Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Debt Investor Presentation (February 2022)
46 slides from Ing Groep's debt investor presentation, Feb 3, 2022
Slide 1: ING Credit Update 4Q2021
ING Credit Update 4Q2021 ING Investor Relations 3 February 2022
Slide 2: Key points
Key points ▪ In 2021 our business model proved its strength under challenging conditions, as more Retail customers chose ING as their primary bank and a growing number of businesses turned to ING to support their green transition efforts ▪ Further growth of mobile interactions, with mobile becoming
Slide 3: FY2021 results
FY2021 results 3
Slide 4: Customers recognise ING's strengths
Customers recognise ING’s strengths Our primary customer base (in mln) Sustainability deals** (#) 317 30.5% 32.8% 34.3% 35.4% 37.4% 13.8 14.3 13.3 12.5 11.4 139 124 64 28 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Primary as a % of total retail customers ▪ In 2021 our primary customer base gr
Slide 5: Mobile became the main channel for our customers
Mobile became the main channel for our customers Annual mobile non-deposit sales per Mobile-only active customers (in mln)* % mobile in interactions with ING 1,000 active customers (in #) 51% 91% 97 87% 40% 37% 82% 74 11.0 62 26% 8.7 73% 7.9 46 19% 5.2 63% 28 3.6 2017 2018 2019 2020 2021 2017 2018 2
Slide 6: Focus on diversifying income offset pressure on liability income
Focus on diversifying income offset pressure on liability income Net core lending and deposit growth Fee and commission income (in € bln) (in € bln) Total income* (in € bln) Δ € CAGR 41.4 18.1 18.3 18.5 +7% 17.7 17.6 3.5 36.6 7% 8% 7% 7% +2% 6% 3.0 30.6 15% 15% 16% 17% 19% +7% 2.7 2.8 2.9 26.9 23.4
Slide 7: NII stable, strong 17% fee growth in 2021
NII stable, strong 17% fee growth in 2021 Net interest income* (in € mln) Net fee & commission income per product category (in € mln) 3,517 13,714 13,916 14,079 13,604 13,615 483 2,868 3,011 2,714 2,803 1,064 832 850 668 761 924 850 13,132 1,022 1,021 963 881 1,040 682 678 670 341 343 403 430 489 20
Slide 8: Continued focus and measures taken on expenses
Continued focus and measures taken on expenses Regulatory expenses (in € bln) ▪ Higher FY2021 costs were driven by higher regulatory costs, 1.3 mainly due to an incidental 50% increase in the Dutch bank 1.0 1.1 tax for 2021 0.9 0.9 0.4 0.4 0.4 ▪ FY2021 expenses further included €522 mln of incidenta
Slide 9: FY2021 risk costs well below through-the-cycle average
FY2021 risk costs well below through-the-cycle average Risk costs (in € mln and in bps over customer lending) Stage 3 ratio 2,675 1.9% 1.7% 1.5% 1.5% 43 1.4% 1,120 676 656 516 18 12 11 8 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 ▪ Risk costs for 2021 were €516 mln, or 8 bps over average cust
Slide 10: Our 10-12% ROE ambition
Our 10-12% ROE ambition CET1 ratio and Return on Equity ▪ We run ING with a 10-12% through-the-cycle ROE ambition 15.9% ▪ 2021 ROE recovered, mainly reflecting lower IFRS 9 15.5% provisioning, while still being affected by several sizeable 14.7% negative incidentals in the P&L, other Covid-19 relate
Slide 11: ING Group financial ambitions
ING Group financial ambitions Actual 2020 Actual 2021 Financial ambitions ~12.5%* Capital ▪ CET1 ratio (%) 15.5% 15.9% (Basel IV) ▪ ROE (%)** 4.8% 9.2% 10-12% (IFRS-EU Equity) Profitability ▪ C/I ratio (%)** 63.2% 60.5% 50-52% Distribution ▪ Distribution (per share) €0.12*** €0.89**** 50% pay-out ra
Slide 12: Business profile
Business profile 12
Slide 13: 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 14: 4Q2021 results
4Q2021 results 14
Slide 15: Resilient NII; 4-quarter rolling average NIM broadly stable at 139 bps
Resilient NII; 4-quarter rolling average NIM broadly stable at 139 bps Net interest income (in € mln) Net Interest Margin (in bps) 3,344 3,513 3,340 3,388 3,374 233 83 84 84 146 144 140 140 139 3,344 3,280 3,257 3,304 3,290 141 142 138 137 136 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 4Q2020 1Q2021 2Q2021
Slide 16: Sustained mortgage growth, higher demand in WB
Sustained mortgage growth, higher demand in WB Customer lending 4Q2021 (in € bln) Core lending businesses: €13.4 bln 6.0 0.8 1.9 -0.3 -0.8 1.3 632.8 2.2 2.2 619.2 0.0 0.3 3Q2021 Retail NL Retail Retail Retail Other WB Lending WB DB&TF* WB Other* Lease / WUB Treasury FX / Other ** 4Q2021 Belgium Germ
Slide 17: Fee income strong
Fee income strong Net fee & commission income per business line (in € mln) Net fee & commission income per product category (in € mln) 882 925 882 925 854 855 854 855 771 771 105 140 322 113 130 278 302 295 94 255 247 261 233 284 248 278 232 247 269 235 220 253 232 198 219 281 295 322 338 336 246 23
Slide 18: Operating expenses under control
Operating expenses under control Expenses (in € mln) ▪ Expenses included €166 mln of incidental items, mainly due to €141 mln redundancy provisions and impairments related 2,914 3,016 2,947 to the announced discontinuation of the retail banking activities in France. This compares to €223 mln of inci
Slide 19: 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 346 7.6% 7.0% 209 6.7% 6.7% 222 216 6.3% 30 5.8% 6.0% 6.0% 193 85 39 6.2% 5.3% 5.2% 19 35 5.9% 1.8% 1.8% 1.8% 1.7% 1.7% 66 107 35 96 95 5.2% 23 4.9% 4.7% -50 -76 1.7% 1.6% -149
Slide 20: Capital
Capital 20
Slide 21: Total risk-weighted assets increased in 4Q2021
Total risk-weighted assets increased in 4Q2021, reflecting higher lending volumes and higher market RWA ING Group risk-weighted assets development (in € bln) Credit RWA €-2.2 bln 3.8 -3.8 1.2 313.1 1.0 -1.0 3.6 310.5 -2.3 3Q2021 FX Volume Overall profile of Models, Other Market Operational 4Q2021 RW
Slide 22: Strong ING Group CET1 ratio at 15.9%
Strong ING Group CET1 ratio at 15.9%, excluding €1,568 mln profit reserved for distribution ING Group Total capital ratio development (in %) +2.9% 21.0% +2.2% 15.8% +0.2% +0.0% -0.1% 15.9% ~12.5% 10.5% 3Q2021 Profit added Other capital RWA 4Q2021 AT1 Tier 2 4Q2021 Total Basel IV CET1 CET1 ratio to C
Slide 23: Buffer to fully-loaded Maximum Distributable Amount remained strong at ~5%
Buffer to fully-loaded Maximum Distributable Amount, including announced CCyB increases, remained strong at ~5% ING Group fully-loaded SREP ▪ ING Group’s fully-loaded CET1 requirement is 10.71% ▪ 4.50% Pillar 1 Requirement (P1R) MDA ▪ 0.98% Pillar 2 Requirement (P2R) restriction MDA level ▪ 2.50% Ca
Slide 24: ING's distribution plans in 2022 and beyond
ING’s distribution plans in 2022 and beyond ING’s Distribution Policy Distribution in 2022 and beyond ▪ Pay-out ratio of 50% of resilient net profit ▪ We are on track to reach our 10-12% ROE ambition ▪ Net profit adjusted for significant items not linked to the ▪ In line with our policy, we intend t
Slide 25: Funding & liquidity
Funding & liquidity 25
Slide 26: Issuance entities under our approach to resolution
Issuance entities under our approach to resolution Issuance entities Eligible instruments for TLAC/MREL Designated TLAC MREL 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 debt (> 1 year)
Slide 27: ING meets its regulatory capital requirements
ING meets its regulatory capital requirements TLAC as % of RWA (and LR) MREL as % of RWA (and LR) 30.61% 30.63% 0.13% 0.15% 27.32% 28.07% 9.46% 23.03% 9.46% 5.23% 21.03% 5.03% 2.93% 5.03% 2.93% 2.19% 5.03% 2.19% 22.29% 22.84% 15.89% 16.00% 18.00% 15.89% 4Q2021 Requirement 4Q2021 Requirement 1/1/2022
Slide 28: Long-term debt maturity ladder and issuance guidance
Long-term debt maturity ladder and issuance guidance Issuance guidance 2022 Currency Split ▪ Guidance on HoldCo Senior issuances for 2022 is ~€8-10 bln, HoldCo Senior Tier 2 AT1 subject to balance sheet developments 2% 14% 21% 78% 100% ▪ Covered bonds to be issued from various programmes in 2022 ▪ O
Slide 29: Covered bond funding through various programmes
Covered bond funding through various programmes ING Bank N.V. ING Belgium S.A./N.V. ING Bank (Australia) Ltd ING DiBa AG ING Bank Hipoteczny Instruments ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding ▪ Secured funding overview ▪ Senior unsecured ▪ Covered bond*: €14.7 bln ▪
Slide 30: We issue green bonds to support meeting our sustainability objectives
We issue green bonds to support meeting our sustainability objectives 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 (SPO) has been covered bo
Slide 31: 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 decreased to €951 bln in 4Q2021 ▪ See “Asset Quality” section of this presentation Assets Liabilities 989 989
Slide 32: Robust liquidity position with a 12-month moving average LCR of 139%
Robust liquidity position with a 12-month moving average LCR of 139% Funding mix* ING maintains a sizeable liquidity buffer 31 December 2021 ▪ ING’s funding consists mainly of retail deposits, corporate 3% 2% deposits and public debt 5% Customer deposits (retail) 8% Customer deposits (corporate)** ▪
Slide 33: Strong rating profile at both Group and Bank levels
Strong rating profile at both Group and Bank levels Main credit ratings of ING as of 2 February 2022 Latest rating actions on ING Group and Bank S&P Moody’s Fitch ▪ Fitch: ING Bank was upgraded to AA- in February 2019. In Stand-alone rating a baa1 a+ November 2021, Fitch affirmed ING Group’s and ING
Slide 34: Asset quality
Asset quality 34
Slide 35: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity ING Group* Retail Banking* Wholesale Banking* Lending credit O/S* 4Q2021 Lending credit O/S* 4Q2021 Lending credit O/S* 4Q2021 10% 7% 23% 19% 38% 16% 20% 3% €787 €488 €488 €300 6% bln bln bln bln 8% 5% 54% 18% 9% 24% 62% 65% 13% Retail Banking
Slide 36: Our lending book is senior and well-collateralised
Our lending book is senior and well-collateralised Residential ▪ Average LTV of 57% with low Stage 3 ratio at 1.1% Mortgages ▪ Risk metrics remained strong €317 bln 6% Consumer Lending ▪ Relatively small book, risk metrics slightly improved 40% €27 bln 38% €787 bln ▪ Limited exposure to most vulnera
Slide 37: Provisioning per Stage
Provisioning per Stage Stage 1 provisioning (in € mln) Stage 2 provisioning (in € mln) Stage 3 provisioning (in € mln) 428 385 -30 -40 1 4 -168 63 2 3 7 11 -46 -7 -7 -86 -32 -43 56 -235 -201 36 8 8 300 220 237 -95 -42 -83 -110 -95 189 173 -159 169 135 -125 177 165 -73 127 54 68 4Q2020 1Q2021 2Q2021
Slide 38: Wholesale Banking lending
Wholesale Banking lending Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S* Wholesale Banking Lending Credit O/S* Wholesale Banking 1% NL 1% 10% Real Estate, Infra & Construction 13% 23% Belux Commodities, Food & Agri 23% 2% Germany TMT & Healthcare 16% Other Ch
Slide 39: Appendix
Appendix 39
Slide 40: 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 December 2021 2021 49.8 Share premium 17,105 Other reserves 31,940 Legal and statutory reserves 1,069 €27.8 bln 8.9%* Non-distributable -8,205 Total 41,909 21.9 Ac
Slide 41: Outstanding benchmark capital securities
Outstanding benchmark capital securities (Additional) Tier 1 securities issued by Group Currency Issue date First call date Coupon Outstanding (mln)** Reset spread USD* Sep-21 May-27 3.875% 1,000 UST + 286bps USD* Sep-21 May-31 4.250% 1,000 UST + 286bps USD Feb-20 May-29 4.875% 750 UST + 351bps USD*
Slide 42: HoldCo Senior transactions in past 12 months
HoldCo Senior transactions in past 12 months HoldCo Senior Unsecured, EUR issuances ISIN Issue date First call date Maturity Tenor Coupon Currency Issued (€ mln) Reset spread XS2421195178 Dec-21 Feb-33 Feb-34 12NC11 0.98% EUR 100 3mE + 82 XS2413697140 Nov-21 Nov-29 Nov-30 9NC8 0.88% EUR 750 3mE + 88
Slide 43: 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) 2% 2% Interest Only 4% ▪ This programme is used for external issuance purposes. There is a separate €15
Slide 44: Benefits from a continued strong Dutch housing market
…benefits from a continued strong Dutch housing market, which seems unaffected by economic uncertainty during the pandemic Dutch Purchasing Managers Index (PMI) indicating industrial Dutch unemployment rates (%) continue to decrease since growth, but decreased to 58.7 after new lockdown measures Aug
Slide 45: Volatile items 4Q2021
Volatile items 4Q2021 Volatile items and regulatory costs (in € mln) 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 WB/FM – valuation adjustments -13 11 11 38 3 Capital gains/losses 3 36 -2 6 5 Hedge ineffectiveness -59 23 11 7 -24 Other items income* 0 233 155 50 92 Total volatile items – income -69 303 175 10
Slide 46: 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
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