Ing Groep N.v. · EURONEXT:INGA
Ing Groep — ING Group — Q2 2017 Earnings Presentation
28 slides from Ing Groep's earnings presentation, Aug 2, 2017
Slide 1: Second quarter 2017 Results
Second quarter 2017 Results ING Group 2Q17 net profit of EUR 1,371 million Ralph Hamers, CEO ING Group Amsterdam • 2 August 2017
Slide 2: Key points
Key points • ING recorded 2Q17 net profit of EUR 1,371 mln, up 5.9% from the same period last year • Strong results reflect continued loan growth at resilient margins and relatively low risk costs • Our geographic footprint and product diversity enable us to continue to capture profitable growth • T
Slide 3: Our focus on primary customer relationships drives value
Our focus on primary customer relationships drives value 10 mln primary customers; many countries contributing Core lending Customer deposits >14 1H17 net growth 1H17 net growth 10.1 >10 +12.1 bln +12.1 bln 9.0 9.7 8.4 EUR EUR 2014 2015 2016 1H17 Ambition Ambition Commission income Net Promoter Scor
Slide 4: Transformation programmes – important steps taken in 2Q17
Transformation programmes – important steps taken in 2Q17 Four major digital transformation programmes Estimated impact of digital transformation programmes (in EUR mln) Orange Bridge* • Shared delivery organisation and shift to ‘Agile’ way of working in Belgium in progress • Target segment-service-
Slide 5: Becoming the go-to platform for all financial needs
Becoming the go-to platform for all financial needs Yolt now available for testing Strategic investment in Fintonic Innovation is in our DNA 786 ideas submitted from employees in 22 countries • Yolt is our money management • In addition to Yolt, ING made an This year’s winners: platform in the UK, d
Slide 6: Innovative financing structures support our sustainability vision
Innovative financing structures support our sustainability vision Energy Transition Circular Economy Water ING Economics Department publishes “Asset ownership will be replaced by pay- ING was the only commercial bank report named “Breakthrough of electric per-use models, which in turn will require g
Slide 7: Think Forward delivers on growth and cross-buy in C&GM
Think Forward delivers on growth and cross-buy in C&GM Primary customers (in mln) Headcount (FTEs) Commission income (in EUR mln) +7.2% +0.6% +21.1% 5.0 24,886 399 4.6 24,741 329 2016 1H17 2016 1H17 1H16 1H17 Loan-to-deposit ratio (in %) Consumer & SME lending (in EUR bln) Asset under Management* (i
Slide 8: Strong results deliver > 10% underlying ROE at Group level…
Strong results deliver > 10% underlying ROE at Group level… Underlying net result improves further (in EUR mln) Underlying ROE progression despite higher CET1 capital 10.8% 10.1% CAGR +20.6% 4,976 8.6% 4,219 7.2% +14.1% 14.2% 14.5% 3,424 2,578 12.7% 2,259 10.5% 2014 2015 2016 1H16 1H17 2014 2015 201
Slide 9: …supported by healthy NII and fee income growth
…supported by healthy NII and fee income growth Underlying income Net interest result excl. FM Commission income (in EUR bln) (in EUR bln) (in EUR bln) CAGR +6.8% 17.5 CAGR +4.8% 16.6 15.3 12.8 11.6 12.2 +3.4% +3.8% CAGR +3.1% 8.6 8.9 2.3 2.3 2.4 +14.7% 6.3 6.6 1.4 1.2 2014 2015 2016 1H16 1H17 2014
Slide 10: 2Q17 results
2Q17 results 10
Slide 11: Robust NII supported by volume growth and margin resilience
Robust NII supported by volume growth and margin resilience Net interest income excl. Financial Markets (in EUR mln) Net interest margin remains broadly stable (in bps) +3.2% 3,263 3,294 155 3,247 3,235 150 152 152 152 3,191 150 152 152 151 148 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 NIM N
Slide 12: Our core lending franchises grew by EUR 6.4 bln in 2Q17
Our core lending franchises grew by EUR 6.4 bln in 2Q17 Customer lending ING Group 2Q17 (in EUR bln) Core lending businesses: EUR 6.4 bln 2.8 -7.7 1.5 0.4 0.1 -0.8 2.6 566.7 -0.3 1.2 0.9 567.4 31/03/17 Retail Retail Retail Retail WB Industry WB General WB Other* Lease run- Bank FX / 30/06/17 NL Belg
Slide 13: Commission income growth continues
Commission income growth continues Commission income strong across segments Underlying income Financial Markets excl. CVA/DVA (in EUR mln) (in EUR mln) 682 714 379 610 605 611 323 321 280 297 279 252 273 244 235 303 138 154 114 173 232 257 110 132 152 228 230 223 265 265 138 106 76 89 66 2Q16 3Q16 4
Slide 14: Operating expenses up modestly; regulatory costs stable YoY
Operating expenses up modestly; regulatory costs stable YoY Underlying operating expenses (in EUR mln) Regulatory costs experience seasonality (in EUR mln) 496 474 209 2,157 2,155 2,159 2,137 2,242 75 69 65 2Q16 3Q16 4Q16 1Q17 2Q17 1Q 2Q 3Q 4Q Expenses Regulatory costs 2016 2017 • Expense increase s
Slide 15: Risk costs up due to fewer releases; NPLs remain favourably low
Risk costs up due to fewer releases; NPLs remain favourably low Risk costs (in EUR mln) NPL ratio 307 2.5% 265 2.4% 2.4% 2.4% 123 229 2.3% 2.3% 97 2.2% 2.1% 2.1% 138 133 135 2.2% 2.0% 77 74 31 2.1% 35 2.0% 57 42 45 1.9% 1.9% 51 68 36 36 50 43 29 13 17 12 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17
Slide 16: Group CET1 ratio stable at 14.5%; interim dividend of EUR 0.24
Group CET1 ratio stable at 14.5%; interim dividend of EUR 0.24 ING Group 2Q17 fully loaded CET1 ratio* Interim profit of EUR 0.24 per share (in EUR mln) 14.5% 0.2% -0.3% 0.1% 14.5% 2,563 2,514 808 1,632 EUR 0.42 1,706 931 EUR 0.24 EUR 0.24 1Q17 Net profit* RWA/Other FX impact** 2Q17 Total 2016 divid
Slide 17: Ambition 2020 – ING Group Financial Targets
Ambition 2020 – ING Group Financial Targets Actual 2016 Actual 1H17 Ambition 2020* • CET1 ratio (%) 14.2% 14.5% > Prevailing fully loaded requirements** Capital • Leverage ratio (%) 4.8% 4.6% > 4% • Underlying C/I ratio (%)*** 54.2% 53.6% 50-52% Profitability • Underlying ROE (%)*** 10.1% 10.8% Awai
Slide 18: Wrap up
Wrap up 18
Slide 19: Wrap up
Wrap up • ING recorded 2Q17 net profit of EUR 1,371 mln, up 5.9% from the same period last year • Strong results reflect continued loan growth at resilient margins and relatively low risk costs • Our geographic footprint and product diversity enable us to continue to capture profitable growth • Thin
Slide 20: Appendix
Appendix 20
Slide 21: Strong 2Q17 result; regulatory costs offset by volatile items
Strong 2Q17 result; regulatory costs offset by volatile items 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) 2,009 1,992 2Q16 3Q16 4Q16 1Q17 2Q17 2,125 2,036 1,988 200 97 CVA/DVA -54 -72 14
Slide 22: Robust interim results for both Retail and Wholesale Banking
Robust interim results for both Retail and Wholesale Banking Underlying pre-tax result Retail Banking (in EUR mln) Underlying pre-tax result Wholesale Banking (in EUR mln) 72 67 110 61 384 91 2 99 7 1,275 1,288 1,249 1,327 758 748 813 778 972 638 -2 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17
Slide 23: 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 2Q17 Changes to Group ROE calculation in 2Q17 (amounts in EUR bln and %) (in EUR mln) Capital RWA Ratio Change As of 30 June 2017 Actuals March 2017 45.0 309.8 14.5% IFRS-EU shareholders’ equity 49,685
Slide 24: Further client savings rate adjustments in our home markets
Further client savings rate adjustments in our home markets Few more savings rate adjustments in the quarter… …and we have several other levers to stabilise NIM • In 2Q17, we reduced Dutch savings rates by 5 bps after • Continue growth in higher margin lending without earlier adjustments in 1Q17 cha
Slide 25: Lending credit outstandings are well-diversified
Lending credit outstandings are well-diversified ING Group* Retail Banking* Wholesale Banking* 6% 5% 1% 14% 30% 16% 36% EUR EUR EUR 44% 4% 633 408 226 bln 64% bln bln 17% 21% 8% 12% 9% 13% Retail Banking Mortgages Netherlands Structured Finance Wholesale Banking Other lending Netherlands Real Estate
Slide 26: Wholesale Banking lending credit outstandings well-diversified by geography and sector
Wholesale Banking lending credit outstandings well-diversified by geography and sector Loan portfolio is well diversified across geographies… …and sectors Lending Credit O/S Wholesale Banking (2Q17)* Lending Credit O/S Wholesale Banking (2Q17)* 1% NL 3%4% Builders & Contractors 13% 5% 7% 18% Belux 1
Slide 27: 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 2Q17 2Q17 O/S 1Q17 1Q17 O/S 2Q16 2Q16 Wholesale Banking 225,566 2.4% 234,175 2.3% 214,059 2.5% Industry Lending 127,907 2.6% 131,979 2.4%
Slide 28: Important legal information
Important legal information Projects may be subject to regulatory approvals. 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 descri