Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Investor Day (June 2024)
69 slides from Ing Groep's investor day presentation, Jun 17, 2024
Slide 1: Growing the difference
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Steven van Rijswijk, Chief Executive Officer 17 June 2024
Slide 2: We have a track record of delivering value for our stakeholders
We have a track record of delivering value for our stakeholders Who we are Customers Our people Planet and society Shareholders ▪ >39 mln customers, of ▪ Top quartile ▪ Manage our lending ▪ Increased annual fees by which 15.5 mln primary1) engagement scores portfolio towards net-zero >€1 bln in 5 ye
Slide 3: We have been making the difference
We have been making the difference Who we are Our DNA Strong creative, entrepreneurial and digital-first mindset Focused and Loved brand Growing Leading clear strategy with strong NPS Retail Bank Wholesale Bank Relentless customer focus Collaborative culture >39 mln Leader in 14.7%1) 14.8%1) custome
Slide 4: Successful strategy execution focusing on strengthening foundations
Successful strategy execution focusing on strengthening foundations Where we are now Focusing on Building Putting Growing employer brand where we can foundational sustainability and talent attraction make impact capabilities at the heart capabilities ▪ Focusing on local scale ▪ Strengthening income
Slide 5: Growing the difference
Growing the difference
Slide 6: Our operating environment
Our operating environment Our strategic priorities Trends Strategic requirements Technology drives evolving Excellent customer experience customer demands Intensifying competition from banks and non-banks Local scale in Retail Banking Sustainability moved to core of society Strong digital and scalab
Slide 7: Untapped potential in our markets
Untapped potential in our markets Our strategic priorities Attractive market characteristics Large potential Resilient and growing economies with high GDP and low unemployment 5.9% unemployment1) Active in sizeable economies with large banking revenue pools SMEs generate ~50% of net turnover in the
Slide 8: Key themes to capture untapped potential
Key themes to capture untapped potential Our strategic priorities Increase impact and value for customers Build scale in more market segments and play a bigger role in the overall economy Build on our strengths and focus on adjacencies ING is well positioned Our brand and Our Strong Execution custom
Slide 9: Executing our strategy to be the best European bank
Executing our strategy to be the best European bank Our strategic priorities growing the difference Purpose Empowering people to stay a step ahead in life and in business Superior value for customers Uniquely Strategic pillars Sustainability at the heart ING Providing Staying seamless digital servic
Slide 10: Translating strategy into clear direction
Translating strategy into clear direction Our strategic priorities Growth and income diversification Operational leverage Capital allocation ▪ Diversify and enhance product ▪ Continue to scale processes, people ▪ Shift capital allocation towards offering to existing customer and technology, applying
Slide 11: Leading in financing the sustainable transition
Leading in financing the sustainable transition Our strategic priorities Environment Phase out financing of upstream Continue managing our portfolio oil and gas production by 2040 to net-zero by 2050 Frontrunner in financing the transition Thought leader on standards and practices €150 bln sustainab
Slide 12: Our targets confirm our ambition to be the best European bank
Our targets confirm our ambition to be the best European bank Our targets To be the best European bank by Mobile primary Total Fee Cost/income CET1 Return on customers income income ratio ratio equity annual growth CAGR 2024-2027 by 2027 by 2027 by 2025 by 2027 +1 mln +4-5% €5 bln 52-54% ~12.5% 14%
Slide 13: Growing the difference – Retail Banking
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Pinar Abay, Retail Banking 17 June 2024
Slide 14: We have been making the difference in retail banking
We have been making the difference in retail banking Who we are >€350 bln of retail banking revenue pools1) Track record of delivering growth Income 2023 €15 bln Leading digital capabilities Return on equity2) 2023 25% Loved brand Share of ING RWA 2023 ~50% Strong financial performance 1) Based on M
Slide 15: We have a track record of delivering growth
We have a track record of delivering growth Who we are Primary customers1) (in mln) +6% CAGR 15.3 15.5 14.0 14.6 13.0 13.5 12.2 11.2 10.3 12.4 13.3 13.6 10.6 11.7 9.7 8.0 6.0 4.4 2016 2017 2018 2019 2020 2021 2022 2023 April 2024 Mobile primary customers2) 40% of our 47% of primary >39 mln customers
Slide 16: We have leading digital capabilities
We have leading digital capabilities Who we are Key digital metrics Our One App is among the most popular apps2) 92% 95% 1 WhatsApp Mobile contacts 2 Facebook In % of total contacts1) 3 YouTube 2021 2023 4 Instagram 72% 80% 5 Outlook Digital sales In % of total sales 6 Google Maps 2021 2023 7 Spotif
Slide 17: Our love brand continues to be our superpower
Our love brand continues to be our superpower Who we are Most recognised Most recommended The ING brand is Top 3 ING continues to be the Top 3 recognised as leading most recognised brand in… most recommended NPS position in… the way and the most bank in the majority unique in the majority 7 out of 1
Slide 18: We have strong financial performance across three pillars
We have strong financial performance across three pillars Where we are now 1. Private Individuals 2. Business Banking 3. Private Banking2) Total income €10.4 bln €4.2 bln €0.5 bln 2023 (€8.4 bln in 2021) (€3.3 bln in 2021) (€0.5 bln in 2021) Return on equity1) 2023 27% 22% 31% Current footprint 1) E
Slide 19: Zoom in: a digitally led Business Bank
Zoom in: a digitally led Business Bank Where we are now Successful and profitable Business Banking franchise1) Digital-first service model Easy Guided Relationship 1.7 mln €4.2 bln customers income No-frills, Digital banking Relationship on demand and event-driven banking with digital banking remote
Slide 20: Our footprint offers significant opportunities for growth
Our footprint offers significant opportunities for growth Where we are now Revenue market Private Individuals has growth share1) potential across our footprint Business Banking has a high return Retail banking model with significant potential for revenue pools deployment in other countries in our fo
Slide 21: Private Individuals: accelerating growth and delivering value
Private Individuals: accelerating growth and delivering value Our strategic priorities Make banking ▪ Create superior customer value with leading NPS frictionless and relevant ▪ Obsessively simplify customer journeys ▪ Lead in using data and (Gen)AI Private Grow with the Affluent ▪ Expand offering t
Slide 22: Business Banking: deploying our high return model in other countries
Business Banking: deploying our high return model in other countries Our strategic priorities Make banking ▪ Enable full digital self-service for basic needs frictionless and relevant ▪ Focus on digital acquisition Business Grow our fee business with segment-focused ▪ Targeted Daily Banking packages
Slide 23: Private Banking: building a third pillar based on strong synergies
Private Banking: building a third pillar based on strong synergies Our strategic priorities Lead the digital way to ▪ Leverage digital and data to ensure scalable redefine Private Banking management of wealth ▪ Drive step-change in customer experience with Private interactive, digital and enabling t
Slide 24: Germany: become the digital primary bank and expand presence
Germany: become the digital primary bank and expand presence Our strategic priorities We are delivering on our promises Priorities for 2024-2027 Grow in Private Individuals with a focus on mobile primary Number of customers customers and increased product penetration Growing our customer base +200 k
Slide 25: Belgium: progress towards higher levels of profitability
Belgium: progress towards higher levels of profitability Our strategic priorities We are delivering on our promises Priorities for 2024-2027 Profitable growth in Private Individuals Digital sales ▪ Growth of >50 k mobile primary customers per year Increasing digitalisation 73% ▪ Further strengthen 3
Slide 26: Netherlands: driving growth towards a sustainable future
Netherlands: driving growth towards a sustainable future Our strategic priorities We are delivering on our promises Priorities for 2024-2027 Growth of Private Individuals on superior digital platform Primary client share Improving ▪ Growth of >200 k of mobile primary customers per year value for 62%
Slide 27: Our targets confirm our ambition to be the best European bank
Our targets confirm our ambition to be the best European bank Our targets To be the best European bank by Mobile primary Income Fee Cost/income Return on customers growth income ratio equity1) annual growth in line with CAGR 2024-2027 by 2027 by 2027 +1 mln Group guidance 5-10% 50-52% >20% Structura
Slide 28: Annex - Retail Banking per country (FY2023)
Annex - Retail Banking per country (FY2023) Retail Banking Total Netherlands Belgium1) Germany Spain Italy Australia Poland Romania Türkiye Scale Customers (mln) 38.7 7.7 2.5 8.7 4.2 1.2 2.9 4.3 1.7 5.6 o.w. primary (mln) 15.3 4.7 1.1 2.7 1.5 0.4 1.1 2.2 0.9 0.7 o.w. mobile primary (mln) 13.3 4.0 0.
Slide 29: Growing the difference – Wholesale Banking
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Andrew Bester, Wholesale Banking 17 June 2024
Slide 30: A leading European Wholesale Bank, powered by a global network
A leading European Wholesale Bank, powered by a global network Who we are The ING difference #1 The ING difference #2 The ING difference #3 Our global reach, with local experts We are sector experts We are sustainability pioneers ▪ 35 countries, a global network ▪ Deep expertise in our 7 chosen ▪ Ma
Slide 31: Delivered our 2025 targets
Delivered our 2025 targets Where we are now Financial targets 2025 Income growth Maintain low €125 bln <50% >10% Improve in line with through-the-cycle Sustainable Cost/income ROE by 2025 income/RWA Group guidance risk costs volume mobilised ratio Results 2023 462 bps €7,057 mln -5 bps1) €115 bln 47
Slide 32: Progressing strongly on strategic priorities
Progressing strongly on strategic priorities Where we are now Client portfolio Average income optimisation per client 35% 110% Increase capital efficiency # of clients vs 2019 vs 2019 Portal customer Net interactions Promoter Score 5% CAGR 72 points Ensure efficient and seamless digital delivery sin
Slide 33: Continuous focus on execution
Continuous focus on execution Our strategic priorities We defined these must-wins Financing Scaling product Digital Capital the transition foundations delivery management Best European Wholesale Bank… powered by our global network Defined by: High NPS Digital Leading Sustainable Sustainability leade
Slide 34: Leading the transition finance opportunity
Leading the transition finance opportunity Our strategic priorities 4 sectors on track to meet 3 sectors tracking within Net-zero targets 2030 intermediate targets1) 5% of benchmark2) for most carbon-intensive sectors Continue managing our portfolio to net-zero by 2050 Phase out financing of upstrea
Slide 35: We see further opportunities
We see further opportunities Our strategic priorities Optimising capital efficiency Peers1) Income/average RWA ~3.5% Broaden risk Peers1) distribution tools 707 SRT2) outstanding as % of total loans 0% ING 245 >140% Increase deposit / Transaction Services 34% Deposit-to-loan ratio 462 ~85% Increase
Slide 36: Scaling our product foundations to further diversify income
Scaling our product foundations to further diversify income Our strategic priorities Shifting growth to fee generating and capital light products To further diversify income Capital Cost Income intensity density growth ▪ Increase capital velocity with SRT ▪ Expand lead arranger roles Lending ~67% ▪
Slide 37: Digital delivery supporting our products and services
Digital delivery supporting our products and services Our strategic priorities Driving efficiency through radical digitalisation & standardisation ▪ One digital platform ▪ Further digitalisation of deal execution processes Lending ▪ (Gen)AI based credit packs review ▪ Strengthen payment platforms ▪
Slide 38: Continue focusing on capital management
Continue focusing on capital management Our strategic priorities Management actions have absorbed regulatory add-on and volume growth RWA (in € bln) 5 22 155 150 management actions -32 RWA 2019 Regulatory New Client Model Data quality RWA 2023 impact volumes portfolio optimisation and balance optimi
Slide 39: Our targets confirm our ambition to be the best European bank
Our targets confirm our ambition to be the best European bank Our targets To be the best European bank by Income Risk costs Sustainable Cost/income Increase Return on growth maintained low volume mobilised ratio income/RWA equity1) in line with through-the-cycle by 2027 by 2027 2024-2027 by 2027 Gro
Slide 40: Growing the difference – Chief Risk Officer
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Ljiljana Čortan, Chief Risk Officer 17 June 2024
Slide 41: Successfully managing our risk through-the-cycle
Successfully managing our risk through-the-cycle Who we are Risk costs below eurozone peers’1) average Consistently low Stage 3 ratio 72 72 3.4% 67 3.2% 60 53 2.7% 2.4% 2.3% 1.7% 1.5% 1.5% 25 27 25 24 1.4% 1.4% 20 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 ING rolling average 10y (in bps) 2)
Slide 42: Maintaining a low risk profile by using a holistic approach
Maintaining a low risk profile by using a holistic approach Who we are Credit and counterparty risk Operational risk Financial risk 83%1) 12%1) 5%1,2) Clear and consistent credit and Continuously improving operational counterparty risk management resilience and internal controls Prudent approach to
Slide 43: Credit risk management framework built on a strong risk culture
Credit risk management framework built on a strong risk culture Where we are now Strong risk culture Pro-active monitoring and Focus on diversification Selective at the gate management ▪ Concentration risk measured, ▪ Disciplined origination supported ▪ Early warning indicators and managed and monit
Slide 44: Preserving asset quality with targeted and effective credit strategies
Preserving asset quality with targeted and effective credit strategies Where we are now in € bln1) 5.3 ▪ 75% reduction of our Russia-related exposure, with no material losses 1.3 ▪ Portfolio in run-off Russia exposure Feb 2022 2023 in € bln2) 8.6 ▪ 34% reduction of leveraged finance3) exposure 5.7 ▪
Slide 45: Sufficient risk appetite to enable 'growing the difference' strategy
Sufficient risk appetite to enable ‘growing the difference’ strategy Our strategic priorities Retail Banking Wholesale Banking ▪ Growth in existing markets that we know well from a risk ▪ Further improve income/RWA thus improving the return on perspective, best practices will be applied and shared r
Slide 46: Pro-active management of evolving risks and regulations
Pro-active management of evolving risks and regulations Our strategic priorities Basel Cyber-security / (Gen)AI Operational KYC / Climate / IV technology risks risks resilience compliance risks environmental risks ▪ Day 1 impact on ▪ Continuous ▪ Building a scalable ▪ Further strengthen ▪ Investing
Slide 47: Our priorities support our ambition to be the best European bank
Our priorities support our ambition to be the best European bank Our strategic priorities To be the best European bank by Ensure safe Manage risks Simplify Manage Maintain best in class and sustainable (pro)-actively and digitise evolving risks risk management business growth ▪ Granular risk appetit
Slide 48: Growing the difference – Tech & Operations
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Marnix van Stiphout, Tech & Operations 17 June 2024
Slide 49: A leading digital bank, enabled by Tech & Operations
A leading digital bank, enabled by Tech & Operations Who we are Seamless digital services Scalable Safe, secure & reliable Cost efficient ▪ #1 NPS in 5 Retail ▪ 34% of operations ▪ 99.6% digital channel ▪ ~40% of total cost base Banking markets1) centralised in hubs availability in Retail in Tech &
Slide 50: We are building and rolling out scalable foundational capabilities
We are building and rolling out scalable foundational capabilities Where we are now A strong foundation built on proven principles Evidenced by the progress on our 2025 targets 2021 2023 2025 Tech Serviced from hubs Modular Workload on private cloud 34% 63% >70% ✓ Adoption of shared engineering plat
Slide 51: Consolidation and digitalisation are driving operational efficiency
Consolidation and digitalisation are driving operational efficiency Where we are now Scalability examples Operational efficiency Retail Banking 79% 2021-2023 43% Onboarding Private Individuals STP rate in ING Netherlands (%) ~14% 2021 2023 57% Consumer Lending ~6% STP rate in ING Netherlands (%) 9%
Slide 52: In Tech we further leverage and expand our foundations
In Tech we further leverage and expand our foundations Our strategic priorities Our scalable platform foundation Further growing the platform Today Tomorrow WB WB Local Local Local Local Global Local Local Local Local Global … … + + + + + + + + + + ▪ Product solutions ▪ Customer interaction Touchpoi
Slide 53: Continue building and scaling our Tech platform
Continue building and scaling our Tech platform Our strategic priorities Increasing deployment via our Tech platform To further scale and enhance operational resilience Increased productivity WB Shorter time-to-market Local Local Local Local Global … Increase # of engineers on + + + + + shared engin
Slide 54: Operations benefits from our scalable capabilities and digital expertise
Operations benefits from our scalable capabilities and digital expertise Our strategic priorities Increasing our scalability Focusing on our must-wins to further boost productivity and raise CX1) & EX1) Retail Wholesale Scope2) Banking Banking Processes end-to-end digitalisation ▪ Removing customer
Slide 55: Zoom in: digitalisation for contact centers & mortgages
Zoom in: digitalisation for contact centers & mortgages Our strategic priorities Contact center Mortgages Remove customer friction moments, resulting in reduced Ambition to further increase automation and digitalisation, contact frequency1). Leveraging our status as early adopter towards full STP fo
Slide 56: Unlocking superior value for customers and efficiency
Unlocking superior value for customers and efficiency Our strategic priorities Key priorities To support our strategy Seamless digital experience Digi Index score1) Processes Increased productivity >85% by 2027 versus 71% in 2023 People Consistent high quality Improving FTE over customer balances2)
Slide 57: Increasing efficiency while continuing to invest in the future
Increasing efficiency while continuing to invest in the future Our strategic priorities Our cost base Investing efficiency gains in future growth Expenses1) (in € bln) Operations Further digitalisation and platform adoption Absolute reduction in yielding enhanced CX and efficiency, Operations costs
Slide 58: Our targets confirm our ambition to be the best European bank
Our targets confirm our ambition to be the best European bank Our targets To be the best European bank by Digi Index Improving FTE over Increase # of engineers Increase # of score customer balances on shared engineering shared solutions by 2027 2023-2027 platform used within ING >85% >10% Structural
Slide 59: Growing the difference – Chief Financial Officer
Growing the difference Accelerating growth, increasing impact, delivering value Capital Markets Day 2024 Tanate Phutrakul, Chief Financial Officer 17 June 2024
Slide 60: We have a strong financial model, delivering attractive returns
We have a strong financial model, delivering attractive returns Who we are Highly diversified Superior Strong capital generation Attractive shareholder business funding profile and ratios distribution ▪ Diversified ▪ Highly insured and ▪ Strong capital position ▪ Proven ability to provide geographic
Slide 61: We are delivering on our promises since Capital Markets Day 2022
We are delivering on our promises since Capital Markets Day 2022 Where we are now Increasing Growing our business Optimising our costs Generating capital structural fees ▪ Our focus on ▪ We have increased our ▪ We have further ▪ We have increased our profitable lending number of primary increased th
Slide 62: Strong margins and profitable growth, supporting interest income
Strong margins and profitable growth, supporting interest income Our targets Annual volume growth Lending and liability margins Net interest margin in bps in bps ~4.0% 156 ~150 150 151 153 154 >130 134 144 3.0% 129 139 134 119 1.3% 73 66 1.0% 56 >110 100-110 43 2019-2023 2024-2027 '19 '20 '21 '22 '2
Slide 63: Delivering €1 billion of additional fee income by 2027
Delivering €1 billion of additional fee income by 2027 Our targets Net fee and commission income Alpha: building a stronger base Beta: capturing the opportunity in € bln Daily banking Daily banking +5-10% ▪ Continued customer growth ▪ Payment activity levels by annual growth ▪ Optimise pricing of pa
Slide 64: Investing in longer-term value creation
Investing in longer-term value creation Our targets Business growth to be offset by operational leverage % in CAGR +3-4% CAGR 2024-2027 ~3% ~2% ~0.3% €~12 bln ~-2% Growing our Operational business leverage ▪ >1 mln of mobile primary ▪ Absolute reduction in customer growth per year Operations costs T
Slide 65: Delivering positive jaws to 2027
Delivering positive jaws to 2027 Our targets 2024 outlook 2027 targets Total income ~€22 bln 4-5% CAGR 2024-2027 Total expenses ~€12 bln 3-4% CAGR 2024-2027 Cost/income ratio ~54% 52-54% Cost/income ratio pathway to 2027 ▪ Positive jaws to 2027, supported by ~54% 54-55% 52-54% profitable growth and
Slide 66: Improving our return on equity to 14%
Improving our return on equity to 14% Our targets Shifting capital allocation towards Retail Banking Improving our structural profitability to a 14% return on equity 2023 2027 ~0.7% ~0.6% ~0.4% ~0.3% 14% >12% RWA 50% RWA 55% 2024 Converging Growing fee Shifting Improving 2027 Retail Banking Wholesal
Slide 67: Providing attractive shareholder returns
Providing attractive shareholder returns Our targets Potential uses of retained earnings and capital in excess of Unchanged CET1 ratio target and distribution policy ~12.5% CET1 ratio target ▪ Annual pay-out ratio of 50% of resilient net profit ▪ CET1 ratio target of ~12.5% confirmed (by end of 2025
Slide 68: Our targets confirm our ambition to be the best European bank
Our targets confirm our ambition to be the best European bank Our targets To be the best European bank by Mobile primary Total Fee Cost/income CET1 Return on customers income income ratio ratio equity annual growth CAGR 2024-2027 by 2027 by 2027 by 2025 by 2027 +1 mln +4-5% €5 bln 52-54% ~12.5% 14%
Slide 69: 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 ar