Ing Groep N.v. · EURONEXT:INGA
Ing Groep — ING Group — Q1 2017 Earnings Presentation
30 slides from Ing Groep's earnings presentation, May 10, 2017
Slide 1: First quarter 2017 Results
First quarter 2017 Results ING Group 1Q17 net profit of EUR 1,143 million Ralph Hamers, CEO ING Group Amsterdam • 10 May 2017
Slide 2: Key points
Key points • ING recorded 1Q17 net profit of EUR 1,143 mln; underlying pre-tax result up 39.3% from 1Q16 to EUR 1,652 mln • Strong results reflect continued loan growth, good cost control and low risk costs • Wholesale Banking results were particularly strong, led by higher income from Financial Mar
Slide 3: Our focus on primary customer relationships drives value
Our focus on primary customer relationships drives value 1Q17 net customer growth 1Q17 core lending growth 1Q17 Net Promoter Scores (NPS) +300k total customers +150k #1 in 8 of primary customers EUR +5.7 bln 13 retail countries Consumer lending Assets under management Commission income Retail C&GM R
Slide 4: Transformation programmes on track
Transformation programmes on track Four major digital transformation programmes Estimated impact of digital transformation programmes (in EUR mln) Orange Bridge* • Agreement on a Social Plan with trade union partners in Belgium • Transformation governance in place Model Bank • Ramp up of central IT
Slide 5: New innovations developed internally and with fintechs
New innovations developed internally and with fintechs Payconiq launch in the Netherlands TWYP/TWYP Cash > 530,000 users We are working with 94 fintechs • Scaling up in-house initiatives • Mobile payments platform • TWYP is peer-to-peer payment • Active fintech partnerships created by ING app in Spa
Slide 6: 1Q17 results
1Q17 results 6
Slide 7: First quarter results re-confirm our strategic roadmap
First quarter results re-confirm our strategic roadmap 2016-2020 roadmap – 3 October 2016 Investor Day • Absolute cost savings clearly visible in Retail Benelux, particularly in the Netherlands • Retail C&GM grows revenues fast; upfront investment to attract primary customers and further digitalise
Slide 8: Strong pre-tax result despite seasonally high regulatory costs
Strong pre-tax result despite seasonally high regulatory costs Underlying pre-tax result Volatile items and regulatory costs Pre-tax result excl. volatile items (in EUR mln) (in EUR mln) and regulatory costs (in EUR mln) 1Q16 2Q16 3Q16 4Q16 1Q17 2,125 2,009 2,036 200 CVA/DVA 35 -54 -72 14 30 1,897 1
Slide 9: Robust NII result supported by margin resilience
Robust NII result supported by margin resilience Net interest income excl. Financial Markets (in EUR mln) Net interest margin remains stable (in bps) +4.4% 3,247 3,263 155 3,191 3,235 151 150 152 152 3,124 150 152 152 147 148 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 NIM NIM (4-quarter rolli
Slide 10: Our core lending franchises grew by EUR 5.7 bln in 1Q17
Our core lending franchises grew by EUR 5.7 bln in 1Q17 Customer lending ING Group 1Q17 (in EUR bln) Core lending businesses: EUR 5.7 bln 3.5 -0.2 -0.9 1.0 -0.4 566.7 2.1 -0.3 561.4 -0.8 0.8 0.6 31/12/16 Retail Retail Retail Retail WB Industry WB General WB Other* Lease run- Bank FX / 31/03/17 NL Be
Slide 11: Think Forward strategy delivers on changing asset mix
Think Forward strategy delivers on changing asset mix Mortgage concentration down to 50% C&GM growth leads to better matched balance sheets Total customer lending Total customer lending EUR 567 bln 9% EUR 567 bln 11% EUR 494 bln 10% EUR 494 bln 11% 8% 21% 10% 9% 6% 20% 5% 15% 35% 22% 28% 32% 19% 20%
Slide 12: Commission income records solid gains; FM has good 1Q17
Commission income records solid gains; FM has good 1Q17 Commission income strong on WB fee growth Underlying income Financial Markets excl. CVA/DVA (in EUR mln) (in EUR mln) 682 379 607 610 605 611 321 280 279 245 252 251 273 244 235 303 232 138 121 114 173 108 110 132 152 249 228 230 223 265 124 13
Slide 13: Operating expenses stable; seasonally high regulatory costs
Operating expenses stable; seasonally high regulatory costs Underlying operating expenses (in EUR mln) Regulatory costs experience seasonality (in EUR mln) 496 474 209 2,140 2,157 2,155 2,159 2,137 75 65 1Q16 2Q16 3Q16 4Q16 1Q17 1Q 2Q 3Q 4Q Expenses Regulatory costs 2016 2017 • Underlying expenses r
Slide 14: Risk environment remains benign; NPLs trending down
Risk environment remains benign; NPLs trending down Risk costs (in EUR mln) NPL ratio 307 2.6% 2.5% 265 265 2.4% 2.4% 123 2.3% 2.3% 2.3% 97 2.2% 117 2.1% 138 133 2.2% 2.2% 2.0% 77 2.1% 74 31 67 35 2.0% 57 42 45 1.9% 32 51 36 36 49 50 43 29 17 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 Wholesa
Slide 15: Think Forward strategy at work in Australia
Think Forward strategy at work in Australia NPS aided by expanded product range Primary customer growth (in 000s) 1Q17 customer acquisition by product #1 NPS Score in Australia 1,533 1,580 1,680 1,731 (+27 points vs. best major 42% 38% 15% 5% competitor) 273 244 171 Payments and Savings Digital plat
Slide 16: Group CET1 ratio up to 14.5%; interim profits partly reserved
Group CET1 ratio up to 14.5%; interim profits partly reserved ING Group 1Q17 fully-loaded capital ratios* 3.3% 20.0% 2.1% 14.2% 0.1% 0.2% 14.5% 4Q16 Group CET1 Net profit included RWA & Other 1Q17 Group CET1 Additional Tier 1 Tier 2 1Q17 Total capital in CET1** ratio • ING Group’s 1Q17 fully-loaded
Slide 17: Ambition 2020 – ING Group Financial Targets
Ambition 2020 – ING Group Financial Targets Actual 2016 Actual 1Q17 Ambition 2020* • CET1 ratio (%) 14.2% 14.5% > Prevailing fully-loaded requirements** Capital • Leverage ratio (%) 4.8% 4.5% > 4% • Underlying C/I ratio (%)*** 54.2% 53.1% 50-52% Profitability • Underlying ROE (%)*** 10.1% 10.8% Awai
Slide 18: Wholesale Banking
Wholesale Banking 18
Slide 19: Wholesale Banking delivers excellent quarterly result
Wholesale Banking delivers excellent quarterly result Underlying pre-tax result (in EUR mln) Underlying return on equity* (4-quarter rolling average) 758 813 748 638 11.7% 9.6% 10.5% 524 8.7% 9.1% 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 1Q17 underlying pre-tax result by product group 1Q17
Slide 20: WB lending growth and low risk costs underpin performance
WB lending growth and low risk costs underpin performance NII and fee income (in EUR mln) Underlying cost/income ratio (4-quarter rolling average) +11.6% +8.1% 48.9% 49.5% 48.5% 251 273 244 235 280 45.9% 44.5% 801 826 826 852 866 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 Net interest income
Slide 21: ING leading the way in Wholesale Banking innovation
ING leading the way in Wholesale Banking innovation Easy Trading Connect on the verge of digitalising an ING continues to contribute to a sustainable world age-old sector • We financed the Green Highland Hydro project, a portfolio • ING successfully completed the first test of a large oil of 10 hydr
Slide 22: Wrap up
Wrap up 22
Slide 23: Wrap up
Wrap up • ING recorded 1Q17 net profit of EUR 1,143 mln; underlying pre-tax result up 39.3% from 1Q16 to EUR 1,652 mln • Strong results reflect continued loan growth, good cost control and low risk costs • Wholesale Banking results were particularly strong, led by higher income from Financial Market
Slide 24: Appendix
Appendix 24
Slide 25: Group CET1 ratio at 14.5% and Group ROE at 10.8%
Group CET1 ratio at 14.5% and Group ROE at 10.8% Group fully-loaded CET1 ratio development during 1Q17 Changes to Group ROE calculation in 1Q17 (amounts in EUR bln and %) (in EUR mln) Capital RWA Ratio Change As of 31 March 2017 Actuals December 2016 44.6 314.3 14.2% IFRS-EU shareholders’ equity 50,
Slide 26: Further client savings rate adjustments in our home markets
Further client savings rate adjustments in our home markets 1Q17 retail customer deposits, breakdown by segment* Core savings rate reductions skewed towards quarter-end 25% 30% • In 1Q17, we reduced Dutch savings rates twice by 5 bps (January and March). There was another 5 bps cut on EUR 9 May 467
Slide 27: Lending credit outstandings are well-diversified
Lending credit outstandings are well-diversified ING Group* Retail Banking* Wholesale Banking* 6% 6% 1% 15% 30% 15% 36% EUR 4% EUR EUR 44% 646 411 234 64% bln bln bln 16% 21% 8% 12% 9% 13% Retail Banking Mortgages Netherlands Structured Finance Wholesale Banking Other lending Netherlands Real Estate
Slide 28: Lending credit outstandings Wholesale Banking well-diversified by geography and sector
Lending credit outstandings Wholesale Banking well-diversified by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (1Q17)* Lending Credit O/S Wholesale Banking (1Q17)* 1% NL 3% Builders & Contractors 12% 5% 7% 5% 19% Belux
Slide 29: Detailed NPL disclosure on selected lending portfolios
Detailed NPL disclosure on selected lending portfolios Selected lending portfolios Lending credit NPL ratio Lending credit NPL ratio Lending credit NPL ratio O/S 1Q17 1Q17 O/S 4Q16 4Q16 O/S 1Q16 1Q16 Wholesale Banking 234,175 2.3% 224,916 2.4% 204,240 2.6% Industry Lending 131,979 2.4% 131,221 2.4%
Slide 30: Important legal information
Important legal information Projects may be subject to regulatory approvals. Insofar as they could have an impact in Belgium, all projects described are proposed intentions of the bank. No formal decisions will be taken until the information and consultation phases with the Work Council have been pr