ING Groep N.V. · EURONEXT:INGA
ING Groep — ING Benelux Conference 2013
28 slides from ING Groep's conference presentation, Jun 4, 2013
Slide 1: ING Commercial Banking: Extracting more value from the existing franchise
ING Commercial Banking Extracting more value from the existing franchise ING Benelux Conference William Connelly CEO Commercial Banking New York – 4 June 2013 www.ing.com
Slide 2: Extracting more value from the existing franchise
Extracting more value from the existing franchise • ING Bank continues to show solid results, supported by strong Commercial Banking performance • ING Commercial Bank is client focused, supported by strong product capabilities and an international network spanning over 40 countries • Following balan
Slide 3: ING Bank posted a strong first quarter of 2013
ING Bank posted a strong first quarter of 2013 Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 1,730 1,590 1,550 1,664 1,151 1,110 1,169 1,011 871 283 -439 -540 -554 -589 -561 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q
Slide 4: ING Commercial Banking contributed almost 50% of total Bank pre-tax profit in 1Q13
ING Commercial Banking contributed almost 50% of total Bank pre-tax profit in 1Q13 Bank: Pre-tax result in 1Q13 (%)* Commercial Bank: Pre-tax result in 1Q13 by product (%)** 19% 33% 38% 49% 32% 29% Commercial Banking Industry Lending Retail Banking Benelux General Lending & Transaction Services Reta
Slide 5: Commercial Banking RoE of 13.8% in 1Q13 despite high level of risk costs
Commercial Banking RoE of 13.8% in 1Q13 despite high level of risk costs Return on Equity (based on CT-1 ratio of 10%) Gross result (In EUR mln) 13.8% 2,706 2,500 2,590 11.6% 11.3% 12.5% 2,249 9.0% 1,346 5.3% 3.4% 795 807 2008 2009 2010 2011 2012 1Q12 1Q13 2008 2009 2010 2011 2012 1Q12 1Q13 Addition
Slide 6: Strict cost discipline resulted in efficiency among the best in the industry
Strict cost discipline resulted in efficiency which is among the best in the industry ING Commercial Banking cost / income ratio ING Commercial Banking operating expenses (EUR mln) 64% -10.3% 2,643 2,524 52% 2,372 49% 50% 48% 43% 43% 608 604 2008 2009 2010 2011 2012 1Q12 1Q13 2010 2011 2012 1Q12 1Q1
Slide 7: Cost-savings programme on track
Cost-savings programme on track Cumulative cost savings (in EUR mln) Cost savings programme on track • In 3Q12, a cost-saving initiative was announced for Commercial Banking to improve future performance and reduce annual expenses by a combined EUR 260 mln by 2015 and EUR 315 mln by 2016 315 260 • S
Slide 8: Commercial Banking is mitigating the RWA impact of Basel 2.5 and 3
Commercial Banking is mitigating the RWA impact of Basel 2.5 and 3 RWA Commercial Banking (in EUR bln) 9 -12 8 -4 -3 145 136 134 130 3Q11 Impact 4Q11 Management Other 1Q13 Impact Management Pro-forma Basel 2 Basel 2.5 Basel 2.5 actions Basel 2.5 Basel 3 actions Basel 3 • Risk weighted assets for Com
Slide 9: Client-focused Commercial Bank
Client-focused Commercial Bank ING Benelux Conference - 4 June 2013 9
Slide 10: ING is the leading Commercial Bank in the Benelux
ING is the leading Commercial Bank in the Benelux Leading Commercial Bank in the Benelux Leading commercial bank in the Benelux (2012) • ING is the leading Commercial Bank in the Netherlands Netherlands Belgium for the 4th consecutive year. ING is the nr 2 Commercial Bank in Belgium #1 #2 • ING’s fo
Slide 11: Commercial Banking has strong regional positions and world-class franchises
Commercial Banking has strong regional positions and world-class franchises Leading Commercial Bank in the Extensive global network with special Global franchises in Specialised Benelux with a strong position in CEE focus in Europe Finance and Financial Markets • Leading bank in The Netherlands – •
Slide 12: Strategy going forward: strengthening client relationships and attractive returns
Strategy going forward is aimed at further strengthening of client relationships and attractive returns • Further strengthen leadership positions in core markets/products • Optimise client coverage/service model Further improve client service • Streamlined Operations, IT and Support model and • Cont
Slide 13: ING Bank is well positioned to selectively grow the loan book
ING Bank is well positioned to selectively grow the loan book ING Benelux Conference - 4 June 2013 13
Slide 14: ING Bank meets most Basel 3 requirements
ING Bank meets most Basel 3 requirements Priorities for 2012-2013 set at the IR Day in January 2012 Balance sheet and RWA reduced strongly (in EUR bln) Accelerate transition to Basel III 974 851 Limit balance sheet and RWA growth Execute balance sheet optimisation 320 278 Further simplify th
Slide 15: Strong funding profile allows Bank to grow loan book
Strong funding profile allows Bank to grow loan book Net inflow in funds entrusted (in EUR bln) Net loan growth (client balances, in EUR bln) 5.3 -1.8 11.0 8.2 16.5 2.8 2.9 -2.9 -2.5 2.5 5.8 3.2 0.8 4.2 1.1 4.9 3.3 1.9 2.3 1.8 2.3 11.4 10.6 -0.3 6.1 6.2 -1.4 -1.0 4.3 -3.0 -4.5 -5.3 -6.1 -6.1 -0.8 1Q
Slide 16: ING will selectively grow its Structured Finance assets
ING will selectively grow its Structured Finance assets Lending assets Industry Lending Lending assets: REF assets decreasing, being redeployed in (in %, 1Q13) Structured Finance assets (in EUR bln) 0.5% 37.6% 42 43 44 44 48 EUR 78 bln Structured Finance 34 34 33 30 29 Real Estate Finance 61.9% 2009
Slide 17: Structured Finance: high RoE and well diversified
Structured Finance: high RoE and well diversified Structured Finance income (EUR mln) Structured Finance lending assets by sector (in %, 1Q13) 291 433 366 25% Energy, Transport & Infrastructure (ETIG) EUR 47% 1033 1022 1007 International Trade & Export 83 91 48 bln Finance (ITEF) 244 255 28% Special
Slide 18: Risk costs Structured Finance concentrated in a small legacy portfolio
Risk costs Structured Finance concentrated in a small legacy portfolio Underlying loan loss provisions in bps of average RWA Loan loss provisioning (EUR mln) 118 75 74 67 55 47 40 37 22 2010 2011 2012 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 Structured Finance • Low risk profile International Trade and Export
Slide 19: Repricing, asset growth and lower funding costs support net interest margin
Repricing, asset growth and lower funding costs support the net interest margin development Illustrative return (in bps) Funding costs (in bps) Mid Mid Mid YE EUR, above swap per tenor 2010 2011 2012 2012 A-rated Investment 90 70 105 85 Grade Corporate Facilities Drawn Margin Project Finance 120 175
Slide 20: Risk costs on Real Estate Finance remain elevated
Risk costs on Real Estate Finance remain elevated Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (1Q13) 120 111 12% Netherlands 102 103 5% Americas 6% Spain 45 52% France 6% Italy 8% UK Other 1Q12 2Q12 3Q12 4Q12 1Q13 11% Non-performing loans ratio (in %) • Risk costs f
Slide 21: Dutch REF portfolio is well diversified
Dutch REF portfolio is well diversified REF NL portfolio by sector (31 Mar 13) Price development NL (ROZ/IPD indices, %) 6% 2% 100 96 100 100 86 13% 72 34% EUR Retail 16 bln Offices 18% Residential Industrial Other Retail indices Office indices Residential indices 27% Unsecured 2007 2008 2009 2010 2
Slide 22: Financial Markets is a profitable, focused franchise
Financial Markets is a profitable, focused franchise ING Benelux Conference - 4 June 2013 22
Slide 23: Financial Markets provides hedging and financing solutions to corporate and institutional clients
Financial Markets provides hedging and financing solutions to corporate and institutional clients FM – Income by product FM – Income by Geography FM – Income by Client Segment, 1Q13* 1Q13*,** 1Q13* 16% 10% 42% 53% 45% 21% 58% 45% 10% Rates & FX Developed markets Corporate Clients Credit Trading Emer
Slide 24: Financial Markets is a profitable business
Financial Markets is a profitable business Income Financial Markets impacted by CVA/DVA Income Financial Markets (excl. CVA/DVA) impacted by (in EUR mln) seasonality (in EUR mln) Financial 472 1,328 423 412 1,179 markets 1,124 357 (reported) 316 314 217 226 1,336 Financial 1,254 markets (excl. 127 8
Slide 25: Strategy of Financial Markets going forward in a Basel 3 world
Strategy of Financial Markets going forward in a Basel 3 world • Continue to invest and grow market share in areas of strength such as Debt Capital Markets and Interest Rates in the "Home Markets“ Further • Capitalise on leadership position in the "International Markets" in strategic strengthen loca
Slide 26: On track to reach a sustainable RoE of at least 13%
On track to reach a sustainable RoE of at least 13% ING Benelux Conference - 4 June 2013 26
Slide 27: On track to reach a sustainable RoE of at least 13%
On track to reach a sustainable RoE of at least 13% Management actions offsetting RWA impact of new Increase returns regulation* • Further strengthen leadership positions in core RWA (in EUR bln) markets/products • Continue to invest in product capabilities • Increase cross-sell • Leverage network f
Slide 28: 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 1Q2013 ING Group Interim Acco