Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Q4 2013 Earnings Presentation
34 slides from Ing Groep's earnings presentation, Feb 12, 2014
Slide 1: Fourth Quarter 2013 Results
Fourth Quarter 2013 Results ING posts 4Q13 underlying net profit of EUR 405 mln Ralph Hamers CEO Amsterdam – 12 February 2014 www.ing.com
Slide 2: Key points
Key points • ING advanced further into end phase of restructuring • State support further reduced and IABF unwound • Further progress on divestment Insurance and Investment Management • ING Insurance on track in preparations for intended IPO in 2014 • Group posted an underlying net profit of EUR 405
Slide 3: ING advanced further into end phase of restructuring
ING advanced further into end phase of restructuring ING made further progress on divestment Insurance/IIM ING Insurance on track in preparations for intended IPO • Divestment ING Insurance/IIM Asia resolved • Implementation of new reporting segmentation that better aligns the businesses of ING Insu
Slide 4: Capital position strengthened in advance of intended ING Insurance IPO
Capital position strengthened in advance of intended ING Insurance IPO ING Insurance gross debt and cash capital (in EUR bln) Solvency I ratio NN Life, based on DNB Swap curve (in %) 234% 4.9 23% 221% 3.9 3.9 15% 183% 1.4 0.5 0.6 0.8 3Q13 4Q13 4Q13 Pro-forma* 3Q13 Capital Capital 4Q13 4Q13 Pro- gene
Slide 5: ING Insurance will be appropriately capitalised at the intended IPO
ING Insurance will be appropriately capitalised at the intended IPO The capital position of ING Insurance is assessed on solvency, leverage and holding company buffer • Currently all operating entities are adequately capitalized • Holding company 4Q13 pro-forma cash capital position was EUR 0.8 bln
Slide 6: Double leverage covered by (market) value ING US, SulAmerica and ING Insurance
Double leverage covered by (market) value ING US, SulAmerica and ING Insurance Group double leverage comfortably covered by (market) value ING U.S., SulAmerica and ING Insurance (in EUR bln) 4.8 -0.8 1.0 5.0 -3.7 -0.1 -0.3 3Q13 Sale of 15% Stake in Debt/Equity 4Q13 57% MV ING Stake in Balance stake
Slide 7: ING reached agreement to make Defined Benefit Pension Fund financially independent
ING reached agreement to make Defined Benefit Pension Fund financially independent Pension agreement will have strong benefits for ING* Financial impact in 1Q14* • ING Group will be released from all financial P/L impact (after tax) (in EUR bln) obligations under the closed Dutch Defined Benefit pen
Slide 8: 2013 results
2013 results Fourth Quarter 2013 Results 8
Slide 9: ING Group posts underlying net profit of EUR 3,255 mln in FY 2013
ING Group posts underlying net profit of EUR 3,255 mln in FY 2013 Underlying net result ING Group (in EUR mln) Net result ING Group (in EUR mln) 1,804 1,482 1,078 978 794 788 539 405 163 101 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q13 Divestments, discontinued operations and special items (in
Slide 10: ING Bank posted another solid quarter
ING Bank posted another solid quarter Bank results (in EUR mln) Addition to Underlying result Gross result + loan loss provisions = before tax 1,730 1,762 1,655 1,464 1,169 1,147 1,103 904 871 283 -589 -561 -616 -552 -560 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q13 • I
Slide 11: Net interest margin increased further to 145 bps
Net interest margin increased further to 145 bps Underlying interest margin by quarter (in bps) Financial Markets contribution to NIM can be volatile 3,006 2,936 2,946 Financial markets impact on NIM Q-on-Q (in bps) 2,867 2,916 2 134 138 142 144 145 0 -1 -2 -3 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13
Slide 12: Net lending increased in both Retail and Commercial Banking
Net lending increased in both Retail and Commercial Banking Lending Assets ING Bank (EUR bln)* Retail Banking: EUR +1.6 bln Commercial Banking: EUR +0.4 bln 1.5 1.5 -1.2 0.8 -0.7 -3.6 493.8 -1.8 1.1 0.8 -2.8 489.4 30/09/13 Retail NL Retail Retail Retail CB CB CB CB Transfers/ FX 31/12/13 Belgium Ger
Slide 13: Operating expenses remain flat
Operating expenses remain flat Underlying operating expenses (in EUR mln) Expenses flat over the years (in EUR mln) 0.5% 175 149 8,745 8,638 8,694 ~8,700 2,165 2,133 2,090 2,120 2,202 2011 2012 2013 2015 4Q12 1Q13 2Q13 3Q13 4Q13 Ambition Expenses Dutch bank tax • Underlying expenses rose 0.5% from 4
Slide 14: Restructuring programmes on track to reach cost savings of EUR 880 mln by 2015
Restructuring programmes on track to reach cost savings of EUR 880 mln by 2015 Restructuring programmes (in EUR mln) Remaining Total cost Total FTE Cost savings cost savings savings reduction Announced achieved by 2015 by 2015 by 2015 Retail Banking NL 3Q11/4Q12 279 151 430 4,100 Retail Banking NL 4
Slide 15: Risk costs down versus 4Q12, slightly up from 3Q13
Risk costs down versus 4Q12, slightly up from 3Q13 Underlying additions to loan loss provisions Underlying additions to loan loss provisions (in EUR mln and bps of avg RWA) (in EUR mln) 616 552 560 589 5 15 561 552 560 13 35 28 47 89 83 85 71 81 80 81 30 94 79 82 70 32 126 138 82 82 4Q12 1Q13 2Q13 3
Slide 16: NPL ratio increased slightly to 2.8%
NPL ratio increased slightly to 2.8% Non-performing loans (in EUR and %) NPL ratio (in %) 4Q13 3Q13 2.8 2.7 2.8 2.6 Retail Banking 2.5 - Dutch Mortgages 1.9 1.8 - Business Lending NL 7.5 7.0 - Retail Belgium 3.2 3.2 - Retail International 1.5 1.6 15.2 16.2 15.7 15.9 Commercial Banking 14.9 - Structu
Slide 17: Provisions continue to exceed write-offs
Provisions continue to exceed write-offs Net provisions have structurally outweighed write-offs Coverage ratio has improved (in EUR bln) (in EUR bln) 3.0 4Q12 3Q13 4Q13 2.3 Stock of 2.1 5.5 5.9 6.2 1.8 provisions 1.7 1.7 1.6 1.3 1.2 1.2 1.3 0.7 Non-performing 14.9 15.7 15.9 loans 2008 2009 2010 2011
Slide 18: Risk costs Retail Banking Netherlands remain elevated
Risk costs Retail Banking Netherlands remain elevated Risk costs Dutch mortgages and Business Lending NL Non-performing loans Dutch mortgages and Business (in EUR mln) Lending NL (in EUR bln) 82 82 2.6 33 82 81 2.4 2.5 2.1 2.3 148 126 138 121 112 2.0 2.2 2.3 1.9 1.9 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q1
Slide 19: Risk costs Real Estate Finance further down
Risk costs Real Estate Finance further down Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (31 Dec 2013)* (in EUR bln) 111 112 11% Netherlands 103 5% Spain 83 71 5% Italy 5% EUR France 25 bln 59% UK 6% Americas 9% Other 4Q12 1Q13 2Q13 3Q13 4Q13 Non-performing loans Ris
Slide 20: Capital position remains strong despite higher RWAs
Capital position remains strong despite higher RWAs ING Bank core Tier 1 ratio (in %) -0.4% -0.5% 0.2% -0.9% 10.8% 11.9% 12.4% 11.7% 9.6% 10.0% fully loaded 4Q11 4Q12 3Q13 Dividend to RWA Net profit 4Q13 Impact Pro-forma Group CRD IV at CRD IV implementation • ING Bank’s core Tier 1 ratio remains st
Slide 21: ING Bank is already meeting CRD IV requirements
ING Bank is already meeting CRD IV requirements Priorities for 2012-2013 set at the IR Day in January 2012 Strong retail deposit gathering ability and low Loan-to-Deposit ratio (in EUR bln) Accelerate transition to Basel III 389 Limit balance sheet growth 348 Execute balance sheet optimisation
Slide 22: ING Insurance
ING Insurance Fourth Quarter 2013 Results 22
Slide 23: ING Insurance results ongoing business up from 4Q12
ING Insurance results ongoing business up from 4Q12 Operating result ongoing business Result before tax Sales (in EUR mln) (in EUR mln) (APE, in EUR mln) 164 1,224 90 90 269 448 109 130 231 215 131 190 171 -28 140 -428 159 -685 131 108 102 61 39 27 34 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q1
Slide 24: Netherlands Life results up on higher investment income and lower expenses
Netherlands Life results up on higher investment income and lower expenses Netherlands Life - Operating result Netherlands Non-Life Operating result Insurance Europe - Operating result (in EUR mln) (in EUR mln) (in EUR mln) 199 186 169 151 132 42 42 69 28 53 57 48 12 42 -3 4Q12 1Q13 2Q13 3Q13 4Q13 4
Slide 25: Administrative expenses were down from 4Q12
Administrative expenses were down from 4Q12 Administrative expenses ongoing business (in EUR mln) • Administrative expenses for the ongoing businesses were EUR 462 million in 4Q13, down 0.6% from a year ago, -0.6% despite higher pension costs and higher expenses as a result of the partial transfer o
Slide 26: ING Insurance will continue to focus on improving capital generation and earnings
ING Insurance will continue to focus on improving capital generation and earnings • Leading position in Dutch life insurance* • Continued focus on cost reductions • #3 in Dutch non-life insurance* • Gradual shift to higher return assets Netherlands Life Netherlands Non-Life • Underwriting and re-pri
Slide 27: Wrap up
Wrap up Fourth Quarter 2013 Results 27
Slide 28: Wrap up
Wrap up • ING advanced further into end phase of restructuring • State support further reduced and IABF unwound • Further progress on divestment Insurance and Investment Management • ING Insurance on track in preparations for intended IPO in 2014 • Group posted an underlying net profit of EUR 405 ml
Slide 29: Appendix
Appendix Fourth Quarter 2013 Results 29
Slide 30: Pro-forma ING Group capital structure at 31 December 2013
Pro-forma ING Group capital structure at 31 December 2013 Pro-forma - ING Group 31 December 2013 ING Bank 32 Equity 44 ING Insurance 14 Minority Interest U.S. 4 ING U.S. 10 CT1 securities 2 HybridsB 5 Core Debt 5 HybridsI 2 Hybrids 7 64 64 ING Bank ING Insurance (ING V) consolidated Insurance ING U.
Slide 31: Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.0%
Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.0% Impact CRD IV 4Q2013 (pro-forma) (EUR bln) CRD IV core Tier 1 ratio Core Tier CT1 • CRD IV started on 1 January 2014, 1 capital RWAs ratio including the first tranche of the phased-in impact. 31 Dec 2013 33.1 282.5 11.7% • Pro-forma impact at imp
Slide 32: Short-term funding reduced while growing long-term funding and deposits
Short-term funding reduced while growing long-term funding and deposits • ING continued to grow its deposit base, Strong primarily driven by Retail Banking units customer 419 436 457 475 • ING will continuously focus on increasing 389 deposit market share in corporate and mid-corporate growth* depos
Slide 33: Early signs of stabilisation Dutch economy and housing market
Early signs of stabilisation Dutch economy and housing market Dutch Purchasings Managers Index (PMI) rose to 57.0 in Dutch unemployment rate (%) has remained stable at December. Above 50 indicates positive growth around 7% in the past 6 months 70 15.0 12.0% 60 57.0 12.5 50 10.0 7.0% 40 7.5 30 5.0 20
Slide 34: 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 3Q2013 ING Group Interim Acco