Slide 1: Full year 2019 results
Full year 2019 results ING posts 2019 net result of €4,781 mln; 4Q2019 net result of €880 mln Ralph Hamers, CEO ING Amsterdam • 6 February 2020
Slide 2: Key points
Key points • ING posted 2019 net profit of €4,781 mln, up 1.7% on 2018 • Our primary customer base, a driver of future value, increased by more than 830,000, to 13.3 mln in 2019 • We recorded net core lending growth of €17.2 bln in 2019, or 2.9%, primarily in Retail Banking which grew by €16.1 bln w
Slide 3: Commercial momentum remained strong in Retail
Commercial momentum remained strong in Retail Target to reach >16.5 mln primary customers* by 2022 Net promoter scores (NPS) 4Q2019 29.2% 30.5% 32.8% 34.3% >16.5 10.4 11.4 12.5 13.3 #1 in 6 out of 14 retail countries 2016 2017 2018 2019 Ambition 2022 Primary as a % of total retail customers Core len
Slide 4: In Retail our mobile approach is taking off
In Retail our mobile approach is taking off % of mobile-only in channel use among active customers who % mobile in total interactions with Annual mobile non-deposit sales contact us* ING per 1,000 active customers CAGR +56%** CAGR +42%*** CAGR +90% 37% 82% 62 26% 73% 46 19% 63% 28 12% 52% 9 2016 201
Slide 5: FY2019 results
FY2019 results 5
Slide 6: Income growth supported by higher NII and fees
Income growth supported by higher NII and fees Total underlying income Net interest income excl. FM Net fee and commission income (in € bln) (in € bln) (in € bln) CAGR +1.6% 18.1 18.3 CAGR +2.3% 17.5 17.7 13.3 13.6 13.7 12.8 CAGR +5.6% 2.7 2.8 2.9 2.4 2016 2017 2018 2019 2016 2017 2018 2019 2016 201
Slide 7: Underlying expenses increased driven by higher KYC, staff and regulatory costs
Underlying expenses increased driven by higher KYC, staff and regulatory costs Underlying operating expenses (in € bln) Underlying cost/income ratio CAGR +6.5% CAGR +2.7% 0.9 1.0 0.8 0.9 56.6% 55.5% 54.8% 54.2% 8.9 9.0 9.3 8.6 50.4% 51.0% 49.3% 49.5% 2016 2017 2018 2019 2016 2017 2018 2019 Expenses
Slide 8: Risk costs increased, remaining below through-the-cycle average
Risk costs increased, remaining below through-the-cycle average Risk costs (in € bln and bps of average customer lending) • Risk costs increased to €1,120 mln in 2019, or 18 bps of average customer lending, remaining below the 18 18 through-the-cycle average of ~25 bps 12 11 • The increase was mainl
Slide 9: Underlying result down 11.3% in 2019; ROE at 9.4% for FY2019
Underlying result down 11.3% in 2019; ROE at 9.4% for FY2019 Underlying net result* (in € mln) Underlying return on equity* 5,389 11.2% 4,976 4,957 10.1% 10.2% 4,781 9.4% 2016 2017 2018 2019 2016 2017 2018 2019 €685 mln incl. €-775 mln settlement impact and €90 mln net result from Insurance other •
Slide 10: ING Group financial ambitions
ING Group financial ambitions Actual 2018 Actual 2019 Financial ambitions ~13.5%* • CET1 ratio (%) 14.5% 14.6% (Basel IV) Capital • Leverage ratio (%) 4.4% 4.6% >4% • Underlying ROE (%)** 11.2% 9.4% 10-12% (IFRS-EU Equity) Profitability • Underlying C/I ratio (%)** 54.8% 56.6% 50-52% Dividend • Divi
Slide 11: 4Q2019 results
4Q2019 results 11
Slide 12: We continue our efforts to counter financial and economic crime
We continue our efforts to counter financial and economic crime Continued focus on know your customer (KYC) We keep investing in regulatory compliance • The number of FTE working globally on know your • We announced an investment in US-based regulatory customer (KYC) related activities has increased
Slide 13: Our focus on building an innovative and sustainable bank
Our focus on building an innovative and sustainable bank Important milestones on innovation achieved in 4Q2019 We are recognised as a leader in sustainability • In Poland, ING is the first bank on the Polish market to • ING was recognised as an A-list company for leadership on introduce account aggr
Slide 14: Income reflects discipline in lending margins and fee growth
Income reflects discipline in lending margins and fee growth Underlying pre-tax result (in € mln) Total underlying income (in € mln) 2,005 4,501 4,576 4,665 4,626 4,439 1,911 1,692 1,582 1,337 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 • 4Q2019 underlying result before tax
Slide 15: NII improved on year-ago and previous quarter; 4-quarter rolling NIM at 154 bps
NII improved on year-ago and previous quarter; 4-quarter rolling NIM at 154 bps Net interest income excl. Financial Markets (FM) (in € mln) Higher NIM partially explained by FM (in bps) 3,459 3,435 3,478 3,391 3,391 156 157 155 154 154 153 154 152 154 154 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q2018 1Q
Slide 16: 4Q2019 net core lending
4Q2019 net core lending Customer lending ING Group 4Q2019 (in € bln) Core lending businesses: €2.0 bln 0.5 1.9 -2.0 1.5 -0.1 -0.3 -0.6 -2.1 617.3 -0.6 0.8 616.4 30/09/2019 Retail Retail Retail Retail WB Lending WB Daily WB Other* Lease run- Treasury FX / Other** 31/12/2019 NL Belgium Germany Other B
Slide 17: Further growth of fee income; FM client business improved YoY
Further growth of fee income; FM client business improved YoY Net fee and commission income* (in € mln) Underlying income Financial Markets (in € mln) +4.4% 747 735 254 255 257 704 711 221 675 14 180 295 262 290 280 303 159 159 176 180 176 249 256 262 274 256 -4 -25 -58 -72 -74 -14 4Q2018 1Q2019 2Q2
Slide 18: Higher expenses driven by elevated KYC costs
Higher expenses driven by elevated KYC costs Underlying operating expenses (in € mln) Regulatory costs* (in € mln) 515 303 493 515 266 97 106 266 303 2,303 2,272 2,354 2,334 2,372 98 97 91 106 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 1Q 2Q 3Q 4Q Expenses excl. regulatory costs Regulatory costs 2018 2019 •
Slide 19: Risk costs increased sequentially, asset quality remains strong
Risk costs increased sequentially, asset quality remains strong Risk costs (in € mln) Stage 3 ratio 428 242 276 1.6% 1.6% 1.6% 1.6% 1.6% 207 209 254 50 116 71 91 1.5% 1.5% 1.5% 1.5%* 107 73 75 1.4% 1.4% 84 80 1.4% 1.3% 1.3%* 40 44 84 1.2% 45 42 11 16 22 43 15 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 4Q201
Slide 20: ING Group CET1 ratio stable at 14.6%
ING Group CET1 ratio stable at 14.6% ING Group CET1 ratio development 14.6% 0.3% 0.3% 15.2% -0.6% 14.6% ~13.5% 11.8%** 3Q2019 Group CET1 Profit added to CET1* RWA & other Pro forma 4Q2019 Part of expected 4Q2019 Group CET1 Basel IV CET1 Group CET1 supervisory RWA ambition impact CET1 ratio Expected
Slide 21: Wrap up
Wrap up 21
Slide 22: Wrap up
Wrap up • ING posted 2019 net profit of €4,781 mln, up 1.7% on 2018 • Our primary customer base, a driver of future value, increased by more than 830,000, to 13.3 mln in 2019 • We recorded net core lending growth of €17.2 bln in 2019, or 2.9%, primarily in Retail Banking which grew by €16.1 bln whil
Slide 23: Appendix
Appendix 23
Slide 24: Significant impact of volatile items on 4Q2019 pre-tax result
Significant impact of volatile items on 4Q2019 pre-tax result Underlying pre-tax result Volatile items and regulatory costs Pre-tax result excl. volatile items (in € mln) (in € mln) and regulatory costs (in € mln) 4Q18 1Q19 2Q19 3Q19 4Q19 2,005 1,911 1,954 2,001 1,989 2,005 WB/FM – valuation -4 -58
Slide 25: Group CET1 ratio at 14.6% and underlying ROE at 9.4%
Group CET1 ratio at 14.6% and underlying ROE at 9.4% Group CET1 ratio development during 4Q2019 Group underlying ROE calculation in 4Q2019 (amounts in € bln and %) (in € mln) Capital RWA Ratio Change As of 31 December 2019 Actuals 30 September 2019 46.7 319.7 14.6% IFRS-EU shareholders’ equity 53,76
Slide 26: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* 7% 3% 2% 25% 15% 35% 29% €700 4% €454 €246 bln bln bln 65% 66% 10% 17% 9% 13% Retail Banking Mortgages Netherlands Lending Wholesale Banking Other lending Netherlands Daily Banking & Trade Finance
Slide 27: Granular Wholesale Banking lending credit outstandings by geography and sector
Granular Wholesale Banking lending credit outstandings by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (4Q2019)* Lending Credit O/S Wholesale Banking (4Q2019)* 1% NL 6% 10% Real Estate, Infra & Construction 8% 19% Belux
Slide 28: Breakdown of quarterly risk costs Wholesale Banking 2019 per geography and sector
Breakdown of quarterly risk costs Wholesale Banking 2019 per geography and sector Breakdown of geography which generated risk costs WB Breakdown of sector which generated risk costs WB (in € mln) (in € mln) 254 254 116 116 71 91 71 91 1Q19 2Q19 3Q19 4Q19 1Q19 2Q19 3Q19 4Q19 NL Belux Non-Bank Financi
Slide 29: Detailed Stage 3 disclosure on selected portfolios
Detailed Stage 3 disclosure on selected portfolios Selected portfolios (in € mln) Lending credit Stage 3 ratio Lending credit Stage 3 ratio Lending credit Stage 3 ratio O/S 4Q2019 4Q2019 O/S 3Q2019 3Q2019 O/S 4Q2018 4Q2018 Wholesale Banking 246,223 1.2% 257,082 1.5% 236,248 1.4% Lending 163,051 1.4%
Slide 30: Overview Turkey exposure
Overview Turkey exposure Total exposure ING to Turkey* (in € mln) Lending Credit O/S by currency 4Q2019 3Q2019 Change 2% 16% Lending Credit O/S Retail Banking 4,537 4,817 -5.8% USD Residential mortgages 529 537 -1.5% 36% EUR TRY Consumer lending 1,203 1,225 -1.8% Other 46% SME/Midcorp 2,804 3,054 -8
Slide 31: 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