 14% 25% Belux Commodities, Food & Agri 23% 2% Germany TMT & Healt
Slide 36: Appendix
Appendix 36
Slide 37: Comfortable buffer to Additional Tier 1 trigger
Comfortable buffer to Additional Tier 1 trigger Buffer to AT1 trigger (in € bln) ING Group available distributable items (in € mln)** 30 June 2021 2020 48.5 Share premium 17,089 Other reserves 32,784 Legal and statutory reserves 2,334 €26.9 bln 8.7%* Non-distributable -9,831 Total 42,376 21.6 Accrue
Slide 38: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Outstanding (€mln)** Issued (€mln) Reset spread USD Feb-20 May-29 4.875% 750 750 UST + 351bps USD* Sep-19 Nov-26 5.750% 1,500 1,500 UST + 434bps USD Feb-19 Apr-24 6.750%
Slide 39: Most recent HoldCo Senior transactions
Most recent HoldCo Senior transactions HoldCo Senior Unsecured, EUR issuances ISIN Issue date First call date Maturity Tenor Coupon Currency Issued (€mln) Spread XS2281155254 Jan-21 Feb-29 Feb-30 9NC8 0.25% EUR 1,500 m/s + 70 XS2258452478 Nov-20 Nov-28 Feb-29 8NC7 0.25% EUR 1,250 m/s + 68 XS20491540
Slide 40: ING Bank's covered bond programme…
ING Bank’s covered bond programme… ▪ ING Bank NV €30 bln Hard and Soft Bullet Covered Bonds programme Redemption type* ▪ UCITS, CRR and ECBC Label compliant. Rated Aaa/AAA/AAA (Moody’s/S&P/Fitch) 3% 3% Interest Only 6% Investment ▪ This programme is used for external issuance purposes. There is a se
Slide 41: …benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, which seems unaffected by the economic uncertainty in the last year In May 2021, the Dutch Purchasing Managers Index (PMI) increased to the highest level in the last 10 years Dutch unemployment rates (%) decreased since August 2020 70 15 60 10
Slide 42: Volatile items 2Q2021
Volatile items 2Q2021 Volatile items and regulatory costs (in € mln) 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 WB/FM – valuation adjustments 87 91 -13 11 11 Capital gains/losses 15 6 3 36 -2 Hedge ineffectiveness 40 43 -59 23 11 Other items income* 40 -230 0 233 155 Total volatile items – income 182 -90 -6
Slide 43: 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