Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Q1 2021 Earnings Presentation
26 slides from Ing Groep's earnings presentation, May 6, 2021
Slide 1: First quarter 2021 results
First quarter 2021 results ING posts 1Q2021 net result of €1,005 mln Steven van Rijswijk, CEO of ING 6 May 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 in the near future ▪ At the same time, we continue our efforts
Slide 3: Modular approach to support digital-only, mobile-first strategy
We continue with our modular approach to support our digital-only, mobile-first strategy % of mobile-only active customers* Our Touch Point (TP) technology platform enables the shift from local to scalable business propositions ▪ TP technology offers services and modular components, that 43% enable
Slide 4: Our ESG focus supports a future proof ING and drives long-term value creation
Our ESG focus supports a future proof ING and drives long-term value creation A strong governance structure A focused approach to the A diverse and engaged workforce environmental and social transition drives the right behaviour, delivers on evolving regulatory makes us more adaptive and enables us
Slide 5: Future proofing the business drives performance at ING in Poland
Future proofing the business drives performance at ING in Poland A strong digital proposition… And scoring well on ESG factors… Leading to excellent results Our Moje ING app is amongst the highest A diverse organisation with a high % of Satisfied customers with a continuous rated apps in the banking
Slide 6: Our 10-12% ROE ambition
Our 10-12% ROE ambition Return on Equity and CET1 ratio ▪ We run ING with a long term focus and a through-the-cycle ROE ambition of 10-12% 11.2% ▪ 2020 ROE was affected by several factors, including sizeable incidental expenses and IFRS 9 provisioning 10.1% 10.2% ▪ This quarter had lower risk costs
Slide 7: 1Q2021 results
1Q2021 results 7
Slide 8: Income supported by strong fee income
Income supported by strong fee income Income (in € mln) ▪ Higher total income YoY primarily reflected another strong quarter for fee income, mainly driven by investment products 4,671 4,702 4,511 ▪ NII included a €233 mln TLTRO III benefit as the eligible 4,286 296 loan growth target was met 205 499
Slide 9: TLTRO III target met; 4-quarter rolling average NIM at 142 bps
TLTRO III target met; 4-quarter rolling average NIM at 142 bps Net interest income excl. Financial Markets (FM) (in € mln) Net Interest Margin (in bps) 3,399 3,339 3,402 154 3,246 152 148 3,243 144 146 204 151 144 141 142 138 3,198 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 1Q2020 2Q2020 3Q2020 4Q2020 1Q202
Slide 10: Net core lending largely reflects TLTRO III eligible lending
Net core lending largely reflects TLTRO III eligible lending Customer lending ING Group 1Q2021 (in € bln) Core lending businesses: €17.8 bln -0.3 -1.2 3.2 623.5 7.5 5.8 1.7 1.3 1.5 604.0 0.2 -0.4 4Q2020 Retail NL Retail Retail Retail Other WB Lending WB Daily WB Other* Lease run- Treasury FX / Other
Slide 11: Continued strong fee growth in Retail Banking
Continued strong fee growth in Retail Banking Net fee and commission income per business line (in € mln) Fee & commission income per product category (in € mln) 854 854 783 771 783 771 723 734 723 734 278 239 297 255 210 246 264 253 184 211 219 278 231 199 198 210 206 235 221 198 227 218 233 284 203
Slide 12: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Expenses excluding regulatory costs were up YoY, mainly driven by €84 mln of incidental items, reflecting redundancy and restructuring costs related to the announced measures 137 331 in the Netherlands and the Czech Republic 587 526 111 310 223
Slide 13: Risk costs remain below the through-the-cycle average
Risk costs remain 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% 6.3% 7.0% 1.8% 1.8% 1.8% 1.8% 1.7% 661 882 7.0% 6.7% 6.6% 469 5.9% 6.0% 6.4% 1.6% 1.6% 1.7% 1.7% 1.6% 5.6% 1.4% 1.6% 1.4% 373 223 1.4% 178 145
Slide 14: Strong ING Group CET1 ratio at 15.5%
Strong ING Group CET1 ratio at 15.5% ING Group CET1 ratio development (in %) +0.2% +0.1% -0.2% ~12.5% 15.5% 15.5% 10.5% 4Q2020 Profit added Other capital movements RWA 1Q2021 Basel IV CET1 ratio CET1 ratio to CET1 CET1 ratio ambition Capital ratio Reserved outside of CET1 CET1 developments SREP requ
Slide 15: ING Group financial ambitions
ING Group financial ambitions Actual 2020 Actual 1Q2021 Financial ambitions ~12.5%* ▪ CET1 ratio (%) 15.5% 15.5% (Basel IV) Capital ▪ Leverage ratio (%) 4.8% 4.6% >4% ▪ ROE (%)** 4.8% 5.4% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 63.2% 63.6% 50-52% Dividend ▪ Dividend (per share) €0.1
Slide 16: Wrap up
Wrap up 16
Slide 17: Wrap up
Wrap up ▪ We continue our efforts to build a future proof company for the long term, which is reflected in our focus on continued digitalisation and ESG ▪ Our geographical and product diversification enables us to have stability in income and allows us to capture areas of growth as economies recover
Slide 18: Appendix
Appendix 18
Slide 19: Volatile items 1Q2021
Volatile items 1Q2021 Volatile items and regulatory costs (in € mln) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 WB/FM – valuation adjustments -92 87 91 -13 11 Capital gains/losses 138 15 6 3 36 Hedge ineffectiveness -89 40 43 -59 23 Other items income* -82 40 -230 0 233 Total volatile items – income -125 18
Slide 20: 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 1. The €0.12 dividend per ordinary share**, paid in February ▪ Net profit adjusted for significant items not linked to the 2021, has formally been decl
Slide 21: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 1Q2021 1Q2021 1Q2021 7% 13% 15% 23% 37% 15% 7% €782 20% €496 €496 €286 8% bln bln bln bln 9% 56% 5% 16% 8% 22% 63% 62% 14% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesa
Slide 22: Our lending book is senior and well-collateralised
Our lending book is senior and well-collateralised Residential ▪ Average LTV of 58% with low Stage 3 ratio at 1.3% Mortgages ▪ Risk metrics remained strong, also supported by government schemes €308 bln 9% Consumer Lending ▪ Relatively small book, risk metrics slightly deteriorated 39% €25 bln €782
Slide 23: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 255 299 771 61 261 80 98 144 309 195 422 428 -26 45 -30 -12 -168 219 63 290 30 2 163 169 -46 201 15 300 189 -14 -32 56 463 -95 36 124 -25 8 -83 221 166 135 -73 127 54 1Q2020 2Q2020
Slide 24: Retail Consumer Lending and Business Lending
Retail Consumer Lending and Business Lending Consumer Lending – 1Q2021 Lending Credit Outstandings Business Lending – 1Q2021 Lending Credit Outstandings* By geography By product By geography By sector 2% 2% 1% 1% 4% 3% 2% 5% 4% 3% 1% 2% 1% 3% 2% 5% 6% 10% 3% 25% 36% 4% 5% 7% 44% 5% 7% €25 bln €25 bl
Slide 25: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (1Q2021)* Lending Credit O/S Wholesale Banking (1Q2021)* 1% NL 1% 11% Real Estate, Infra & Construction 17% 18% Commodities, Food & Agri Belux 22% Germany TMT & Healthca
Slide 26: 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