Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (May 2021)
44 slides from Ing Groep's debt investor presentation, May 6, 2021
Slide 1: ING Credit Update 1Q2021
ING Credit Update 1Q2021 ING Investor Relations 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: Business profile
Business profile 7
Slide 8: Well-diversified business mix with many profitable growth drivers
Well-diversified business mix with many profitable growth drivers Retail Banking Market Leaders Wholesale Banking Netherlands, • Focus on earning the Belgium, Luxembourg • Our business model is primary relationship similar throughout our • We use technology to offer global WB franchise a differentia
Slide 9: 1Q2021 results
1Q2021 results 9
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 16: 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 17: Capital
Capital 17
Slide 18: Total risk-weighted assets increased in 1Q2021
Total risk-weighted assets increased in 1Q2021, mainly as a result of increased volume and reflecting FX impacts ING Group risk-weighted assets development (in € bln) Credit RWA +€5.6 bln 3.7 -1.7 1.0 -1.1 0.2 0.1 0.2 311.0 2.3 306.3 4Q2020 FX Volume Overall profile Equity Models, Other Market Opera
Slide 19: Stable ING Group capital ratio at 15.5%, excluding profit reserved for distribution
Stable ING Group capital ratio at 15.5%, excluding €3,301 mln profit reserved for distribution ING Group Total capital ratio development (in %) +2.5% 19.8% +1.9% 15.5% +0.2% +0.1% -0.2% 15.5% ~12.5% 10.5% 4Q2020 Profit added Other capital RWA 1Q2021 AT1 Tier 2 1Q2021 Total Basel IV CET1 CET1 ratio t
Slide 20: Buffer to Maximum Distributable Amount remained strong at ~5%
Buffer to Maximum Distributable Amount remained strong at ~5% ING Group fully-loaded SREP ▪ ING Group’s fully-loaded CET1 requirement is 10.51% ▪ 4.50% Pillar 1 Requirement (P1R) MDA ▪ 0.98% Pillar 2 Requirement (P2R) restriction MDA level ▪ 2.50% Capital Conservation Buffer (CCB) restriction (14.78
Slide 21: 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 22: Funding & liquidity
Funding & liquidity 22
Slide 23: Issuance entities under our approach to resolution
Issuance entities under our approach to resolution Issuance entities Eligible instruments for TLAC/MREL Current Designated TLAC MREL req. resolution ING Groep N.V. entity ▪ Own funds (CET1 / AT1 / Tier 2) ✓ ✓ ▪ Senior unsecured debt (> 1 year) ✓ ✓ ▪ Own funds ✓ ✓ ING Bank N.V. ▪ Senior unsecured deb
Slide 24: Long-term debt maturity ladder and issuance activity in 1Q2021
Long-term debt maturity ladder and issuance activity in 1Q2021 Long-term debt maturity ladder (in € bln)* 12 10 8 6 4 2 0 Maturity Issuance Remainder 2022 2023 2024 2025 2026 2027 2028 2029 2030 >2030 1Q2021 1Q2021 of 2021 Covered Bank Senior HoldCo Tier 2 Issuance activity in 2021* ▪ Total issuance
Slide 25: ING's debt issuance programme in 2021
ING’s debt issuance programme in 2021 ING Group instruments (in € bln) Currency split Group / Bank issuance plan 86.0 27.7% 7.4% HoldCo Senior Senior debt issuance 24.3 7.8% 2.1% 16% ▪ Previous guidance from February 2021 remains unchanged, subject to 2.5% 0.7% balance sheet developments and Covid-1
Slide 26: Other subsidiaries remain active mainly through covered bond programmes
Other subsidiaries remain active mainly through their covered bond programmes ING Bank N.V. ING Belgium S.A./N.V ING Bank (Australia) Ltd ING Germany ING Bank Hipoteczny Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured
Slide 27: We aim to meet green funding needs to support sustainable finance portfolio
We aim to meet green funding needs to support the growth of our sustainable finance portfolio ING’s Green Bond Programme Green Covered Bonds ▪ ING’s Green Bond Framework is aligned with the ICMA Green ▪ As part of our Green Bond Programme, we aim to issue Bond Principles and a Second Party Opinion (
Slide 28: Strong and conservative balance sheet with customer deposits as primary funding
Strong and conservative balance sheet with customer deposits as the primary source of funding Balance sheet ING Group (in € bln) Well-diversified customer loan book ▪ Balance sheet ING Group increased to €981 bln in 1Q2021 ▪ See “Asset Quality” section of this presentation Assets Liabilities 937 981
Slide 29: Robust liquidity position
Robust liquidity position Funding mix* ING maintains a sizeable liquidity buffer 31 March 2021 ▪ ING’s funding consists mainly of retail deposits, corporate 3% 2% deposits and public debt 7% Customer deposits (retail) Customer deposits (corporate)** ▪ ING’s 12-month moving average LCR increased to 1
Slide 30: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING entities as of 5 May 2021 Latest rating actions on ING entities S&P Moody’s Fitch ▪ Fitch: ING Bank was upgraded to AA- in February 2019. In Stand-alone rating a baa1 a+ October 2020, Fitch affirmed ING Group’s and ING Ba
Slide 31: Asset quality
Asset quality 31
Slide 32: 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 33: 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 34: 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 35: 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 36: 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 37: Appendix
Appendix 37
Slide 38: Comfortable buffer to Additional Tier 1 trigger
Comfortable buffer to Additional Tier 1 trigger Buffer to AT1 trigger (in € bln) ING Group available distributable items (in € mln)** 31 March 2021 2020 48.1 Share premium 17,089 Other reserves 32,784 Legal and statutory reserves 2,334 €26.3 bln 8.5%* Non-distributable -9,831 Total 42,376 21.8 Accru
Slide 39: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Outstanding** Issued Reset spread USD* Feb-20 May-29 4.875% 750 750 UST + 351bps USD* Sep-19 Nov-26 5.750% 1,500 1,500 UST + 434bps USD Feb-19 Apr-24 6.750% 1,250 1,250
Slide 40: Most recent HoldCo Senior transactions
Most recent HoldCo Senior transactions HoldCo Senior Unsecured, EUR issuances ISIN Issue date First call date Maturity Tenor Coupon Currency Issued Spread XS2281155254 Jan-21 Feb-29 Feb-30 9NC8 0.25% EUR 1,500 m/s + 70 XS2258452478 Nov-20 Nov-28 Feb-29 8NC7 0.25% EUR 1,250 m/s + 68 XS2049154078 Sep-
Slide 41: ING Bank's covered bond programme
ING Bank’s covered bond programme… ▪ ING Bank NV €30 bln Hard and Soft Bullet Covered Bonds programme Redemption type* ▪ UCITS, CRR and ECBC Label compliant. Rated Aaa/AAA/AAA (Moody’s/S&P/Fitch) 3% 3% Interest Only 6% Investment ▪ This programme is used for external issuance purposes. There is a se
Slide 42: Benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, which seems unaffected by the economic uncertainty in the last year In March 2021, the Dutch Purchasing Managers Index (PMI) increased to the highest level in the last 10 years Dutch unemployment rates (%) decreased since August 2020 70 15 60 1
Slide 43: 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 44: 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