Ing Groep N.v. · EURONEXT:INGA
Ing Groep — Investor Day (October 2016)
19 slides from Ing Groep's investor day presentation, Oct 3, 2016
Slide 1: Delivering on financial targets
Delivering on financial targets ING Group Investor Day 2016 Patrick Flynn, CFO ING Group Amsterdam • 3 October 2016
Slide 2: Key points
Key points • We will continue to deliver earnings growth despite the low interest rate environment • NII to grow on the back of continued lending growth at resilient margins • We now announce c. EUR 800 mln to be invested in our digital transformation • Improved customer experience as we deliver new
Slide 3: ING is on track to deliver on our Ambition 2017
ING is on track to deliver on our Ambition 2017 ING Bank - Realisation of Ambition 2017 targets announced at Investor Day 2014 Actual 2013 Actual 2015 Actual 1H16 Ambition 2017 • CET1 ratio (%) 10.0% 11.6% 12.2% >10% Capital • Leverage ratio (%)* 3.9% 4.5% 4.5% ~4% • Underlying C/I ratio (%) 56.8% 5
Slide 4: We have delivered strong financial results
We have delivered strong financial results Customer Core lending Underlying income excl. CVA/DVA Risk costs deposit growth growth (in EUR bln) (in EUR bln and bps of RWA) (in EUR bln)* (in EUR bln)* 14.5 12.4 CAGR +3.0% 27.3 +4.3% 15.0 15.2 15.6 16.3 74 83 66.9 21.9 56.0 8.3 8.7 55 52 44 2.1 2.3 36
Slide 5: NII growth driven by robust lending
NII growth driven by robust lending Robust customer lending since 2014 (in EUR bln)… …has supported growth in NII (excl. FM, in EUR mln)… 551 3,191 537 539 538 3,124 533 3,074 3,049 529 3,011 3,040 3,007 515 514 2,932 508 501 14.8 2,861 2,840 8.7 7.1 5.6 6.9 6.1 1.6 4.5 -0.2 0.9 1Q14 2Q14 3Q14 4Q14
Slide 6: Lower savings rates and balance sheet optimisation support NIM
Lower savings rates and balance sheet optimisation support NIM 2Q16 retail customer deposits, breakdown by segment* Client savings rates decline on falling market rates (in bps) 24% NL (Oranje Spaarrekening)** BE (Oranje boekje) 31% EUR Floor for 452 Netherlands 90 regulated Belgium savings is bln 5
Slide 7: NIM stable despite low interest rate environment
NIM stable despite low interest rate environment NIM stable through 2017 (in %) • Benefit of deposit repricing 1.51% 1.46% 1.50% expected to end some time in 2018, but benefits of balance sheet optimisation will continue • Asset repricing may provide support for NIM in future years • Management focu
Slide 8: Higher margin lending to drive NII
Higher margin lending to drive NII Volume growth end 2013 vs. 1H16 Concentration in mortgages steadily declining Growth EUR bln CAGR (%) outlook EUR EUR +11.6% 551 bln 9% 494 bln Industry 34.3 16.9% ++ 10% 21% Leverage 10% 19% Lending 15% 22% Wholesale 19% 20% Banking General 5.8 8.1% + expertise Le
Slide 9: Fee income initiatives to contribute to revenue expansion
Fee income initiatives to contribute to revenue expansion ING aspires to grow non-interest income faster than NII… Lending (in EUR mln) • Renewed focus on fees in Wholesale Banking Fee growth > (arranger roles, TCF, PCM, OTD, etc.)* NII growth 2,320 30% 2,173 2,244 2,290 Investments 1,217 40% • Resh
Slide 10: Digital transformation programmes deliver cost savings…
Digital transformation programmes deliver cost savings… Orange Bridge - Integrated banking platform in Benelux* Wholesale Banking Target Operating Model (TOM) (in EUR mln) extension (in EUR mln) 550 60 60 50 10 20 110 120 90 70 60 830 70 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 Re
Slide 11: …which will bring us to our C/I ratio target
…which will bring us to our C/I ratio target • We intend to invest c. EUR 800 mln in digital capabilities Estimated impact of digital transformation programmes* • Build scalable platform to facilitate customer growth (in EUR mln) • Enhanced customer experience as we bring new products to market more
Slide 12: Risk costs trending down
Risk costs trending down Risk costs ING Bank (in EUR bln and bps of RWA) 83 76 74 40-45 bps of RWA 50 55 48 44 through-the-cycle 36 36 3 3 3 Loan losses (in EUR bln) 0.1 0.1 0.1 1.1 2.3 1.4 1.3 2.1 2.3 1.6 1.3 bps (of RWA) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H16 2017 2020 NPL rat
Slide 13: Robust capital position; double-digit ROE
Robust capital position; double-digit ROE Group capital position vs. Bank Underlying Bank ROE up in spite of higher fully loaded CET1 (fully-loaded CET1 ratio, in %) capital of ING Bank (in %) Dividend reserve 13.1% 10.8% 10.8% 12.2% 10-13% 11.6% 9.9% 11.4% 9.0% 10.0% 7.0% 10% 2013 2014 2015 1H16 1H
Slide 14: Group fully-loaded CET1 to remain above regulatory requirements
Group fully-loaded CET1 to remain above regulatory requirements ING Group fully-loaded CET1 ratio at 13.1% as per end June 2016 Phased-in: 13.2% >12.5% 12.7% 0.1% 10.5% 10.25% Buffer to MDA 0.75% 13.1% 2Q16*: EUR 9.4 bln 9.5% 2.95% 4Q14 4Q15 2Q16 Required phased-in 2016 Required fully-loaded 2019 SR
Slide 15: Ambition 2020 - Financial Targets
Ambition 2020 - Financial Targets Ambition 2017 - Bank Ambition 2020 – Group* • CET1 ratio (%) > 10% > Prevailing fully-loaded requirements** Capital • Leverage ratio (%) ~ 4% > 4% • Underlying C/I ratio (%) 50-53% 50-52% Profitability • Underlying ROE (%) 10-13% Awaiting regulatory clarity (IFRS-EU
Slide 16: Appendix
Appendix 16
Slide 17: SREP and MDA framework to change
SREP and MDA framework to change SREP Decision 2015 (CET1 phased-in) SREP and MDA framework under development • SREP decision of 2016 will be composed of a Pillar 2 10.25% - 2016 MDA restriction Requirement (P2R) and a Pillar 2 Guidance (P2G) trigger point 0.75% 9.50% - SREP 2015 • 2016 EBA Stress T
Slide 18: Flexibility to comply with expected TLAC and MREL requirements
Flexibility to comply with expected TLAC and MREL requirements Possible TLAC/MREL requirements (fully loaded, in % of RWA) The Financial Stability Board’s TLAC proposals ~ 36% • The final TLAC proposal was published in November 2015 • Assuming TLAC requirements at 23.5% Senior funding: (including bu
Slide 19: 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