Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (May 2022)
41 slides from Ing Groep's debt investor presentation, May 6, 2022
Slide 1: ING Credit Update 1Q2022
ING Credit Update 1Q2022 ING Investor Relations 6 May 2022
Slide 2: Key points
Key points ▪ Pre-provision profit was strong, supported by resilient NII, with the pressure on liability income turning into a tailwind, strong fees and lower expenses ▪ We continue our support for the green transition, as evidenced by growth of our renewable energy financing and an increasing numbe
Slide 3: Strong pre-provision profit
Strong pre-provision profit Pre-provision result excl. volatile items* and regulatory costs ▪ 1Q2022 pre-provision result excluding volatile items and (in € mln) regulatory costs increased both YoY and QoQ 2,335 ▪ NII (excl. TLTRO III) was resilient, reflecting also the effect of 2,216 rising intere
Slide 4: Financing the green transition
Financing the green transition ▪ We see the green transition as both a necessity and a ▪ In support of the green transition in Retail Banking, we have growth opportunity, as also reflected in our financing of introduced a green residential mortgage in the Netherlands renewable power generation* ▪ In
Slide 5: We further improved our most used and efficient channel
We further improved our most used and efficient channel Mobile-only active customers (in mln)* ▪ To further improve our customer experience and drive value, we introduced several new digital propositions in 1Q2022 52% ▪ In Spain, instant lending was launched for new clients, with 51% pricing and ris
Slide 6: Business profile
Business profile 6
Slide 7: 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 8: 1Q2022 results
1Q2022 results 8
Slide 9: Resilient NII; 4-quarter rolling average NIM at 137 bps
Resilient NII; 4-quarter rolling average NIM at 137 bps Net interest income (in € mln) Net Interest Margin (in bps) 3,513 3,340 3,388 3,374 3,415 233 83 84 84 82 146 140 140 139 3,280 3,257 3,304 3,290 3,333 137 142 138 137 137 136 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 1Q2021 2Q2021 3Q2021 4Q2021 1Q202
Slide 10: Sustained mortgage growth in Retail, repayment of short-term facilities in WB
Sustained mortgage growth in Retail, repayment of short-term facilities in WB Customer lending 1Q2022 (in € bln) Core lending growth €0.4 bln 2.3 -0.3 -1.6 1.7 -3.3 1.1 1.2 -0.3 633.9 632.8 0.6 -0.2 4Q2021 Retail NL Retail Retail Retail Other WB Lending WB DB&TF* WB Other* Lease / WUB Treasury FX /
Slide 11: Fee income growth continued
Fee income growth continued Net fee & commission income per business line (in € mln) Net fee & commission income per product category (in € mln) 882 925 933 882 925 933 854 855 854 855 105 140 112 322 324 113 130 278 302 295 267 284 248 247 261 278 232 247 269 275 265 220 253 232 219 295 322 338 336
Slide 12: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Excluding regulatory costs and incidental items, expenses were 2.1% lower YoY, as a lower number of FTE and lower IT 3,016 2,947 costs more than offset CLA increases and salary indexation 2,945 2,685 385 ▪ Sequentially, expenses excluding regula
Slide 13: Good quality loan book, risk costs elevated by Stage 2 provisions for Russia
Good quality loan book, risk costs elevated by collective Stage 2 provisions for Russia-related exposure Risk costs per business line (in € mln) Stage 2 ratio Stage 3 ratio 987 7.2% 7.0% 6.7% 6.3% 6.0% 6.0% 5.8% 5.6% 939 5.3% 5.2% 346 5.9% 1.8% 1.8% 1.7% 1.7% 223 5.2% 1.6% 30 216 4.9% 4.7% 39 4.6% 1
Slide 14: We actively reduce our Russia-related exposure
We actively reduce our Russia-related exposure Total Russia-related exposure* Onshore exposure* and equity Offshore exposure* (in € bln) (in € bln) (in € bln) 6.7 5.8 5.3 4.5 1.3 1.3 0.2 0.1 28 February** 30 April 28 February** 30 April 28 February 30 April Equity Russian subsidiary ▪ Since the end
Slide 15: ING Group financial ambitions
ING Group financial ambitions Actual 2021 Actual 1Q2022 Financial ambitions ~12.5%* Capital ▪ CET1 ratio (%) 15.9% 14.9% (Basel IV) ▪ ROE (%)** 9.2% 8.0% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 60.5% 60.5% 50-52% Distribution ▪ Distribution (per share) €0.89*** 50% pay-out ratio****
Slide 16: Capital
Capital 16
Slide 17: Risk-weighted assets increased in 1Q2022
Risk-weighted assets increased in 1Q2022, reflecting Russia-related rating migration and introduction of floor on Dutch mortgages ING Group risk-weighted assets development (in € bln) Credit RWA €+20.0 bln 4.5 -2.6 334.9 8.7 2.2 6.0 313.1 2.1 1.0 4Q2021 FX Volume Risk profile Models, Other Market Op
Slide 18: CET1 ratio decreased to 14.9% as a result of higher risk-weighted assets
CET1 ratio decreased to 14.9% as a result of higher risk-weighted assets. Pro-forma CET1 ratio at 14.5% after additional distribution ING Group Total capital ratio development (in %) +2.7% 19.5% 15.9% +0.1% -0.0% -1.0% +1.8% 14.9% ~12.5% 10.5% 4Q2021 Profit added Other capital RWA 1Q2022 AT1 Tier 2
Slide 19: Buffer to fully-loaded Maximum Distributable Amount remained strong at ~4%
Buffer to fully-loaded Maximum Distributable Amount, including announced CCyB increases, remained strong at ~4% ING Group fully-loaded SREP requirements ▪ ING Group’s fully-loaded CET1 requirement is 10.72% ▪ 4.50% Pillar 1 Requirement (P1R) MDA ▪ 0.98% Pillar 2 Requirement (P2R) restriction MDA lev
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. ▪ Secured funding & senior unsecure
Slide 22: ING meets its TLAC and MREL requirements
ING meets its TLAC and MREL requirements TLAC as % of RWA (and LR) MREL as % of RWA (and LR) 30.3% 30.5% 27.32% 28.08% 0.2% 23.03% 10.9% 10.9% 5.03% 5.24% 5.03% 2.7% 2.7% 1.8% 1.8% 22.29% 22.84% 14.9% 18.00% 14.9% 1Q2022 Requirement 1/1/2022 1Q2022 Requirement 1/1/2022 Requirement 1/1/2024 10.3% 6.7
Slide 23: Long-term debt maturity ladder and issuance guidance
Long-term debt maturity ladder and issuance guidance Issuance guidance 2022 Currency Split ▪ Guidance on HoldCo Senior issuances for 2022 is ~€8-10 bln, HoldCo Senior Tier 2 AT1 subject to balance sheet developments 2% 13% 21% 78% 100% ▪ Covered bonds to be issued from various programmes in 2022 ▪ O
Slide 24: Covered bond funding through various programmes
Covered bond funding through various 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 ▪ Covered bond*: €15.2 bln ▪
Slide 25: 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 takes into account the EU Taxonomy covered bond
Slide 26: 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 increased to €1,008 bln in 1Q2022 ▪ See “Asset Quality” section of this presentation Assets Liabilities 1,008
Slide 27: Robust liquidity position with a 12-month moving average LCR of 138%
Robust liquidity position with a 12-month moving average LCR of 138% Funding mix* ING maintains a sizeable liquidity buffer 31 March 2022 ▪ ING’s funding consists mainly of retail deposits, corporate 4% 2% deposits and public debt 8% Customer deposits (retail) Customer deposits (corporate)** ▪ ING’s
Slide 28: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING as of 5 May 2022 Latest rating actions on ING Group and Bank S&P Moody’s Fitch ▪ Fitch: ING Bank was upgraded to AA- in February 2019. In Stand-alone rating a baa1 a+ November 2021, Fitch affirmed ING Group’s and ING Bank
Slide 29: Asset quality
Asset quality 29
Slide 30: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group Retail Banking Wholesale Banking Lending credit O/S* 1Q2022 Lending credit O/S* 1Q2022 Lending credit O/S* 1Q2022 10% 8% 22% 24% 39% 16% 20% €819 €499 €499 3% €320 bln 5% bln bln bln 9% 51% 5% 17% 9% 61% 65% 22% 14% Retail Banking Re
Slide 31: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S* Wholesale Banking Lending Credit O/S Wholesale Banking excluding Treasury & Other 1% NL 1% 9% Real Estate, Infra & Construction 13% 27% Belux Commodities, Food & Agri 2% 27% TMT & Health
Slide 32: Updated overview exposure related to Russia and Ukraine
Updated overview exposure related to Russia and Ukraine Lending credit outstandings (in € bln) 28 Feb 2022* 31 March 2022 30 April 2022 Lending credit outstandings related to Russia Russian borrower with Russian ownership 5.0 4.2 4.2 Russian borrower with non-Russian ownership 0.3 0.4 0.5 Non-Russia
Slide 33: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 844 4 1 386 7 11 2 3 -7 -7 837 165 -21 237 -32 63 189 173 68 -43 154 8 54 -12 56 -42 8 7 220 101 -110 -95 178 169 -30 -33 -159 135 -125 -86 53 -40 -235 -201 -4 1Q2021 2Q2021 3Q2021
Slide 34: Appendix
Appendix 34
Slide 35: 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)** 31 March 2022 2021 49.9 Share premium 17,105 Other reserves 31,940 Legal and statutory reserves 1,069 €26.5 bln 7.9%* Non-distributable -8,205 23.4 Total 41,909 Accru
Slide 36: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Outstanding (mln)** Reset spread USD* Sep-21 May-27 3.875% 1,000 UST + 286bps USD* Sep-21 May-31 4.250% 1,000 UST + 286bps USD Feb-20 May-29 4.875% 750 UST + 351bps USD*
Slide 37: HoldCo Senior transactions in past 12 months
HoldCo Senior transactions in past 12 months HoldCo Senior Unsecured, EUR issuances ISIN Issue date First call date Maturity Tenor Coupon Issued (€ mln) Reset spread XS2443920249 Feb-22 Feb-26 Feb-27 5NC4 1.25% 1500 3mE + 85 XS2443920751 Feb-22 Feb-30 Feb-31 9NC8 1.75% 1500 3mE + 115 XS2449218093 Fe
Slide 38: 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) 2%2% Interest Only 4% ▪ This programme is used for external issuance purposes. There is a separate €15 b
Slide 39: Benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, which seems unaffected by the increased economic uncertainty Dutch Purchasing Managers Index (PMI) indicating industrial Dutch unemployment rates (%) continue to decrease since growth, but decreased to 58.4 after the invasion of Ukraine August
Slide 40: Volatile items 1Q2022
Volatile items 1Q2022 Volatile items and regulatory costs (in € mln) 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 WB/FM – valuation adjustments 11 11 38 3 -70 Capital gains/losses 36 -2 6 5 26 Hedge ineffectiveness 23 11 7 -24 81 Other items income* 233 155 50 92 -68 Total volatile items – income 303 175 101
Slide 41: 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