ING Groep N.V. · EURONEXT:INGA
ING Groep — Debt Investor Presentation (November 2013)
38 slides from ING Groep's debt investor presentation, Nov 6, 2013
Slide 1: ING Bank Credit update
ING Bank Credit update Amsterdam – 6 November 2013 www.ing.com
Slide 2: Key points
Key points • ING advanced further into end phase of restructuring • ING Group’s stake in ING U.S. has been further reduced to 57% • Divestment Insurance/IIM Asia almost completed • ING Life Japan will be included in the IPO of ING Insurance • IABF to be unwound; State support further reduced • Group
Slide 3: ING Group
ING Group ING Bank Credit update 3
Slide 4: ING advanced further into end phase of restructuring
ING advanced further into end phase of restructuring ING Group’s stake in ING U.S. further reduced to 57% Group double leverage largely covered by market value ING U.S. and SulAmerica (in EUR bln) • Second tranche ING U.S. sold in October, reducing ING’s stake to 57% 4.8 -0.8 4.0 -3.4 • ING U.S. tra
Slide 5: IABF to be unwound; State support further reduced
IABF to be unwound; State support further reduced Agreement with Dutch State on unwinding of IABF More than EUR 11 bln paid to the Dutch State (in EUR mln) • ING has reached an agreement with the Dutch State on the unwinding of the Illiquid Assets Back-up Facility 11,281 (IABF) 375 3,531 2,781 375 •
Slide 6: ING Life Japan to be included in IPO ING Insurance
ING Life Japan to be included in IPO ING Insurance • Following the sale of ING Life Korea, the divestment of ING Insurance/IM Asia is effectively completed • ING reached an agreement with the EC on revised timelines for European and Japanese Insurance divestments • Scope of ING Insurance IPO will be
Slide 7: ING Bank
ING Bank ING Bank Credit update 7
Slide 8: 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 9: 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 391 11.9% 12.4% 381 338 355 321 9.6% 7.8% 2009 2011 2012 Sep-13 2009 2010 2011 2012 Sep-13 Conservative funding mix Attractive Loan-to-Deposit Ratio* Pe
Slide 10: ING Bank results
ING Bank results ING Bank Credit update 10
Slide 11: ING Bank posted another solid quarter
ING Bank posted another solid quarter Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 1,664 1,730 1,762 1,655 1,110 1,169 1,147 1,103 871 283 -554 -589 -561 -616 -552 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 •
Slide 12: Net interest margin rose to 144 bps
Net interest margin rose to 144 bps Underlying interest margin by quarter (in bps) Average Balance Sheet declined in 3Q13 Bank Balance Sheet (in EUR bln) 2,972 2,916 3,006 2,936 2,867 880 857 851 847 869 818 135 142 144 845 138 830 134 828 816 3Q12 4Q12 1Q13 2Q13 3Q13 B/S end of quarter B/S average
Slide 13: Lending assets down due to sales/transfers and FX
Lending assets down due to sales/transfers and FX Lending Assets ING Bank (EUR bln)* Lending assets down versus 2Q13 504.7 -7.8 • Lending assets down by EUR 10.9 0.4 -2.2 1.2 bln vs 2Q13 due to sales/transfers -2.5 493.8 of lending assets Retail NL and Real Estate Finance as well as currency effects
Slide 14: Operating expenses stable versus 3Q12
Operating expenses stable versus 3Q12 Underlying operating expenses (in EUR mln) Restructuring programmes on track (in EUR mln) Cost savings Cost savings -0.3% achieved by 2015 175 Retail Banking 226 430 NL ING Bank 30 150 Belgium 2,127 2,165 2,133 2,090 2,120 Commercial 96 260 Banking Total 352 840
Slide 15: ING Bank asset quality
ING Bank asset quality ING Bank Credit update 15
Slide 16: 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 24 29 31 62 EUR EUR EUR 142 281 bln 116 bln 176 bln 61 13 7 55 6 30 29 27 Netherlands Business lending Netherlands Structured Finance Belgium Other lending Nether
Slide 17: Risk costs decreased from both 3Q12 and 2Q13
Risk costs decreased from both 3Q12 and 2Q13 Underlying additions to loan loss provisions Underlying additions to loan loss provisions (in EUR mln and bps of avg RWA) (in EUR mln) 616 616 589 25 552 554 561 552 47 5 89 44 35 85 13 81 80 112 83 77 42 94 112 82 41 32 126 112 81 82 3Q12 4Q12 1Q13 2Q13
Slide 18: NPL ratio decreased slightly to 2.7%
NPL ratio decreased slightly to 2.7% Non-performing loans (in EUR and %) NPL ratio (in %) 3Q13 2Q13 2.8 2.7 Retail Banking 2.6 2.5 - Dutch Mortgages 1.8 1.6 2.3 - Business Lending NL 7.0 6.4 - Retail Belgium 3.2 3.2 - Retail International 1.6 1.6 Commercial Banking 14.9 15.2 16.2 15.7 14.5 - Structu
Slide 19: Risk costs Retail Banking Netherlands remain elevated
Risk costs Retail Banking Netherlands remain elevated Risk costs Dutch mortgages and Business Lending NL Non-performing loans Dutch mortgages and Business (in EUR mln) Lending NL (in EUR bln) 2.0 2.2 121 112 126 1.9 1.9 1.8 121 148 1.9 2.1 2.3 2.4 2.5 82 81 82 44 33 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q1
Slide 20: Risk costs Real Estate Finance slightly down
Risk costs Real Estate Finance slightly down Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (30 Sept 2013)* (in EUR bln) 130 145 132 134 126 11% Netherlands 5% Spain 102 103 111 112 6% Americas 83 6% EUR France 27 bln 57% Italy -28 -23 -20 6% UK -34 -51 3Q12 4Q12 1Q13
Slide 21: Investment book maintained for liquidity purposes
Investment book maintained for liquidity purposes Investment portfolio per 30 September 2013 (in EUR bln) Government bonds per 30 September 2013 (in EUR bln) 20% Germany EUR 96 bln 27% Netherlands EUR Belgium 8 53 bln France 4% 24% GIIPS 15 7% 18% Other 20 GIIPS debt securities per 30 September 2013
Slide 22: ING Bank capital, liquidity and funding
ING Bank capital, liquidity and funding ING Bank Credit update 22
Slide 23: 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 974 816 Limit balance sheet and RWA growth Execute balance sheet optimisation Further simplif
Slide 24: Strong capital position Bank despite dividend to Group
Strong capital position Bank despite dividend to Group ING Bank core Tier 1 ratio (in %) -0.4% 0.1% -1.1% 11.0% 12.4% 11.8% 12.1% 10.4% fully loaded 2Q13 3Q13 Dividend Unwinding Pro-forma Impact Pro-forma upstream to IABF Basel 2.5 CRD IV at CRD IV Group implementation • ING Bank’s core Tier 1 ratio
Slide 25: Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.4%
Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.4% Impact CRD IV 3Q2013 (pro-forma) (EUR bln) CRD IV core Tier 1 ratio Core Tier CT1 • The impact of CRD IV is estimated at 1 capital RWAs ratio -90 bps on introduction at 1 January 2014 and -80 bps phased in effect 30 Sep 2013 (adj. for State payme
Slide 26: ING Bank optimises the total capital base
ING Bank optimises the total capital base ING Bank is adequately capitalised ahead of CRD IV 20% 0.5% 17.6% -0.5% 16.6% 2.8% -0.7% 15.1% 15% 2.3% 13.5% 2.5% -1.4% 2.3% 2.5% 2.0% 1.8% 10% 1.5% 11.8% 12.4% 11.0% 5% 10.0% 0% 2Q2013 Tier 2 issue 3Q2013 Call / CRD IV / Pro-forma CRD IV Fully loaded State
Slide 27: Deposits are the primary source of funding
Deposits are the primary source of funding Continued growth in deposits Total liabilities (30 September 2013, in %) • 57% of the balance sheet is funded by customer deposits 15% • 84% of funds entrusted is retail based 4% 9% • ING continued to grow its deposits base even in crisis 13% years Other Eq
Slide 28: Long-term debt issuance has increased over time
Long-term debt issuance has increased over time Subordinated loans and Long-term debt securities in issue ING Bank has a well diversified long term funding mix (in EUR bln) (30 September 2013, in EUR bln) 103 8 9 6 30 94 88 58 32 Senior debt Covered bonds 13 51 State guaranteed Lower tier 2 19 22 21
Slide 29: ING Bank has modest long-term funding needs
ING Bank has modest long-term funding needs Maturity ladder outstanding long-term debt 30 September 2013 (EUR million) Issued Maturing 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2011 2012 9M13 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 > 2022 remaining ING Bank Senior debt ING Bank Cov
Slide 30: Wrap up
Wrap up Strong capital generation Continued retail deposit gathering* (in EUR bln) Core Tier 1 ratio 11.9% 12.4% 391 381 338 355 9.6% 321 7.3% 2008 2010 2012 3Q13 2009 2010 2011 2012 3Q13 A healthy balance sheet Sound liquidity ratios • Total capital buffer of EUR 49 billion 2011 2012 9M13 • Core ti
Slide 31: Appendix
Appendix ING Bank Credit update 31
Slide 32: Pro-forma ING Group capital structure at 30 September 2013
Pro-forma ING Group capital structure at 30 September 2013 Pro-forma - ING Group 30 September 2013* ING Bank 34 Equity 47 ING Insurance 14 Minority Interest U.S. 4 ING U.S. 10 CT1 securities 2 HybridsB 7 Core Debt 4 HybridsI 2 Hybrids 9 67 67 ING Bank ING Insurance (ING V) consolidated Insurance ING
Slide 33: Japan Life provides strong earnings and capital
Japan Life provides strong earnings and capital Japan Life contributes strongly Japan Life profits have to ING Insurance’s earnings improved ING Life Japan is well capitalised Operating result, 9M 2013* Operating result (in EUR mln) Local Regulatory Solvency Ratio (in %) 10% 221 4% EUR 181 mln divid
Slide 34: Japanese Closed Block VA will free up capital
Japanese Closed Block VA will free up capital Japanese VA runs off quickly releasing capital over time VA portfolio consists mostly of accumulation benefits Asset under Management in-force (in EUR bln) Japan VA Benefits AuM 3Q13 20 2% 22% 15 10 5 76% Accumulation Benefits 0 Death Benefits Sep. 2015
Slide 35: Japan VA accounting to be brought in line with economics
Japan VA accounting to be brought in line with economics Separate reporting triggers DAC write-off in 4Q13 Alignment and consistency in accounting improved • Japan Life (COLI) and Japanese Closed Block VA will Reserve adequacy on Japanese Closed Block VA be reported in separate segments as of 4Q13
Slide 36: ING Insurance's pro-forma debt further reduced
ING Insurance’s pro-forma debt further reduced Pro-forma ING Insurance (ING V) ING Insurance debt, net of cash 30 Sept. 2013 (in EUR bln) (in EUR bln) Europe 14.1 Equity 13.7 4.7 4.4 3.0 Japan Life (COLI) 1.4 Hybrids Group 2.4 Japan Closed Block VA* 0.9 Hybrids INGV 0.5 2.0 2.0 2.0 IIM Asia 0.1 Debt
Slide 37: Capital targets ING Insurance still to be finalised
Capital targets ING Insurance still to be finalised Solvency ratio NN Life ING Insurance IGD ratio 230% Based on DNB swap 257% 191% 183% 212% 216% ~185% 2012 2Q13 3Q13 2Q13 3Q13 3Q13 Pro-forma • Solvency of NN Life decreased from 230% to 183% in • IGD ratio for ING Insurance is down versus 2Q13, 3Q1
Slide 38: 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 3Q2013 ING Group Interim Acco
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