Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Q1 2012 Earnings Presentation
34 slides from Ing Groep's earnings presentation, May 9, 2012
Slide 1: First Quarter 2012 Results
First Quarter 2012 Results ING posts 1Q12 underlying net profit of EUR 705 million Jan Hommen CEO Amsterdam - 9 May 2012 www.ing.com
Slide 2: Key messages
Key messages • Group underlying net result of EUR 705 mln improved from the previous quarter but declined from a strong first quarter last year • Bank underlying pre-tax result rose 65.1% from the fourth quarter to EUR 1,126 mln, supported by lower impairments and lower de-risking losses, despite a
Slide 3: Strong improvement from the fourth quarter at both Bank and Insurance
Strong improvement from the fourth quarter at both Bank and Insurance Underlying pre-tax result Underlying pre-tax result Underlying net result Bank (in EUR mln) Insurance (in EUR mln) ING Group (in EUR mln) 689 1,533 511 527 1,354 1,421 478 475 1,161 1,145 1,126 671 563 428 705 878 -18 682 -1,348 -
Slide 4: Market-related impacts diminish from the fourth quarter but continue to weigh on results
Market-related impacts diminish from the fourth quarter but continue to weigh on results Bank Insurance Group % % % 1Q12 4Q11 Change 1Q12 4Q11 Change 1Q12 4Q11 Change Reported underlying result before tax 1,126 682 65.1% -18 -1,348 n.a. 1,108 -666 n.a. Impairments Greek government bonds -133 -1 -66
Slide 5: ING is making good progress on EC restructuring
ING is making good progress on EC restructuring Delivering on EC restructuring Progress 2012 YTD Action • Liability management transaction pro- • Separation Bank/Insurance actively addressed change of control • Sell ING Direct USA clause in most ING Insurance debt • Sell Insurance Latin America*
Slide 6: ING Bank
ING Bank First Quarter 2012 Results 6
Slide 7: Bank results improved strongly from 4Q11, but declined versus 1Q11 due to credit adjustments
Bank results improved strongly from 4Q11, but declined versus 1Q11 due to credit adjustments Bank results (in EUR mln) Addition to loan loss Underlying result Gross result + provisions = before tax 1,533 1,775 1,567 1,449 1,145 1,126 1,226 1,129 -242 878 -304 682 -348 -447 -441 1Q11 2Q11 3Q11 4Q11 1
Slide 8: Market impacts and de-risking diminished from the fourth quarter but continue to impact results
Market impacts and de-risking diminished from the fourth quarter but continue to impact results Gross result (EUR mln) % % 1Q2012 1Q2011 Change 4Q2011 Change Reported gross result 1,567 1,775 -11.7% 1,129 38.8% Impairments Greek impairments 0 0 -133 Other impairments on debt / equity securities -5 4
Slide 9: Credit adjustments at Commercial banking had net negative impact of EUR -198 mln
Credit adjustments at Commercial banking had net negative impact of EUR - 198 mln in 1Q12 P/L impact credit adjustments* (EUR mln) Cumulative CVA/DVA (EUR mln) 200 500 250 0 0 -200 -250 -400 -500 1Q11 2Q11 3Q11 4Q11 1Q12 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 CVA on derivates DVA notes Net CVA DV
Slide 10: Interest result has remained steady as volume growth offsets lower interest margin
Interest result has remained steady as volume growth offsets lower interest margin Interest result (in EUR bln) Interest margin by quarter* (in bps) 914 899 921 140 869 885 138 133 136 132 3.054 2.995 3.114 3.052 3.092 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Interest result B/S total (end
Slide 11: Strong deposit growth in 1Q12 despite ongoing competition for savings
Strong deposit growth in 1Q12 despite ongoing competition for savings Funds entrusted Retail Bank (EUR bln)* Residential mortgages (EUR bln)* 1.6 306.8 11.4 0.6 403.6 305.5 -0.2 391.6 31/12/11 Net FX 31/03/12 31/12/11 Net FX 31/03/12 production production Funds entrusted Commercial Bank (EUR bln) Co
Slide 12: ING Bank has a favourable funding mix and long-term funding is increasing
ING Bank has a favourable funding mix and long-term funding is increasing Favourable funding mix (31 March 2012) Limiting refinancing needs (EUR bln) Issued Maturing 7% 2% 8% 42% 23.0 18.2 21% 9.2 20% 2011 2012 2012 Retail deposits Corporate deposits Senior debt State guaranteed Public debt Interban
Slide 13: Operating expenses declined on both quarters reflecting ongoing cost-containment measures
Operating expenses declined on both quarters reflecting ongoing cost-containment measures Operating expenses (EUR mln) Underlying cost/income ratio (%) -1.2% 58.8% 2,269 56.8% 2,262 2,235 2,214 2,225 54.0% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Cost/income ratio Cost/income ratio excl. ma
Slide 14: Retail Netherlands cost program on track
Retail Netherlands cost program on track Implementation of DGS systems Financial impact cost program (in EUR) and/or Bank tax Headcount reduction (2012-2013): • In the Netherlands, the new Deposit Guarantee Scheme Internal 2,000 FTE (DGS), initially expected to partially External 700 FTE start in Ju
Slide 15: Risk costs declined slightly from 4Q11 but are expected to remain elevated
Risk costs declined slightly from 4Q11 but are expected to remain elevated Underlying additions to loan loss Underlying additions to loan loss provisions (EUR mln and bps avg RWA) provisions (EUR mln) 447 441 447 441 404 409 52 348 99 331 33 309 304 46 32 242 48 39 61 59 54 55 35 45 46 49 47 41 43 1
Slide 16: NPL ratio up slightly to 2.1%
NPL ratio up slightly to 2.1% ING Bank’s loan book (in %)* NPL ratio NPL% NPL% 1Q12 4Q11 4% 1% 6% Residential mortgages 28% - Netherlands 1.2 1.1 11% - Other 1.0 1.0 Commercial lending - Corporate loans 2.6 2.3 13% - Mid-corps/SMEs** 4.4 4.4 - Structured Finance 2.5 2.1 - RE Finance 5.7 5.6 7% 30% -
Slide 17: NPL ratio of Dutch mortgages just 1.2%, despite house price declines
NPL ratio of Dutch mortgages just 1.2%, despite house price declines of 12% since 2008 Non-performing loans ratio (%) Risk costs (EUR mln) 3.0 65 2.0 44 37 1.2 21 22 25 21 1.0 14 17 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 10 10 10 10 11 11 11 11 12 10 10 10 10 11 11 11 11 12 Breakd
Slide 18: Risk costs ING Real Estate Finance have increased but actual losses have been limited
Risk costs ING Real Estate Finance have increased but actual losses have been limited Real Estate Finance portfolio by country of residence Risk costs and write-offs (EUR mln) 239 12% Netherlands 4% Americas 147 4% Spain 53% 102 6% Italy 80 UK 39 48 45 17 26 8% Australia/Asia 0 8 0 Other 2008 2009 2
Slide 19: Retail Banking results down from 1Q11, but strongly improved from 4Q11
Retail Banking results down from 1Q11, but strongly improved from 4Q11 Pre-tax profit Retail Bank 1Q12 Pre-tax profit Retail Bank (EUR mln) (EUR 617 mln) 850 Netherlands 10% 640 617 Belgium 554 Germany 21% Rest of the World 347 46% 23% 1Q11 2Q11 3Q11 4Q11 1Q12 • Results from Retail Banking improved
Slide 20: Commercial Banking showed a strong performance despite CVA/DVA impact
Commercial Banking showed a strong performance despite CVA/DVA impact Pre-tax profit Commercial Bank Pre-tax profit Commercial Bank (EUR mln) 1Q12 (EUR 611 mln) 771 809 21% 667 45% 9% 260 193 25% 803 631 210 376 611 Industry Lending 1Q11 2Q11 3Q11 4Q11 1Q12 General Lending & Transaction Services Und
Slide 21: Core Tier 1 ratio increased to 10.9%
Core Tier 1 ratio increased to 10.9% ING Bank core Tier 1 ratio (%) RWA, adjusted for divestments (EUR bln) 10.9% 297.2 299.6 10.0% 9.6% 9.6% 284.5 9.4% 282.8 280.7 14.1 10.9 4.3 4.2 4.8 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Total RWA Market RWA Further strengthening of core Tier 1 ratio
Slide 22: ING Insurance
ING Insurance First Quarter 2012 Results 22
Slide 23: Insurance operating result robust while underlying result continues to be impacted by MtM losses
Insurance operating result robust while underlying result continues to be impacted by MtM losses on hedges Insurance result (in EUR mln) Operating Non-operating Underlying result result + impact = before tax 689 36 671 428 563 511 527 -83 -18 478 475 -493 -18 -1,348 -1,826 1Q11 2Q11 3Q11 4Q11 1Q12 1
Slide 24: Investment spread remained resilient
Investment spread remained resilient Life general account invested assets (EUR bln) Investment spread (in bps)* Life GA 155 159 157 128 149 148 119 118 113 116 98 111 111 106 98 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Four-quarter rolling average One quarter stand-alone • Investment spread
Slide 25: Fees and premium-based revenues were up, while the technical margin was down
Fees and premium-based revenues were up, while the technical margin was down Fees and premium-based revenues Technical margin (in EUR mln) (in EUR mln) 516 478 510 483 458 262 196 750 172 141 687 658 646 138 629 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Fees on AuM (incl. VA cost of guarante
Slide 26: Administrative expenses/operating income remained stable at 41.9%
Administrative expenses/operating income remained stable at 41.9% Life & IM administrative expenses Life & IM administrative (EUR mln) expenses/operating income ratio (%) 60% 773 713 728 710 706 50% 42.0% 41.9% 39.6% 40.4% 40% 37.6% 30% 20% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 • Adminis
Slide 27: Operating result solid in EurAsia, with exceptionally strong results in Asia
Operating result solid in EurAsia, with exceptionally strong results in Asia Benelux (EUR mln) CRE (EUR mln) Asia/Pacific (EUR mln) 66 40 36 67 218 318 57 37 6 48 157 124 135 135 169 185 35 34 122 140 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Life & IIM operating res
Slide 28: Steady performance at Insurance US while Closed Block VA was impacted by losses on hedges
Steady performance at Insurance US while Closed Block VA was impacted by losses on hedges to protect capital Operating result US (EUR mln) Non-operating impacts US (EUR) 188 181 44 171 147 129 47 91 80 82 42 81 10 92 99 -66 -364 -83 63 67 -23 79 -1,361 31 60 55 39 14 17 -4 -1 -6 -7 -20 -5 1Q11 2Q11
Slide 29: US Closed Block VA Earnings Sensitivities Reflect Improved Reserve Adequacy
US Closed Block VA Earnings Sensitivities Reflect Improved Reserve Adequacy Estimated earnings sensitivities for • Reserve adequacy improved to the 64% 2Q2012 confidence level during the first quarter Equity Market EUR million* • Falling equity scenarios now lead to IFRS -25% 450 gains rather than l
Slide 30: New sales gained momentum in the first quarter
New sales gained momentum in the first quarter Sales (APE, in EUR million) • New sales increased 5.1% compared with 1Q11 due to 1,302 1,239 higher sales in Asia/Pacific, the US and CRE, and were partly 1,011 1,005 offset by lower sales in the 510 944 548 Benelux 417 451 • Compared with 4Q11, sales r
Slide 31: Capital position improves as Insurance focuses on protecting regulatory capital
Capital position improves as Insurance focuses on protecting regulatory capital Regulatory capital US operating ING Insurance Solvency I ratio* (in %) companies** (RBC in %) 244 493 492 488 500 232 224 225 225 456 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 • The Insurance Group Directive rati
Slide 32: Wrap up
Wrap up First Quarter 2012 Results 32
Slide 33: Key messages
Key messages • Group underlying net result of EUR 705 mln improved from the previous quarter but declined from a strong first quarter last year • Bank underlying pre-tax result rose 65.1% from the fourth quarter to EUR 1,126 mln, supported by lower impairments and lower de-risking losses, despite a
Slide 34: 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 2011 ING Group Annual Account