UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For 11 February 4, 2016
Commission File Number 1-14642
ING Groep N.V.
Bijlmerplein 888
1102 MG Amsterdam
The Netherlands
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F x Form
40-F ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T rule 101(b)(7): ¨
Indicate by check mark whether the registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No
x
If “Yes” is marked, indicate
below the file number assigned to the registrant in connection with Rule 12g3-2(b).
This Report contains a copy of the following:
The Press Release issued on 4 February, 2016
Amsterdam,
4 February 2016
ING 2015 underlying net profit EUR 4,219 million;
FY 2015 dividend at EUR 0.65 per ordinary share
Think
Forward strategy drives strong new customer acquisitions and commercial growth in 2015
| • | ING
attracted over 1.4 million new retail customers; primary relationships increased by almost
7% to 8.9 million |
| • | Core
lending recorded net growth of EUR 21.7 billion; robust net customer deposit inflow of
EUR 25.1 billion |
ING
Bank full-year 2015 underlying net profit of EUR 4,219 million, up 23.2% from full-year 2014
| • | Strong
2015 performance reflects higher interest results and lower risk costs, despite higher
regulatory costs |
| • | 4Q15
underlying result before tax was EUR 1,202 million with positive momentum across both
Retail and Wholesale Banking |
ING
Group fully-loaded CET1 ratio strengthened to 12.7%; proposal to pay full-year dividend of EUR 2,515 million
| • | ING
Group full-year 2015 net result EUR 4,010 million; 4Q15 net result was EUR 819 million |
| • | ING
Group’s SREP requirement set at 9.5%; Dutch buffers currently set at 3% and phase
in over four years |
| • | ING
proposes to pay final cash dividend of EUR 0.41 per ordinary share, following interim
dividend of EUR 0.24 in August 2015 |
CEO statement
“We
work hard every day to improve the customer experience and are grateful for the confidence our clients place in us,” said
Ralph Hamers, CEO of ING Group. “In 2015, our retail customer base grew by over 1.4 million new customers to 34.4 million
at year-end; of this total, the number of customers selecting ING as their primary bank rose by almost 7% to 8.9 million. Net
growth in our core lending book was EUR 21.7 billion, or 4.2%, as we continued to support our clients’ financing needs throughout
the business cycle. Net customer deposits grew by EUR 25.1 billion, or 5.1%.”
“During
2015, we also made significant progress on increasing the pace of innovation across the company. In the fourth quarter, Poland
introduced Moje ING, a platform which gives customers a comprehensive overview of their finances with the help of an easy-to-use
financial planning tool, and is based on a similar system in Spain. Twyp, our app for peer-to-peer payments using telephone numbers,
was launched in Spain in December. In the new year we also launched Twyp in the Netherlands and announced an investment in the
fintech WeLab, which provides consumer loans in China and Hong Kong in a fully automated process that takes just minutes.”
“I’m
proud that ING also made important strides in our sustainability efforts. We published our ambitions to reduce our carbon dioxide
footprint, water usage and waste by 20% and have committed to procuring 100% renewable electricity for all our buildings, both
by 2020. As part of our eforts to helping our clients’ transition to more sustainable operations, we ended the financing
of new coal exploration and are reducing existing coal financing.”
“ING
Bank recorded an underlying net profit of EUR 4,219 million in 2015, which is 23.2% higher than in 2014. This improvement was
primarily driven by higher interest results on the back of strong lending growth and lower risk costs, and despite a substantial
increase in regulatory costs. ING Bank’s full-year underlying return on equity rose to 10.8% from 9.9% in 2014. ING Bank’s
fourth-quarter 2015 underlying result before tax was EUR 1,202 million, reflecting continued positive momentum in both Retail
and Wholesale Banking. Income grew, supported by volume growth and increased fees, and ING Germany delivered another record quarterly
result.”
“In
2015, we completed the divestment of Voya and significantly reduced our stake in NN Group, bringing us closer to completing our
restructuring and consolidating our position as one of Europe’s leading banks. Including the net result of the legacy Insurance
businesses, ING Group posted a net result of EUR 4,010 million for the full-year 2015. The fourth-quarter 2015 net result of ING
Group was EUR 819 million.”
“Our
capital position continued to strengthen and the fully-loaded CET1 ratios of ING Group and ING Bank were 12.7% and 11.6%, respectively,
at year-end. We are pleased to propose a full-year 2015 dividend of EUR 0.65 per share, comprising the previously announced interim
dividend of EUR 0.24 and a final dividend of EUR 0.41 per share. We are committed to maintaining a healthy Group CET1 ratio in
excess of prevailing fully-loaded requirements, currently 12.5%, and to returning capital to our shareholders. We aim to pay a
progressive dividend over time.”
“ING’s
strategy is on track and I am proud of our achievements in 2015. I am confident that our franchise will continue to create sustainable
long-term growth in 2016, while empowering our customers and delivering value to our shareholders.”
Investor enquiries |
|
Investor conference call |
|
Press conference |
T: +31 20 576 6396 |
|
4 February 2016 at 9:00 CET |
|
4 February 2016 at 11:00 CET |
E: investor.relations@ing.com |
|
+31 20 794 8500 (NL) |
|
Bijlmerplein 888, Amsterdam |
|
|
+44 20 7190 1537 (UK) |
|
Or via Q&A at +31 20 531 5871 (NL) |
Press enquiries |
|
+1 480 629 9031 (US) |
|
or +44 203 365 3210 (UK) |
T: +31 20 576 5000 |
|
Live audio webcast at www.ing.com |
|
Live audio webcast at www.ing.com |
E: media.relations@ing.com |
|
|
|
|
Share Information
Table of contents |
|
|
Share
information
|
Share Information |
2 |
|
|
4Q2014 |
1Q2015 |
2Q2015 |
3Q2015 |
4Q2015 |
Economic Environment |
3 |
|
Shares (in millions, end of period) |
|
|
|
|
Consolidated Results |
4 |
|
Total number of shares |
3,858.9 |
3,862.9 |
3,869.8 |
3,870.1 |
3,870.2 |
Segment Reporting |
9 |
|
- Treasury shares |
4.3 |
2.8 |
2.0 |
1.5 |
1.5 |
Corporate Line |
16 |
|
- Shares outstanding |
3,854.6 |
3,860.1 |
3,867.8 |
3,868.6 |
3,868.7 |
Geographical Split Banking |
17 |
|
Average number of shares |
3,856.2 |
3,856.9 |
3,863.3 |
3,868.0 |
3,868.9 |
Consolidated Balance Sheet |
21 |
|
Share price (in euros) |
|
|
|
|
|
Risk & Capital Management |
23 |
|
End of period |
10.83 |
13.65 |
14.81 |
12.65 |
12.45 |
Business & Sustainability Highlights |
27 |
|
High |
11.78 |
13.96 |
15.49 |
15.90 |
13.74 |
Appendix |
28 |
|
Low |
10.07 |
10.35 |
13.45 |
12.38 |
11.92 |
|
|
|
Net result per share (in euros) |
0.30 |
0.46 |
0.09 |
0.28 |
0.21 |
Financial calendar
|
|
|
Shareholders' equity per share |
13.32 |
14.16 |
12.09 |
11.90 |
12.36 |
Publication 2015 ING Group Annual Report: |
Wednesday, 2 March 2016 |
|
(end of period in euros) |
|
|
|
|
|
2016 Annual General Meeting: |
Monday, 25 April 2016 |
|
Dividend per share (in euros) |
0.12 |
n.a |
0.24 |
n.a |
0.41 |
Record
date for final dividend 2015 entitlement (Euronext Amsterdam)*:
|
Thursday, 28 April 2016 |
|
Price/earnings ratio1) |
33.8 |
10.7 |
13.6 |
11.2 |
12.0 |
Record
date for final dividend 2015 entitlement (NYSE)*:
|
Thursday, 28 April 2016 |
|
Price/book ratio |
0.81 |
0.96 |
1.22 |
1.06 |
1.01 |
Payment
date final dividend 2015 (Euronext Amsterdam)*:
|
Wednesday, 4 May 2016 |
|
1) Four-quarter rolling average. |
|
|
|
|
Publication
results 1Q2016:
|
Tuesday, 10 May 2016 |
|
|
Payment
date final dividend 2015 (NYSE)*:
|
Wednesday, 11 May 2016 |
|
|
Publication
results 2Q2016:
|
Wednesday, 3 August 2016 |
|
|
Record
date for interim dividend 2016 entitlement (Euronext Amsterdam)*:
|
Monday, 8 August 2016 |
|
|
Payment
date interim dividend 2016 (Euronext Amsterdam)*:
|
Monday, 15 August 2016 |
|
|
Record
date for interim dividend 2016 entitlement (NYSE)*:
|
Monday, 15 August 2016 |
|
|
Payment date interim dividend 2016 (NYSE)*: |
Monday, 22 August 2016 |
|
|
Publication results 3Q2016: |
Thursday, 3 November 2016 |
|
|
* only if any dividend is paid |
All dates are provisional |
|
|
Listing information
|
|
|
American Depositary Receipts (ADRs) |
ING ordinary shares are registered shares with a par value of EUR 0.24 per share.
The (depositary receipts for) ordinary shares of ING Group are listed on the exchanges of Amsterdam,
Brussels and New York (NYSE). |
|
For
questions related to the ING ADR program, please visit J.P. Morgan Depositary Receipts Services at www.adr.com, or contact: |
|
|
|
|
J.P. Morgan Shareholder Services: |
J.P. Morgan Transfer Agent Service Center |
Stock
exchanges
|
Tickers
(Bloomberg, Reuters)
|
Security
codes
(ISIN, SEDOL1)
|
|
JPMorgan Chase Bank, N.A.
4 New York Plaza, Floor 12 |
ADR shareholders can contact:
JPMorgan Chase Bank N.A. |
Euronext
Amsterdam and Brussels
|
INGA NA, ING.AS |
NL0000303600, 7154182
|
|
New York, NY 1004 |
P.O. Box 64504 |
New York Stock Exchange |
ING US, ING.N |
US4568371037, 2452643 |
|
Attention: Depositary Receipts Group |
St. Paul, MN 55164-0854 |
|
|
|
|
Fax: +1 212 552-1950 |
In the US: +1 800 990 1135 |
|
|
|
|
In the U.S.: (866) JPM-ADRS |
Outside the US: +1 651 453 2128 |
|
|
|
|
Outside the US: +1 866 576-2377 |
Email: jpmorgan.adr@wellsfargo.com |
Relative
share price performance
1
January 2015 to 1 January 2016
2 | | ING Press Release 4Q2015 |
Economic Environment
Economic
activity
• The composite purchasing managers’ index for the eurozone improved slightly in the fourth quarter. Weak external demand from emerging markets appears to be counterbalanced by stronger domestic demand.
• In the US, the composite PMI was dragged down by the manufacturing sector. This sector suffers from the strong dollar and weak demand from emerging markets.
• The PMIs are regarded as timely indicators of underlying trends in economic activity.
Interest
rates
The
first rate hike by the Federal Reserve in December caused the short end of the US yield curve to move up. In the eurozone,
by contrast, the anticipated lowering of the deposit rate by the ECB caused the short end of the yield curve to move down.
Inflation expectations remain weak as commodity prices decline due to emerging markets weakness and (in the case of oil)
supply policy.
Stock
markets
The
fourth quarter was characterised by anticipation of the first Federal Reserve rate hike in the US and further easing by
the ECB in the eurozone, compounded by general uncertainty about the state of the world economy. As a result, stock markets
were volatile over the course of the quarter.
|
|
Currency
markets
On balance, the euro weakened in the fourth quarter.
This is the effect of the ECB’s additional monetary policy, hinted at in October and formally announced in December. The
dollar received support from the first Fed rate hike, announced in December 2015.
Credit
markets
Credit-market spreads increased in the fourth quarter, mainly
because of concerns about global economic growth. The slowdown in China, together with concerns about the pace of growth in the
United States, have caused the slight run-up in spreads
Consumer
confidence
Consumer
confidence improved in the fourth quarter as concerns about a possible Grexit receded, purchasing power
continued to improve due to low oil prices and employment continued to increase in the eurozone. Consumer confidence remains well
above its long-term average.
|
ING Press Release 4Q2015 | Source: ING Economics Department | 3 |
Consolidated
Results
Consolidated result |
|
4Q2015 |
4Q2014 |
Change |
3Q2015 |
Change |
FY2015 |
FY2014 |
Change |
Profit and loss data (in EUR million) |
|
|
|
|
|
|
|
|
Interest result |
3,172 |
3,208 |
-1.1% |
3,140 |
1.0% |
12,590 |
12,376 |
1.7% |
Commission income |
607 |
556 |
9.2% |
524 |
15.8% |
2,320 |
2,290 |
1.3% |
Investment income |
-1 |
25 |
-104.0% |
-7 |
|
129 |
206 |
-37.4% |
Other income |
265 |
-34 |
|
345 |
-23.2% |
1,513 |
424 |
256.8% |
Total underlying income |
4,043 |
3,756 |
7.6% |
4,002 |
1.0% |
16,552 |
15,296 |
8.2% |
Staff expenses |
1,197 |
1,204 |
-0.6% |
1,203 |
-0.5% |
4,922 |
4,844 |
1.6% |
Regulatory costs |
279 |
182 |
53.3% |
105 |
165.7% |
620 |
408 |
52.0% |
Other expenses |
1,062 |
1,186 |
-10.5% |
939 |
13.1% |
3,704 |
3,727 |
-0.6% |
Operating expenses |
2,539 |
2,572 |
-1.3% |
2,247 |
13.0% |
9,246 |
8,979 |
3.0% |
Gross result |
1,504 |
1,183 |
27.1% |
1,756 |
-14.4% |
7,306 |
6,317 |
15.7% |
Addition to loan loss provision1) |
302 |
400 |
-24.5% |
261 |
15.7% |
1,347 |
1,594 |
-15.5% |
Underlying result before tax |
1,202 |
783 |
53.5% |
1,495 |
-19.6% |
5,959 |
4,724 |
26.1% |
Taxation |
367 |
215 |
70.7% |
379 |
-3.2% |
1,668 |
1,221 |
36.6% |
Minority interests |
12 |
20 |
-40.0% |
23 |
-47.8% |
72 |
79 |
-8.9% |
Underlying net result |
822 |
548 |
50.0% |
1,092 |
-24.7% |
4,219 |
3,424 |
23.2% |
Net gains/losses on divestments |
0 |
0 |
|
0 |
|
367 |
202 |
81.7% |
Special items after tax |
-16 |
-18 |
|
-15 |
|
-58 |
-1,021 |
|
Net result from Banking |
807 |
530 |
52.3% |
1,078 |
-25.1% |
4,528 |
2,606 |
73.8% |
Net result Insurance Other |
12 |
14 |
-14.3% |
-90 |
|
-42 |
107 |
-139.3% |
Net result IC elimination between ING Bank and NN Group |
|
-12 |
|
|
|
-20 |
-55 |
|
Net result from discontinued operations NN Group2) |
0 |
226 |
-100.0% |
76 |
-100.0% |
-779 |
65 |
|
Net result from discontinued operations Voya Financial |
|
418 |
-100.0% |
|
|
323 |
-1,471 |
|
Net result ING Group |
819 |
1,176 |
-30.4% |
1,064 |
-23.0% |
4,010 |
1,251 |
220.5% |
Net result per share (in EUR)3) |
0.21 |
0.30 |
|
0.28 |
|
1.04 |
0.32 |
|
Capital ratios (end of period) |
|
|
|
|
|
|
|
|
ING Group shareholders' equity (in EUR billion)2) |
|
|
|
46 |
3.9% |
48 |
51 |
-6.8% |
ING Group common equity Tier 1 ratio fully-loaded |
|
|
|
12.3% |
|
12.7% |
10.5% |
|
ING Bank shareholders' equity (in EUR billion) |
|
|
|
39 |
4.7% |
41 |
38 |
7.3% |
ING Bank common equity Tier 1 ratio fully-loaded |
|
|
|
11.3% |
|
11.6% |
11.4% |
|
ING Bank common equity Tier 1 phased in |
|
|
|
11.4% |
|
11.6% |
11.2% |
|
Customer lending/deposits (end of period, in EUR billion) |
|
|
|
|
|
|
|
|
Residential mortgages |
|
|
|
276.7 |
0.8% |
279.0 |
280.6 |
-0.6% |
Other customer lending |
|
|
|
252.3 |
0.6% |
253.7 |
232.9 |
8.9% |
Customer deposits |
|
|
|
509.4 |
-0.1% |
508.7 |
489.3 |
4.0% |
Profitability and efficiency |
|
|
|
|
|
|
|
|
Underlying interest margin Banking |
1.47% |
1.53% |
|
1.46% |
|
1.46% |
1.51% |
|
Underlying cost/income ratio Banking |
62.8% |
68.5% |
|
56.1% |
|
55.9% |
58.7% |
|
Underlying return on equity based on IFRS-EU equity ING Bank4) |
8.2% |
5.9% |
|
11.2% |
|
10.8% |
9.9% |
|
Employees ING Bank (FTEs, end of period) |
|
|
|
52,560 |
-0.4% |
52,368 |
52,898 |
-1.0% |
Risk |
|
|
|
|
|
|
|
|
Non-performing loans/total loans (end of period) |
|
|
|
2.6% |
|
2.5% |
3.0% |
|
Stock of provisions/provisioned loans (end of period) |
|
|
|
37.6% |
|
38.5% |
35.5% |
|
Underlying risk costs in bps of average RWA |
38 |
54 |
|
34 |
|
44 |
55 |
|
Risk-weighted assets ING Bank (end of period, in EUR billion) |
|
|
|
310.3 |
2.5% |
318.2 |
296.3 |
7.4% |
1) |
The amount presented in ‘addition
to loan loss provision’ (which is equivalent to risk costs) includes write-offs and recoveries on loans and receivables
not included in the stock of provision for loan losses. |
2) |
As announced on 11 January 2016, ING implemented
an accounting change related to the pre-IPO anchor investments in NN Group made in 2014. This accounting change is reflected
in ING Group’s 2015 full-year reporting and comparative figures. As a consequence, the previously reported second-quarter
2015 net result from discontinued operations NN Group was adjusted by EUR -1,001 million from EUR 1,359 million to EUR 358
million. The previously reported FY 2014 shareholders’ equity increased by EUR 0.9 billion from EUR 50.4 billion to
EUR 51.3 billion. |
3) |
The 2014 result per share differs from IFRS
earnings per share in respect of attributions to the core Tier 1 securities. |
4) |
Annualised underlying net result divided by
average IFRS-EU shareholders’ equity of ING Bank N.V. |
Note: Underlying figures are non-GAAP
measures. These are derived from figures according to IFRS-EU by excluding the impact from divestments, special items, Insurance
Other, intercompany eliminations between ING Bank and NN Group, and discontinued operations. |
4 | ING Press Release 4Q2015 |
Consolidated
Results
ING Bank posted a strong set of full-year 2015 results,
driven by higher net interest results and lower risk costs. The underlying net profit was EUR 4,219 million, up 23.2% from 2014.
This was realised despite a sharp increase in regulatory costs during 2015. Commercial performance was robust in 2015: ING Bank
grew net core lending (excluding currency impacts) by EUR 21.7 billion, or 4.2%, and attracted EUR 25.1 billion of net customer
deposits (excluding currency impacts and Bank Treasury). ING Group’s 2015 net result was EUR 4,010 million, including the
net result of the legacy Insurance businesses.
In
the fourth quarter of 2015, ING Bank recorded a strong underlying result before tax of EUR 1,202 million, reflecting
continued positive momentum in both Retail and Wholesale Banking1) and despite significantly higher regulatory costs. Income
grew, supported by volume growth and increased fee income. The net growth in our core customer lending franchises was EUR 4.5
billion. The non-performing loan ratio declined further in the fourth quarter. The quarterly net result from Banking was EUR
807 million. The fourth-quarter 2015 net result of ING Group was EUR 819 million.
Banking
ING Bank’s
fourth-quarter underlying result before tax of EUR 1,202 million was strong, reflecting improved results compared with a year
ago in both Retail and Wholesale Banking. The underlying result before tax rose 53.5% from the fourth quarter of 2014.
Excluding CVA/DVA impacts, regulatory expenses and the redundancy provisions recorded in the fourth quarter of 2014, the
underlying result before tax rose 5.8%, driven by higher income and lower risk costs, in part offset by higher expenses.
Compared with the third quarter of 2015, the pre-tax result declined 19.6%, but was 3.7% lower excluding CVA/DVA impacts and
the significantly higher regulatory costs.
Total
underlying income
Total
underlying income rose 7.6% year-on-year to EUR 4,043 million. This increase was supported by lower
negative CVA/DVA impacts (EUR -22 million in the fourth quarter of 2015 versus EUR -80 million one year ago) and a EUR 23
million one-time impact on consumer loan origination in Germany. Excluding both of these items, income increased 5.4%, mainly
driven by growth in Retail Germany and Industry Lending and an improvement at the Corporate Line. Compared with the third
quarter of 2015, which included EUR 40 million of positive CVA/DVA impacts, total underlying income rose 1.0%.
|
|
Total customer lending at ING Bank increased by EUR 3.7
billion in the fourth quarter to EUR 532.7 billion. Net growth in the core lending businesses, excluding currency impacts, was
EUR 4.5 billion in the fourth quarter of 2015. For the full-year 2015, core lending grew by EUR 21.7 billion, or 4.2%, in line
with our Ambition 2017 growth estimate of 3-4% per annum.
Of
the core lending growth in the fourth quarter, EUR 2.4 billion was in residential mortgages, as a small decline in Retail
Netherlands was more than offset by mortgage growth in most other countries. Other customer lending grew by EUR 2.1 billion,
despite a EUR 1.8 billion net decline in Retail Banking. Other customer lending in Wholesale Banking grew by EUR 3.8 billion,
particularly in Structured Finance and Real Estate Finance. The decline in Retail Banking was due to lower business lending
in the Netherlands and Belgium.
Customer
deposits at ING Bank (excluding Bank Treasury and adjusted for currency impacts) recorded a net growth of EUR 3.4 billion in
the fourth quarter of 2015. Retail Banking recorded a net inflow of EUR 5.0 billion, driven by growth outside of the Benelux.
In Wholesale Banking, net customer deposits declined by EUR 2.7 billion; this was mainly caused by lower corporate deposits
from asset managers and corporate treasuries at year-end.
The
underlying interest result declined 1.1% to EUR 3,172 million from EUR 3,208 million in the fourth quarter of 2014. Excluding
Financial Markets (which recorded lower interest results, but higher other income), the interest result rose by EUR 38
million, or 1.3%. The interest result on customer lending activities increased slightly due to higher volumes in other
(non-mortgage) customer lending, which was partly offset by a small decline in mortgage volumes and a slightly declining
margin for lending overall. The interest result on customer deposits rose marginally, driven by business growth as the
positive volume impact was largely offset by a lower overall interest margin on customer deposits. The improved interest
margin on savings accounts (supported by client rate reductions) could not fully compensate for the lower margins on current
accounts due to the declining reinvestment yields. Compared with the third quarter of 2015, the underlying interest result
rose by EUR 32 million, or 1.0%. Excluding Financial Markets, the interest result declined
by EUR 24 million, or 0.8%.
|
1)
As of 20 January 2016, Commercial Banking is rebranded to Wholesale Banking.
ING Press Release 4Q2015 | 5 |
Consolidated
Results
The fourth-quarter 2015 underlying net interest margin of
ING Bank was 1.47%, up slightly from 1.46% in the third quarter of 2015. This small increase was largely attributable to higher
interest results at Financial Markets. The interest margins on both lending activities and customer deposits were marginally lower
quarter-on-quarter. Compared with the fourth quarter of 2014, the overall interest margin declined by six basis points, of which
four basis points were caused by lower interest results at Financial Markets.
Commission
income increased 9.2% from the fourth quarter of 2014 to EUR 607 million. The increase was mainly visible in Retail Banking
due to higher fee income in the Netherlands and the one-time impact on consumer loan origination in Germany. Within Wholesale
Banking, lower fee income in Industry Lending (due to declines in Natural
Resources Finance and Trade & Commodity Finance) was more than offset by higher commission income in Financial Markets.
Quarter-on-quarter, commission income rose 15.8% due to increases in Wholesale Banking, Retail Germany and Retail
Belgium.
Investment
income dropped to EUR -1 million from EUR 25 million in the fourth quarter of 2014, mainly due to EUR 16 million of
impairments on equities and bonds. Compared with the third quarter of 2015, which included a EUR 71
million impairment on an equity stake and the EUR 41 million annual dividend from Bank of Beijing, investment income improved by
EUR 6 million.
Other
income rose to EUR 265 million from EUR -34 million a year ago. This strong increase was partly caused by lower
negative CVA/DVA impacts: EUR -22 million in the fourth quarter of 2015 versus EUR -80 million in the fourth quarter of 2014.
Excluding CVA/DVA adjustments, other income rose by EUR 242 million year-on-year, among others due to higher revenues at
Financial Markets, a negligible impact from hedge ineffectiveness and positive sales results in the
real estate run-off portfolio. Compared with the third quarter of 2015, which included EUR 40 million of positive CVA/DVA
impacts, other income declined by EUR 80 million. Excluding CVA/DVA adjustments, other income was EUR 17 million lower
quarter-on-quarter, mainly due to lower revenues at Financial Markets, which are traditionally lower in the last quarter of
the year.
Operating
expenses
Underlying
operating expenses declined by EUR 33 million, or 1.3%, compared with the fourth quarter of 2014 to EUR 2,539 million. Expenses
in this quarter included EUR 279 million of regulatory expenses (including the annual Dutch bank tax, the contribution to the
new Dutch resolution fund and a one-off charge in Poland related to the bankruptcy of SK Bank) compared with EUR 182 million of
regulatory expenses one year ago. This quarter also included a number of smaller restructuring provisions in Retail Benelux and
Wholesale Banking which in aggregate amounted to EUR 120 million (and which are expected to deliver annual
|
|
savings
of EUR 65 million by 2017), whereas the fourth quarter of 2014 included EUR 375 million of redundancy provisions. Excluding
both items, expenses increased by EUR 124 million. The increase was mainly visible in the Corporate Line, where expenses were
EUR 104 million higher year-on-year, mainly due to a large release from DGS-related provisions and high value-added tax
refunds in the fourth quarter of 2014. Investments to support business growth in Retail Challengers & Growth Markets and
Wholesale Banking, and an addition to the provision for potential compensation related to certain floating interest rate
loans and interest rate derivatives that were sold in the Netherlands, were largely offset by cost savings and other one-off
items.
Compared
with the third quarter of 2015, expenses increased by EUR 292 million. EUR 174 million was caused by higher regulatory
expenses and the remainder was due to the aforementioned restructuring provisions and other offsetting items. The
fourth-quarter underlying cost/income ratio for ING Bank improved to 62.8% compared with 68.5% one year ago. The full-year
2015 underlying cost/income ratio improved to 55.9% from 58.7% in 2014.
The cost-saving programmes that have been underway at
ING Bank since 2011 are expected to reduce total annual expenses by EUR 1.2 billion by 2017, and by EUR 1.3 billion by 2018. Of
these targeted amounts, EUR 858 million of cost savings have already been achieved. In relation to these initiatives, 7,201 internal
and external FTEs have left ING Bank since the start of the programmes.
The total number of internal staff declined to 52,368 FTEs at year-end
2015. This is a decline of 192 FTEs compared with the end of September 2015 due to reductions in Turkey and the Benelux, partly
offset by FTE growth in Germany and the international network of Wholesale Banking.
Addition
to loan loss provisions
ING
Bank recorded EUR 302 million of risk costs in the fourth quarter, down from EUR 400 million a year ago, but up from EUR 261
million in the previous quarter. Net additions in Retail Netherlands declined further to EUR 59 million, supported by the
recovery of the Dutch economy. Lower arrears resulted in a EUR 6 million net release for the Dutch mortgage portfolio. The
net addition for Dutch business lending was EUR 57 million compared with EUR 96 million a year ago and EUR 45 million in the
previous quarter. In Retail
|
6 | | ING Press Release 4Q2015 |
Consolidated
Results
Belgium,
risk costs increased to EUR 65 million from the low EUR 16 million in the previous quarter. The risk costs in the fourth
quarter were higher than the average quarterly figure in 2015 (EUR 42 million) for Retail Belgium, due to additions for some
specific files. In the Retail Challengers & Growth Markets, net additions rose to EUR 80 million, mainly due to higher
risk costs in Turkey and Poland. Risk costs in Wholesale Banking were EUR 97 million, similar to the level in the previous
quarter, but EUR 55 million lower than a year ago. The risk costs in the current quarter were mainly related to Ukraine, Real
Estate Finance (due to the absence of large releases) and some Structured Finance files. Total NPLs at ING Bank declined to
EUR 15.0 billion from EUR 15.6 billion at the end of September 2015. The non- performing loan (NPL) ratio continued its
downward trend and decreased to 2.5% from 2.6% at the end of the third quarter of 2015.
Total risk costs were 38 basis points of average risk-weighted
assets versus 34 basis points in the previous quarter and 54 basis points in the fourth quarter of 2014. For the full-year, risk
costs were 44 basis points of average risk-weighted assets, which is within the range of the expected loss of 40- 45 basis points
through the cycle.
Underlying
result before tax
The fourth-quarter 2015 underlying result before tax was EUR
1,202 million, up 53.5% compared with the same quarter of 2014. Sequentially, the underlying result before tax declined 19.6%,
predominantly due to higher regulatory expenses.
Net
result Banking
ING
Bank’s underlying net result increased to EUR 822 million from EUR 548 million in the fourth quarter of 2014, but
declined from EUR 1,092 million in the third quarter of 2015. The effective underlying tax rate was 30.6% compared with
27.5% in the fourth quarter of 2014 and 25.4% in the
|
|
previous
quarter. The full-year 2015 effective underlying tax rate rose to 28.0% from 25.8% in 2014.
ING Bank’s fourth-quarter net result was EUR 807 million.
It includes EUR -16 million of special items after tax, which were fully related to restructuring programmes in Retail Netherlands
that were announced before 2013.
The full-year underlying return on IFRS-EU equity rose to
10.8% from 9.9% in 2014. This improvement was driven by an increase in the underlying net result, partly offset by an increase
in the average equity base. The higher average equity base, notwithstanding EUR 2.2 billion of capital upstreams to ING Group in
the first half of 2015, was mainly attributable to retained earnings and higher revaluation reserves. In the second half of 2015,
there were no capital upstreams from ING Bank to ING Group. The Ambition 2017 target range for the underlying return on IFRS-EU
equity is 10-13%.
Net
result ING Group
ING Group’s fourth-quarter net result was EUR 819
million, compared with EUR 1,176 million in the fourth of 2014 and EUR 1,064 million in the previous quarter. These figures include
the net results of the legacy insurance businesses.
In the fourth quarter of 2015, ING Group recorded a net
result of EUR 12 million in Insurance Other. This result was caused by a higher valuation of warrants on NN Group at year-end.
The fourth quarter of 2014 included a net result of EUR 646 million for the legacy insurance activities. Of this amount, EUR 226
million was related to the discontinued operations of NN Group and EUR 418 million to the discontinued operations of Voya. ING
Group’s remaining stake in Voya was sold in the first quarter of 2015. ING’s stake in NN Group was reduced from 68.1%
at the end of 2014 to 25.8% at year-end 2015.
ING Group’s net result per share was EUR 0.21 for
the fourth quarter of 2015 and EUR 1.04 for the full-year 2015.
|
ING Press Release 4Q2015 | 7 |
Consolidated
Results
Dividend
ING is committed to maintaining a healthy Group CET1
ratio in excess of prevailing fully-loaded requirements, currently 12.5%, and to returning capital to our shareholders. ING aims
to pay a progressive dividend over time.
The Board proposes to pay a total dividend of EUR 2,515
million, or EUR 0.65 per (depositary receipt for an) ordinary share, subject to the approval of shareholders at the Annual General
Meeting in April 2016. Taking into account the interim dividend of EUR 0.24 per ordinary share that was paid in August 2015, the
fi dividend will amount to EUR 0.41 per ordinary share and be paid in cash.
Other
events
Further divestment of NN Group
In
January 2016, ING’s stake in NN Group was further reduced to 16.2% after the successful sale of 33 million ordinary
shares of NN Group. As a result of this transaction, and because ING no longer has any nominees on NN Group’s
Supervisory Board as of 14 December 2015, ING has lost significant influence over NN Group and will account for its remaining
stake in NN Group as an available-for–sale investment going forward. The financial impact of this transaction,
amounting to a net profit at closing of EUR 522 million, will be reflected in ING Group’s first-quarter 2016 net
results. This broadly reflects the difference between the EUR 2.2 billion book value of our 25.8% investment in NN Group,
which was fixed using the share price at deconsolidation at the end of May 2015, and the market value of this stake of EUR
2.7 billion at closing of the January 2016 transaction. The transaction will raise ING Group’s fully loaded CET1
ratio by approximately 30 basis points on a pro-forma basis.
On
2 February 2016, ING settled the exchange of the third and final tranche of EUR 337.5 million mandatory exchangeable
subordinated notes which were issued in 2014 as part of the anchor investment in NN Group. EUR 208 million of the notes were
exchanged into 6.9 million NN Group ordinary shares with the three anchor investors. EUR 129.5 million of notes were settled
in cash with RRJ Capital. This transaction reduced ING’s remaining stake in NN Group from 16.2% to 14.1%.
ING Group amends accounting approach
for NN Group anchor investment transaction
On 11 January 2016, ING announced, following a recommendation
by the Netherlands Authority for the Financial Markets (AFM), that it will change its accounting for the anchor investment transaction
related to the divestment of NN Group made in 2014. This change has been reflected in ING Group’s 2015 full-year reporting
and 2014 comparative figures. As a result of this amendment, ING’s reported shareholders’ equity as of 31 December
2014 increased by EUR 920 million to EUR 51,344 million. ING’s reported second-quarter 2015 result decreased by EUR 1,001
million from EUR 1,359 million to EUR 358 million. The amendment had no impact on ING Bank, ING Bank’s underlying net result,
nor on ING’s ongoing operating results, capital or dividend plans.
|
|
Upon
concluding that the original accounting was not in accordance with IFRS, ING has re-evaluated the effectiveness of internal
controls over financial reporting. As a result of this re-evaluation, ING has determined that, while controls were in place
to review accounting policies, a material weakness existed in the operating
effectiveness of internal controls related to the determination of specific accounting policies for certain complex and
non-routine divestment activity. ING is promptly remediating this material weakness.
|
8 | ING Press Release 4Q2015 |
Segment Reporting: Retail Banking
Retail Banking: Consolidated profit and loss account
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail Banking
|
Retail Benelux
|
Retail Challengers & Growth Markets
|
|
|
|
Netherlands
|
Belgium
|
Germany
|
Other
|
In EUR million |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
Profit and loss data |
|
|
|
|
|
|
|
|
|
|
Interest result |
2,279 |
2,329 |
910 |
966 |
471 |
504 |
427 |
385 |
470 |
475 |
Commission income |
356 |
313 |
135 |
118 |
94 |
94 |
62 |
44 |
65 |
57 |
Investment income |
5 |
10 |
1 |
1 |
1 |
7 |
2 |
0 |
0 |
2 |
Other income |
154 |
49 |
36 |
1 |
41 |
21 |
16 |
-19 |
61 |
46 |
Total underlying income |
2,793 |
2,701 |
1,082 |
1,086 |
608 |
625 |
507 |
411 |
596 |
579 |
Expenses excl. regulatory costs |
1,544 |
1,795 |
622 |
906 |
348 |
350 |
196 |
178 |
378 |
362 |
Regulatory costs |
144 |
88 |
100 |
35 |
-12 |
18 |
9 |
19 |
46 |
17 |
Operating expenses |
1,687 |
1,884 |
722 |
941 |
336 |
368 |
205 |
197 |
424 |
378 |
Gross result |
1,106 |
817 |
360 |
144 |
273 |
257 |
302 |
214 |
172 |
201 |
Addition to loan loss provision |
204 |
247 |
59 |
165 |
65 |
18 |
13 |
16 |
67 |
49 |
Underlying result before tax |
902 |
569 |
301 |
-20 |
207 |
240 |
288 |
198 |
105 |
152 |
Customer lending/deposits (end of period, in EUR billion)1) |
|
|
|
|
|
|
|
|
|
|
Residential mortgages |
277.7 |
278.9 |
126.7 |
132.1 |
34.0 |
32.9 |
66.1 |
65.0 |
50.9 |
49.0 |
Other customer lending |
107.6 |
105.7 |
37.4 |
38.7 |
38.3 |
37.5 |
10.4 |
10.9 |
21.6 |
18.7 |
Customer deposits |
435.0 |
417.3 |
131.4 |
129.4 |
79.7 |
76.7 |
120.2 |
114.3 |
103.7 |
96.8 |
Profitability and efficiency1) |
|
|
|
|
|
|
|
|
|
|
Cost/income ratio |
60.4% |
69.8% |
66.7% |
86.7% |
55.2% |
58.8% |
40.5% |
47.9% |
71.2% |
65.4% |
Return on equity based on 10.0% common equity Tier 12) |
15.3% |
10.7% |
14.3% |
-1.5% |
16.9% |
29.4% |
32.0% |
22.5% |
6.8% |
9.8% |
Employees (FTEs, end of period) |
41,177 |
42,121 |
9,928 |
10,675 |
8,823 |
9,034 |
4,262 |
3,917 |
18,164 |
18,495 |
Risk1) |
|
|
|
|
|
|
|
|
|
|
Risk costs in bps of average RWA |
50 |
64 |
41 |
108 |
85 |
27 |
21 |
26 |
56 |
46 |
Risk-weighted assets (end of period, in EUR billion) |
163.1 |
155.2 |
57.7 |
61.2 |
31.8 |
27.5 |
24.9 |
24.4 |
48.7 |
42.0 |
1)
Key figures based on underlying figures
2)
Underlying after-tax return divided by average equity based on 10.0% common equity Tier 1 ratio (annualised)
Retail
Banking’s full-year underlying result before tax rose 17.3% to EUR 3,928 million, driven by higher income and lower
risk costs. The fourth-quarter underlying result before tax increased to EUR 902 million from EUR 569 million in the fourth
quarter of 2014, which included EUR 325 million of redundancy provisions. Excluding this item, the pre-tax result rose 0.9%
as higher income and lower risk costs were largely off by increased expenses (including higher regulatory costs).
Compared with the previous quarter, the pre-tax result fell
by EUR 190 million, due to higher expenses and risk costs, whereas income slightly declined after the EUR 41 million dividend payment
from Bank of Beijing in the third quarter. Net customer lending in Retail Banking remained unchanged in the fourth quarter; net
customer deposits rose by EUR 5.0 billion.
|
|
Underlying
income rose 3.4% from the fourth quarter of 2014 to EUR 2,793 million. This increase was driven by the Retail Challengers
& Growth Markets, notably Germany. The Benelux recorded a small decline in income, mainly due to lower interest margins
on lending and current accounts combined with lower volumes in the Netherlands. The margin on savings improved, supported by
the lowering of client savings rates in most countries. Compared with the third quarter of 2015, income decreased by 1.1%.
The net production of customer lending (excluding Bank Treasury, currency impacts and transfers of WUB mortgages to NN Bank)
was nil in the fourth quarter, as EUR 1.8 billion growth in mortgages was offset by a EUR 1.8 billion decline in other
customer lending. The decrease in other customer lending was due to lower business lending in the Netherlands and a decrease
in one large exposure in Belgium. Net customer deposits (excluding Bank Treasury and currency impacts)
grew by EUR 5.0 billion.
Operating
expenses declined by EUR 197 million, or 10.5%, from the fourth quarter of 2014 to EUR 1,687 million. This decline was mainly
caused by the EUR 325 million of redundancy provisions recorded a year ago, partly
offset by EUR 56 million of higher regulatory costs (due to the new Dutch resolution fund, a one-off charge in Poland and
a write-back in Belgium) and an addition to the provision for potential compensation related to certain floating interest rate
loans and interest rate derivatives that were sold in the Netherlands. Additional redundancy costs in the Benelux
|
ING Press Release 4Q2015 | | 9 |
Segment Reporting:
Retail Banking
were largely offset by a provision release and a value-added
tax refund. Compared with the third quarter, expenses increased by EUR 120 million, of which EUR 59 million was due to higher regulatory
costs.
Risk
costs at Retail Banking were EUR 204 million, down 17.4% from a year ago due to a sharp decline in the Netherlands. This was
partly offset by higher risk costs in Belgium, Poland and Turkey. Compared with the previous quarter, risk costs were 24.4%
higher. Risk costs over average risk-weighted assets increased to 50 basis points in the fourth quarter of 2015. On a
full-year basis, risk costs declined to 54 basis points from 71 basis points in 2014.
The underlying return on equity, based on a 10% common equity
Tier 1 ratio, was 15.3% in the fourth quarter of 2015 compared with 10.7% a year ago and 20.6% in the previous quarter. The full-year
2015 underlying ROE rose to 17.6%.
Retail
Netherlands
Retail
Netherlands posted a solid fourth-quarter underlying result before tax of EUR 301 million, up from EUR -20 million a year
ago, which included EUR 325 million of redundancy provisions. Excluding this item, the result decreased by EUR 4 million.
Income was slightly lower, whereas higher regulatory costs (mainly reflecting the new Dutch resolution fund) and the
provision for potential compensation related to certain floating interest rate loans and interest rate derivatives that were
sold in the Netherlands, were offset by a lower net addition to loan loss provisions.
Total
underlying income fell 0.4% compared with a year ago to EUR 1,082 million as lower interest results were largely offset by higher
fee income and higher other income. The interest result declined 5.8% due to lower lending volumes and lower margins on lending
products and current accounts. The interest margin on savings improved, supported by the lowering of client savings rates. The
decline in volumes was, aside from low demand in business lending, mainly caused by the continued transfer of mortgages
from WestlandUtrecht Bank (WUB) to NN Group and the run-off in the WUB mortgage portfolio. The total mortgage portfolio declined
in the fourth quarter by EUR 1.7 billion, of which EUR 1.2 billion was at WUB and EUR 0.2 billion due to a decline in the fair
value hedge on mortgages. The net production in other customer lending was EUR -1.2 billion due to decreasing volumes in business
lending. The net production of customer deposits was EUR 0.1 billion, as some outflow in savings/
|
|
deposits
was more than offset by higher current accounts volumes.
Compared with the third quarter of 2015, income decreased
0.7%, reflecting a slightly lower margin on mortgages combined with lower volumes, partly compensated by an improved margin on
savings.
Operating
expenses totalled EUR 722 million, which is EUR 219 million, or 23.3%, lower than a year ago. Excluding the EUR 325 million
redundancy provision booked in the fourth quarter of 2014, expenses rose by EUR 106 million, or 17.2%, mainly reflecting EUR
65 million of higher regulatory costs and an addition to the provision the provision for potential compensation related to
certain floating interest rate loans and interest rate derivatives that were sold in the Netherlands. Extra redundancy costs
were largely offset by a provision release. Sequentially, expenses rose by EUR 130 million, or 22.0%. This was mainly due to
EUR 100 million of regulatory costs reflecting the Dutch bank tax and the
contribution to the new Dutch resolution fund, as well as the seasonal impact of the holiday provision. The cost-saving
programmes at Retail Netherlands remain on track to realise EUR 675 million of cost savings by the end of 2017. Of this
amount, EUR 438 million has been realised since 2011.
Risk
costs declined to EUR 59 million in the fourth quarter of 2015 compared with EUR 165 million a year ago. On a sequential
basis, risk costs were EUR 23 million lower. Risk costs for Dutch mortgages amounted to EUR -6 million versus EUR 23 million
in the third quarter of 2015 and EUR 41 million one year ago, reflecting lower non-performing loans. The net addition for
business lending was EUR 57 million, which is EUR 12 million higher than in the
previous quarter, but EUR 39 million lower than in the fourth quarter of 2014.
Risk-weighted assets decreased by
EUR 0.9 billion in the fourth quarter to EUR 57.7 billion, mainly due to improvements in the Dutch mortgage portfolio.
Retail
Belgium
The fourth-quarter underlying result before tax of Retail
Belgium was EUR 207 million. This represents a decline on both the fourth quarter of 2014 and the third quarter of 2015 and is
due to higher additions to loan loss provisions.
Underlying
income was EUR 608 million, down EUR 17 million, or 2.7%, year-on-year. This was mainly due to lower
|
10 | ING Press Release 4Q2015 |
Segment Reporting:
Retail Banking
income on
mortgages, reflecting lower interest margins and an accelerated amortisation of deferred acquisition costs at Record Bank,
combined with lower prepayment fees. On a sequential basis, income decreased by EUR 31 million, or 4.9%, as the previous
quarter included EUR 23 million of revenues from the sale of associates. The remaining decrease is explained by a lower
margin on mortgages. The net production of customer lending (excluding Bank Treasury) was EUR -0.6 billion in the fourth
quarter, mainly reflecting lower business lending, while the net production in mortgages was EUR 0.3 billion. The net
production of customer deposits was EUR 0.1 billion.
Operating
expenses declined to EUR 336 million from EUR 368 million a year ago. The decrease mainly reflects lower regulatory costs
following a partial write-back on the contribution to the Belgian resolution fund in the previous quarter and a value-added
tax refund, partly off by additional restructuring costs. Compared with the third quarter of 2015, expenses decreased by
EUR 45 million, mainly due to the aforementioned items. The cost-saving programme announced by ING Belgium to realise EUR 160
million of cost savings by the end of 2017 was achieved in this quarter.
Fourth-quarter risk costs amounted to EUR 65 million versus
EUR 18 million a year ago and EUR 16 million in the third quarter of 2015. The risk costs in the fourth quarter were higher than
the average quarterly figure in 2015 (EUR 42 million) due to additions made for some specific files.
Risk-weighted assets increased by EUR 1.8 billion in
the fourth quarter to EUR 31.8 billion, mainly due to an add-on to the risk weight of Belgian SME lending.
Retail
Germany
Retail Germany’s
fourth-quarter underlying result before tax was EUR 288 million, up from EUR 198 million in the fourth quarter of 2014. The improvement
was driven by higher income, which was attributable to volume growth and higher margins on savings, as well as higher commission
income and positive hedge ineffectiveness results. Compared with the third quarter of 2015, the result before tax increased by
EUR 68 million, mainly due to higher commission income and lower regulatory costs.
Total underlying
income was EUR 507 million, up 23.4% from the fourth quarter of 2014. The increase
reflects higher
|
|
interest
results, driven by increased lending and savings balances, as well as a higher savings margin compared with a year ago.
Income also rose due to a EUR 23 million one-time impact on consumer loan origination (mainly reflected in commission income) and positive hedge ineffectiveness. Compared with the third quarter, total income increased 9.3%, driven by growth in core
lending and the one-time impact on consumer loan origination.
Customer deposits (excluding Bank Treasury products)
recorded a net growth of EUR 1.3 billion in the fourth quarter of 2015. Total customer lending decreased by EUR 1.2 billion, but
net growth in core lending, excluding Bank Treasury products, was EUR 1.2 billion. Residential mortgages increased by EUR 1.0 billion,
and consumer lending rose by EUR 0.2 billion. Bank Treasury products (primarily call money and term deposits) decreased by EUR
2.3 billion.
Operating
expenses were EUR 205 million, up 4.1% from the fourth quarter of 2014. The increase reflects higher headcount at both
ING-DiBa and Interhyp, and investments to support business growth and to attract primary banking clients; the increase was
partly offset by EUR 10 million of lower regulatory costs. Expenses decreased from EUR 226 million in the previous quarter,
mainly due to EUR 30 million lower regulatory costs as a consequence of recording these costs in specific periods.
Risk costs were EUR 13 million compared with EUR 16 million
in the fourth quarter of 2014 and EUR 17 million in the previous quarter. Risk costs in the fourth quarter of 2015 were 21 basis
points of average risk-weighted assets.
Risk-weighted assets decreased by EUR 0.2 billion in the
fourth quarter to EUR 24.9 billion, mainly due to a model update in the German mortgage portfolio.
Retail
Other Challengers & Growth Markets
The underlying result before tax of Retail Other Challengers &
Growth Markets decreased to EUR 105 million from EUR 152 million in the fourth quarter of 2014. The decrease was mainly due to
a EUR 31 million one-off charge in Poland related to the bankruptcy of SK Bank (remaining EUR 6 million in Wholesale Banking),
whereas the fourth quarter of 2014 included a EUR 17 million gain on the sale of a white-label mortgage portfolio in Australia.
Compared with the third quarter of 2015, the result before tax fell by EUR 109 million, mainly due to EUR 37 million of higher
regulatory expenses
|
ING Press Release 4Q2015 | | 11 |
Segment Reporting:
Retail Banking
(including the one-off
charge in Poland) and EUR 18 million of higher risk costs, while the third-quarter result benefited from the annual dividend from
Bank of Beijing (EUR 41 million).
Total underlying income
increased by EUR 17 million to EUR 596 million compared with a year ago, mainly driven by improved commercial results across
most of the units, partly offset by exchange rate developments (mainly the weaker Australian dollar and Turkish lira compared
to the euro) and the gain on the sale of a mortgage portfolio in Australia in the fourth quarter of 2014. Compared with the
third quarter of 2015, underlying income declined by EUR 34 million as the third quarter benefited from the annual dividend
from Bank of Beijing.
Customer
lending increased by EUR 3.7 billion to EUR 72.5 billion in the fourth quarter of 2015, supported by EUR 2.0 billion of
currency impacts. Core customer lending, excluding currency impacts and Bank Treasury products, grew by EUR 1.6 billion, with
a large part of the growth coming from Australia, Poland and Spain. Customer deposits increased by EUR 5.1 billion in the
fourth quarter. Excluding currency impacts and Bank Treasury products, net customer deposits grew by EUR 3.5 billion, mainly
in Spain, Poland, Australia, Romania and Turkey.
Operating
expenses increased by EUR 46 million from a year ago to EUR 424 million due to EUR 29 million of higher regulatory expenses
(including the one-off charge in Poland related to the bankruptcy of SK Bank), investments to support business growth in most
of the business units, and inflation adjustments in the Growth Markets. Compared with the third quarter of 2015, operating
expenses rose by EUR 56 million, mainly due to higher regulatory expenses and higher expenses in Growth Markets.
Risk costs were EUR 67 million versus EUR 49 million
in both the fourth quarter of 2014 and third quarter of 2015. The increase in risk costs was driven by higher risk costs in mainly
Turkey and Poland.
Risk-weighted assets increased by EUR 1.4 billion to EUR
48.7 billion in the fourth quarter, mainly reflecting the increased market value of the Asian bank stakes.
|
|
|
12 | ING Press Release 4Q2015 |
Segment Reporting:
Wholesale Banking
Wholesale Banking: Consolidated profit and loss account
|
|
|
|
|
|
|
|
|
|
|
|
Total Wholesale
Banking |
Industry
Lending
|
General
Lending &
Transaction Services
|
Financial
Markets
|
Bank
Treasury,
Real Estate & Other
|
In EUR million |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
Profit and loss data |
915 |
923 |
491 |
433 |
257 |
249 |
126 |
199 |
40 |
42 |
Interest result |
|
|
|
|
|
|
|
|
|
|
Commission income |
252 |
244 |
119 |
135 |
93 |
88 |
41 |
20 |
-2 |
1 |
Investment income |
-8 |
16 |
1 |
-7 |
0 |
0 |
3 |
6 |
-12 |
16 |
Other income excl. CVA/DVA |
154 |
41 |
5 |
-5 |
13 |
21 |
96 |
31 |
40 |
-5 |
Underlying income excl. CVA/DVA |
1,313 |
1,225 |
617 |
557 |
363 |
358 |
266 |
256 |
67 |
54 |
CVA/DVA |
-9 |
-72 |
-9 |
-72 |
Total underlying income |
1,304 |
1,153 |
617 |
557 |
363 |
358 |
257 |
184 |
67 |
54 |
Expenses excl. regulatory costs |
656 |
639 |
151 |
139 |
201 |
189 |
227 |
218 |
76 |
93 |
Regulatory costs |
101 |
66 |
25 |
14 |
15 |
12 |
58 |
35 |
3 |
5 |
Operating expenses |
757 |
705 |
176 |
153 |
216 |
201 |
286 |
253 |
78 |
98 |
Gross result |
547 |
447 |
441 |
403 |
147 |
157 |
-29 |
-69 |
-12 |
-45 |
Addition to loan loss provision |
97 |
152 |
62 |
122 |
24 |
8 |
4 |
-1 |
7 |
23 |
Underlying result before tax |
450 |
295 |
379 |
282 |
123 |
149 |
-33 |
-68 |
-19 |
-68 |
Customer lending/deposits |
1.3 |
1.7 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
1.3 |
1.7 |
(end of period, in EUR billion)1) |
|
|
|
|
|
|
|
|
|
|
Residential mortgages |
|
|
|
|
|
|
|
|
|
|
Other customer lending |
146.1 |
126.9 |
99.2 |
82.5 |
38.1 |
33.5 |
2.0 |
3.7 |
6.8 |
7.2 |
Customer deposits |
65.8 |
68.2 |
1.5 |
2.0 |
46.4 |
44.3 |
4.7 |
5.9 |
13.2 |
16.0 |
Profitability and efficiency1) |
58.0% |
61.2% |
28.6% |
27.5% |
59.6% |
56.1% |
111.1% |
137.4% |
117.3% |
182.8% |
Cost/income ratio |
|
|
|
|
|
|
|
|
|
|
Return on equity based on
10.0% common equity Tier 12) |
8.2% |
6.0% |
18.0% |
18.0% |
8.1% |
12.3% |
-4.2% |
-6.8% |
-3.5% |
-27.3% |
Risk1) |
26 |
45 |
41 |
96 |
22 |
9 |
5 |
-1 |
28 |
81 |
Risk costs in bps of average RWA |
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets (end
of period, in EUR billion) |
152.4 |
137.2 |
63.2 |
51.2 |
44.3 |
38.9 |
34.6 |
36.8 |
10.3 |
10.3 |
1)
Key figures based on underlying figures
2)
Underlying after-tax return divided by average equity based on 10.0% common equity Tier 1 ratio (annualised)
Wholesale Banking posted a good set of full-year 2015 results
on the back of continued strong Industry Lending performance, good volume growth and improved Financial Markets results. The underlying
result before tax was EUR 2,560 million, up 28.9% from 2014.
In the fourth quarter, the underlying result before
tax was EUR 450 million, EUR 155 million higher than a year ago due to volume growth in Industry Lending, less-negative
CVA/DVA impacts in Financial Markets and lower additions to loan loss provisions. The decline compared with the previous
quarter was caused by seasonality in Financial Markets and the inclusion of both the annual Dutch bank tax and new Dutch
resolution fund in this quarter.
|
|
Total
underlying income was 13.1% higher than in the fourth quarter of 2014 and 6.1% higher than in the prior quarter. Credit and
debt valuation adjustments (CVA/DVA), which were reported within Financial Markets, amounted to EUR -9 million for the
quarter, compared with EUR -72 million in the same quarter of last year and EUR 14 million in the previous quarter. The
underlying income excluding CVA/DVA effects grew 7.2% compared with the fourth quarter of 2014 and 8.1% from the previous
quarter.
Income
in Industry Lending and General Lending & Transaction Services increased year-on-year by, respectively, 10.8% and 1.4%,
on the back of volume growth, supported by favourable FX effects. Financial Markets income excluding CVA/DVA effects rose
3.9% from the fourth quarter of 2014, mainly due to higher client flows in Debt Capital Markets. Compared with the third
quarter of 2015, the 8.1% income increase excluding CVA/DVA was mainly due to Industry Lending, as the third quarter of the
year was negatively impacted by a EUR 71 million impairment on an equity stake.
The
interest result declined 0.9% on the same quarter of 2014, but rose 6.6% on the previous quarter, both driven by volatility
within Financial Markets. Excluding Financial Markets, the interest result was
up 9.0% year-on-year due to loan growth and stable margins in the core lending business, supported by positive currency
effects. Sequentially, the interest result excluding Financial Markets was stable.
|
ING Press Release 4Q2015 | 13 |
Segment Reporting:
Wholesale Banking
Commission
income was up 3.3% on the fourth quarter of 2014 due to higher client flows in Debt Capital Markets. The year-on-year increase
in Financial Markets was partly offset by lower commission income in Structured Finance,notably
in Natural Resources Finance and Trade & Commodity Finance, which felt the effects of decreasing commodity prices. Compared
with the prior quarter, commission income rose 16.1%, mainly driven by Financial Markets.
Investment
income was EUR -8 million for the quarter, down from EUR 16 million in the fourth quarter of 2014 but up from EUR -60 million
in the previous quarter. The current quarter included a capital loss in Bank Treasury, Real Estate & Other related to the
sale of the UK Lease portfolio, whereas the previous quarter recorded a EUR 71 million impairment on an equity stake in
Industry Lending.
Total other income amounted to EUR 145 million, which
is EUR 176 million higher than a year ago, but down EUR 69 million from the previous quarter. The variance on both comparable quarters
was mainly in Financial Markets, partly due to CVA/DVA effects.
Compared
to the fourth quarter of 2014, which included EUR 50 million of additional redundancy provisions, operating expenses
increased 7.4% due to the EUR 44 million contribution to the new Dutch resolution fund, a provision for potential
compensation related to certain floating interest rate loans and interest rate derivatives that were sold in the Netherlands,
positive currency effects, inflationary impacts and an increase in FTEs to support business growth. Operating expenses increased
25.1% on the previous quarter, mainly due to higher regulatory expenses (including the annual Dutch bank tax), the provision
for potential compensation in the Netherlands and some additional restructuring costs. In this quarter, the full-year booking
of the Dutch bank tax amounted to EUR 66 million, compared with EUR 64 million in the same quarter of 2014. The previously
announced restructuring programmes are on track to realise EUR 340 million of cost savings by the end of 2017. At the end of
2015, EUR 260 million of cost savings had already been realised. The cost/income ratio was 58.0% in the fourth quarter, up
from the previous quarter due to seasonality in Financial Markets and the timing of the booking of regulatory costs. For the
full year 2015, the cost/income ratio was 45.8%; excluding CVA/DVA it was 47.4%.
Risk
costs were modest for the quarter at EUR 97 million, or 26 basis points of average total risk-weighted assets. The net addition
to loan loss provisions declined from EUR 152 million in the fourth quarter of 2014 and is in line with the previous quarter.
The NPL ratio continued its downward trend to reach 2.8% at year-end 2015.
Risk-weighted
assets (RWA) were EUR 152.4 billion, up EUR 6.0 billion on the previous quarter, due to volume growth in the core lending business,
foreign currency effects and model updates in Industry Lending.
|
|
The underlying return on equity, based on a 10% core Tier 1
ratio, was 8.2%, up from 6.0% in the fourth quarter of 2014, but down from 11.2% in the previous quarter.
Industry
Lending
Industry
Lending posted an underlying result before tax of EUR 379 million, up 34.4% year-on-year due to lower risk costs and higher
income, partly off by higher expenses. Income increased 10.8% year-on-year due to continued volume growth in Structured
Finance and Real Estate Finance, helped by positive currency effects. The yearly portfolio growth excluding FX effects
totalled EUR 10.9 billion, or 13.2%, of which EUR 8.6 billion related to Structured Finance and EUR 2.2 billion came from
Real Estate Finance. Expenses rose 15.0% on the same quarter of 2014 due to the contribution to the new Dutch resolution fund
combined with continued investments to support future growth. The cost/income ratio was 28.6% in the fourth quarter of
2015.
The underlying result before tax increased 15.2% on the
previous quarter due to higher income, partly off by higher expenses and increased risk costs. Income increased 19.3% because
of the EUR 71 million impairment on an equity stake reported in the previous quarter. Sequentially, expenses rose 18.9% due to
the booking of the annual Dutch bank taxes.
The net addition to loan loss provisions amounted to EUR
62 million, or 41 basis points of average risk weighted-assets, lower than the EUR 122 million in the same quarter in 2014, but
higher than the EUR 40 million in the previous quarter.
General
Lending & Transaction Services
The underlying result before tax from General Lending &
Transaction Services was EUR 123 million, down 17.4% compared with the same quarter of 2014, but up 18.3% on the third quarter
of 2015. Income was 1.4% higher year- on-year as an increase in General Lending and Working Capital Solutions on the back of portfolio
growth was partly
|
14 | ING Press Release 4Q2015 |
Segment Reporting:
Wholesale Banking
offset by lower interest margins
in Trade Financial Services and Payments & Cash Management. Sequentially, income increased 5.2% due to higher income in General
Lending.
Expenses rose 7.5% year-on-year and 6.4% sequentially,
partly due to higher IT investments, inflationary increases and higher regulatory costs. Risk costs were EUR 24 million, up from
EUR 8 million in the fourth quarter of 2014, but down from EUR 39 million in the previous quarter.
Financial
Markets
Financial Markets posted an underlying result before
tax of EUR -33 million, up from EUR -68 million in the fourth quarter of 2014, but down from EUR 65 million in the previous quarter.
The result in the current quarter included EUR -9 million of CVA/DVA adjustments compared with EUR -72 million a year ago and EUR
14 million in the previous quarter.
Income excluding CVA/DVA effects rose 3.9% year-on-year,
mainly due to strong client flows in Debt Capital Markets. Traditionally, income excluding CVA/DVA impacts is lower in the fourth
quarter than in the previous quarter. Sequentially, income excluding CVA/DVA impacts decreased 3.6%, mainly within the FX business.
Operating expenses were up 13.0% year-on-year due to
the contribution to the new Dutch resolution fund. Compared with the third quarter of 2015, expenses increased 26.5% due to the
aforementioned contribution to the Dutch resolution fund and the annual Dutch bank tax.
Bank
Treasury, Real Estate & Other
Bank Treasury, Real Estate & Other recorded an underlying
result before tax of EUR -19 million, up from EUR -68 million in the same quarter of 2014, but down from EUR 29 million in the
previous quarter. Year-on-year income was up 24.1% due to higher positive revaluations on derivatives used for hedging
|
|
purposes and lower funding costs in Bank Treasury. Improved
sales results in Real Estate Development were partly offset by negative income related to the UK Lease run-off portfolio, which
has largely been sold. Sequentially, income decreased 11.8%, mainly related to the sale of the UK Lease portfolio.
Expenses decreased 20.4% on the same quarter of last year,
which included EUR 50 million of redundancy provisions and higher impairments in the Real Estate Development run-off portfolio.
This quarter included the booking of the annual Dutch bank tax, a provision for potential compensation related to certain floating
interest rate loans and interest rate derivatives that were sold in the Netherlands, and some restructuring costs, partly related
to the UK Lease portfolio. These factors mainly explain the EUR 49 million increase in
expenses compared with the previous quarter. Risk costs decreased to EUR 7 million from EUR 23 million in the fourth of 2014 and
EUR 18 million in the previous quarter, and are related to the Lease Italy book.
|
ING Press Release 4Q2015 | 15 |
Segment Reporting:
Corporate Line Banking
Corporate Line: Consolidated profit and loss account |
|
|
|
|
In EUR million |
4Q2015 |
4Q2014 |
|
DVA on own-issued debt
was EUR -13 million compared with EUR -8 million in the fourth quarter of 2014. The trend of ING’s widening credit spread
reversed in the fourth quarter of 2015 compared with the previous quarter, and the tightening of the credit spread resulted in
a negative revaluation.
The result of Other was EUR -91 million versus EUR 22 million in the same quarter of 2014, which included
a large release from DGS-related provisions and high value-added tax refunds. The remainder of the decline was mainly caused by
higher shareholder expenses, a higher contribution to the annual Dutch bank tax and increased charges for supervision by regulators.
|
Profit and loss data |
|
|
|
|
Interest result |
-22 |
-45 |
|
|
Commission income |
0 |
-1 |
|
|
Investment income |
1 |
0 |
|
|
Other income |
-34 |
-52 |
|
|
Total underlying income |
-55 |
-98 |
|
|
Expenses excl. regulatory costs |
60 |
-44 |
|
|
Regulatory costs |
35 |
27 |
|
|
Operating expenses |
95 |
-17 |
|
|
Gross result |
-150 |
-81 |
|
|
Addition to loan loss provision |
0 |
0 |
|
|
Underlying result before tax of which: |
-150 |
-81 |
|
|
Income on capital surplus |
30 |
37 |
|
|
Financing charges |
-24 |
-25 |
|
|
Other Capital Management |
82 |
15 |
|
|
Capital Management excl. DVA |
88 |
27 |
|
|
Bank Treasury excl. DVA |
-134 |
-123 |
|
|
DVA |
-13 |
-8 |
|
|
Other |
-91 |
22 |
|
|
|
|
|
|
|
Corporate Line Banking posted an underlying result
before tax of EUR -150 million compared with EUR -81 million in the fourth quarter of 2014. The EUR 69 million decline in the pre-tax
result was mainly related to higher expenses, as the fourth quarter of 2014 included a large release from DGS- related provisions
and high value-added tax refunds. The result in the third quarter of 2015 was EUR -124 million.
Capital Management-related results were EUR 88 million
in the fourth quarter of 2015, compared with EUR 27 million in the fourth quarter of 2014.
Within
the Capital Management-related results, income on capital surplus was EUR 30 million compared with EUR 37 million in the
fourth quarter of 2014. The year-on-year decline was mainly caused by higher interest expenses related to USD 2.25 billion of
CRD IV-eligible securities, which were issued in April 2015. Financing charges were EUR -24 million in the fourth quarter of
2015, compared with EUR -25 million in the same quarter of 2014. The result of Other Capital Management was EUR 82 million
versus EUR 15 million a year ago, as that quarter included negative fair- value results on own-issued subordinated debt. The
result in the fourth quarter of 2015 benefited from the discontinuation of certain FX hedges, the release of a hedge reserve
and a non-recurring gain related to the call of own-issued subordinated debt.
Bank Treasury-related results include the isolated legacy
costs (mainly negative interest results) for replacing short- term funding with long-term funding. The fourth-quarter 2015 result
was EUR -134 million compared with EUR -123 million in the fourth quarter of 2014. The decline was mainly due to a one-off result
related to the buy-back of a bond.
|
|
|
16 | ING Press Release 4Q2015 |
Segment Reporting: Geographical Split Banking
Geographical split: Consolidated profit and loss account
|
|
|
|
|
|
|
|
|
|
|
|
Netherlands
|
Belgium
|
Germany
|
Other
Challengers
|
Growth
Markets
|
Wholesale
Banking
Rest of World
|
Other
1)
|
In EUR million |
4Q2015
|
4Q2014
|
4Q2015
|
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
Profit and loss data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest result |
1,151 |
1,168 |
563 |
647 |
489 |
417 |
305 |
311 |
289 |
271 |
397 |
438 |
-22 |
-44 |
Commission income |
198 |
187 |
124 |
107 |
73 |
54 |
38 |
24 |
69 |
74 |
106 |
113 |
0 |
-1 |
Investment income |
2 |
-7 |
1 |
22 |
3 |
0 |
0 |
1 |
0 |
3 |
-3 |
7 |
-3 |
0 |
Other income excl. CVA/DVA |
48 |
29 |
55 |
-19 |
18 |
-17 |
19 |
30 |
77 |
47 |
68 |
30 |
3 |
-53 |
Underlying income excl. CVA/DVA |
1,399 |
1,376 |
743 |
757 |
583 |
453 |
361 |
366 |
435 |
395 |
567 |
587 |
-23 |
-99 |
CVA/DVA 2) |
-38 |
36 |
-6 |
-6 |
0 |
0 |
7 |
-4 |
0 |
0 |
27 |
-97 |
-13 |
-8 |
Underlying income |
1,361 |
1,411 |
736 |
751 |
583 |
453 |
369 |
362 |
435 |
394 |
594 |
490 |
-36 |
-107 |
Expenses excl. regulatory costs |
837 |
1,129 |
437 |
438 |
217 |
197 |
203 |
181 |
243 |
247 |
258 |
227 |
64 |
-28 |
Regulatory costs |
130 |
49 |
1 |
35 |
14 |
22 |
12 |
8 |
48 |
13 |
41 |
28 |
35 |
27 |
Operating expenses |
967 |
1,178 |
438 |
473 |
230 |
219 |
214 |
189 |
291 |
260 |
299 |
254 |
99 |
-1 |
Gross result |
394 |
233 |
298 |
278 |
353 |
234 |
154 |
173 |
144 |
135 |
295 |
236 |
-135 |
-106 |
Addition to loan loss provision |
107 |
224 |
64 |
16 |
7 |
8 |
30 |
50 |
56 |
46 |
37 |
57 |
0 |
0 |
Underlying result before tax |
287 |
10 |
234 |
263 |
345 |
226 |
125 |
123 |
87 |
89 |
259 |
179 |
-135 |
-106 |
Retail Banking |
301 |
-20 |
207 |
240 |
288 |
198 |
61 |
89 |
44 |
62 |
0 |
0 |
0 |
0 |
Wholesale Banking |
-14 |
30 |
26 |
23 |
57 |
28 |
63 |
34 |
43 |
26 |
259 |
179 |
15 |
-25 |
Corporate Line |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
-150 |
-81 |
Underlying result before tax |
287 |
10 |
234 |
263 |
345 |
226 |
125 |
123 |
87 |
89 |
259 |
179 |
-135 |
-106 |
Customer lending/deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(end of period, in EUR billion)3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgages |
127.8 |
133.6 |
34.1 |
33.0 |
66.1 |
65.1 |
44.0 |
43.3 |
6.9 |
5.7 |
0.0 |
0.0 |
0.0 |
0.0 |
Other lending |
72.7 |
71.8 |
52.3 |
49.5 |
24.2 |
18.7 |
22.1 |
18.3 |
25.5 |
21.6 |
56.9 |
52.7 |
0.0 |
0.3 |
Customer deposits |
159.9 |
159.0 |
94.5 |
90.3 |
120.9 |
114.9 |
76.9 |
73.9 |
31.7 |
27.5 |
16.9 |
19.9 |
7.9 |
3.7 |
Profitability and efficiency3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio |
71.0% |
83.5% |
59.5% |
62.9% |
39.5% |
48.3% |
58.2% |
52.2% |
67.0% |
65.9% |
50.3% |
51.9% |
n.a. |
n.a. |
Return on equity based on 10.0% common equity Tier 14) |
8.3% |
0.1% |
11.9% |
19.3% |
30.0% |
21.8% |
13.9% |
9.3% |
6.5% |
7.9% |
9.6% |
9.9% |
-77.0% |
-53.9% |
Employees (FTEs, end of period) |
13,365 |
14,005 |
10,573 |
10,721 |
4,519 |
4,138 |
3,731 |
3,578 |
16,209 |
16,677 |
3,956 |
3,737 |
15 |
42 |
Risk3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk costs in bps of average RWA |
45 |
89 |
53 |
15 |
9 |
11 |
45 |
79 |
51 |
51 |
23 |
39 |
0 |
0 |
Risk-weighted assets (end of period, in EUR billion) |
94.9 |
99.4 |
50.0 |
43.9 |
32.9 |
28.6 |
26.8 |
24.6 |
45.6 |
36.6 |
64.8 |
58.2 |
3.2 |
5.0 |
1)
Region Other consists of Corporate Line and Real Estate run-off portfolio
2)
CVA/DVA reported within Wholesale Banking and Corporate Line
3)
Key figures based on underlying figures
4)
Underlying after-tax return divided by average equity based on 10.0% common equity Tier 1 ratio (annualised)
|
|
The
Netherlands
The
underlying result before tax of the banking activities in the Netherlands improved to EUR 287 million from EUR 10 million in
the fourth quarter of 2014, but it declined from EUR 502 million in the third quarter of 2015. The year-on-year improvement
was fully caused by lower expenses and risk costs, whereas income was slightly lower. Excluding CVA/DVA impacts, income rose
1.7%, driven by Wholesale Banking. Expenses fell by EUR 211 million, as higher regulatory costs, extra restructuring
provisions, and an addition to the provision for potential compensation related to certain floating interest rate loans and
interest rate derivatives that were sold in the Netherlands were more than compensated by the impact of EUR 375 million of
redundancy provisions that were recorded in the fourth quarter of 2014. The improved economic conditions in the Netherlands,
including higher house prices, resulted in EUR 117 million of lower risk costs. Compared with the third quarter of 2015, the
result before tax declined by EUR 215 million, of which EUR 130 million was due to the Dutch regulatory expenses recorded in
the fourth quarter and EUR 51 million to a negative swing in CVA/DVA impacts. The fourth-
|
ING Press Release 4Q2015 | 17 |
Segment Reporting: Geographical Split Banking
quarter underlying cost/income ratio in the Netherlands
was 71.0%, bringing the full-year 2015 cost/income ratio to 57.3% (versus 60.9% in 2014). The full-year underlying return on equity,
based on a 10% common equity Tier 1 ratio, rose to 13.0% from 9.2% in 2014.
Total
customer lending declined by EUR 3.2 billion in the fourth quarter to EUR 200.5 billion, of which EUR -0.5 billion was caused
by additional transfers of WUB mortgages to NN Bank and EUR -0.2 billion due to Bank Treasury. Excluding these items, net
customer lending decreased by EUR 2.5 billion, of which EUR -0.2 billion was in Wholesale Banking. Net customer lending in
Retail Banking declined by EUR 2.3 billion, mainly due to the run-off in the
WUB portfolio, high mortgage prepayments and a EUR 1.2 billion decline in Retail business lending. Customer deposits
decreased by EUR 3.2 billion to EUR 159.9 billion. Net customer deposits (excluding Bank Treasury products) grew by EUR 0.7
billion: customer savings and deposits shrank by EUR 0.9 billion, whereas current accounts grew by EUR 1.6 billion
Belgium
The banking activities in Belgium, including ING Luxembourg,
generated an underlying result before tax of EUR 234 million, which is 11.0% lower than a year ago. This decline was fully caused
by lower results in Retail Banking. Total income in Belgium decreased 2.0% year-on-year. Expenses declined by EUR 35 million, or
7.4%, mainly due to lower regulatory costs, as the fourth quarter include a partial write-back on the contribution to the Belgian
resolution fund in the previous quarter. Additional restructuring costs were largely off by a value-added tax refund. Risk costs
increased to EUR 64 million from EUR 16 million a year ago. Compared with the previous quarter, the result before tax fell 8.2%,
as lower income and higher risk costs were only partly off by lower expenses. The underlying cost/income ratio improved to 59.5%
from 62.9% in the fourth quarter of 2014 and 64.1% in the previous quarter. The underlying return on equity, based on a 10% common
equity Tier 1 ratio, was 11.9% in the fourth quarter, bringing the full-year underlying ROE to 17.2% versus 21.0% in 2014.
Total
customer lending increased by EUR 0.6 billion in the quarter to EUR 86.4 billion; this includes a EUR 0.1 billion increase
in Bank Treasury lending and EUR 0.1 billion of currency impacts. The net production of customer lending was EUR 0.4 billion,
of which EUR 0.3 billion was in mortgages. The net production in other (non-mortgage) customer lending was limited, as growth
in Wholesale Banking was almost fully off by a net decline in Retail Banking.
Customer deposits had a net
|
|
outflow of EUR 1.0 billion to EUR 94.5 billion; customer
savings and deposits shrank by EUR 1.6 billion, whereas current accounts grew by EUR 0.6 billion.
Germany
The
underlying result before tax of the banking activities in Germany, including ING Austria, increased 52.7% to EUR 345 million
compared with the fourth quarter of 2014. Income rose 28.7%, mainly due to higher interest results (fuelled by volume growth
and higher margins) and higher other income related to positive hedge ineffectiveness. Expenses rose 5.0%, mainly reflecting
an increase in staff and investments to support business growth. Risk costs were in line with the fourth quarter of 2014. The
underlying cost/income ratio was 39.5%. The underlying return on equity, based on a 10% common equity Tier 1 ratio, increased
to 30.0% in the fourth quarter from 21.8% a year ago.
Total
customer lending rose by EUR 2.2 billion in the fourth quarter to EUR 90.3 billion, despite a EUR 2.4 billion decline in Bank
Treasury products (primarily call money and term deposits). Excluding Bank Treasury products, currency impacts, movement in the
mortgage hedge and a transfer of EUR 2.2 billion of loans to ING Germany as a part of the balance sheet optimisation program,
the net production in customer lending was EUR 2.5 billion. This consisted of EUR
1.3 billion in Wholesale Banking loans, EUR 1.0 billion in residential mortgages and EUR 0.2 billion in consumer lending. Customer
deposits increased by EUR 1.7 billion to EUR 120.9 billion, of which EUR 0.8 billion was in savings and deposits, EUR 0.6 billion
in current accounts and the remainder in Bank Treasury.
Other
Challengers
The
segment Other Challengers covers ING’s banking activities in Australia, France, Italy, Spain and Portugal, as well as the
results of the UK legacy run-off portfolio. The fourth-quarter result before tax increased by EUR 2 million to EUR 125 million
compared with the fourth quarter of 2014. Income rose by EUR 7 million, or 1.9%, mainly due to improved commercial
|
18 | ING Press Release 4Q2015 |
Segment Reporting: Geographical Split Banking
performance
in most of the units, off by the absence of positive one-off (the year-ago quarter included a EUR 17 million gain on the sale
of a white-label mortgage portfolio in Australia). The EUR 25 million increase in expenses was primarily due to investments to
support business growth in most of the units and the strategic focus on growing primary relationships, as well as a EUR 4 million
increase in regulatory expenses. Risk costs declined by EUR 20 million, mainly due to lower risk costs in the Lease run-off portfolio
in Italy. The underlying cost/income ratio was 58.2% versus 52.2% in the fourth quarter of 2014. The underlying return
on equity, based on a 10% common equity Tier 1 ratio, increased to 13.9% in the fourth quarter from 9.3% a year ago.
Total customer lending increased by EUR 4.4 billion in the
fourth quarter to EUR 66.1 billion. Excluding EUR 1.5 billion of currency and other impacts (mainly related to Australian dollar),
the net production in customer lending was EUR 2.9 billion, due to strong growth in Australia and Spain. Customer deposits increased
by EUR 3.1 billion in the fourth quarter. Excluding currency impacts and Bank Treasury, net customer deposits rose by EUR 1.9 billion
due to growth in Spain and Australia.
Growth
Markets
The segment Growth Markets consists of ING’s banking
activities in Poland, Romania and Turkey, as well as the Asian bank stakes. The fourth-quarter underlying result before tax of
this segment remained relatively flat year-on-year at EUR 87 million, as higher income was off by higher expenses and increased
risk costs. Income rose on strong business growth in Poland, Turkey and Romania, while the increase in expenses was mainly a result
of EUR 35 million in higher regulatory expenses, driven by the one-off charge in Poland related to the bankruptcy of SK Bank. The
increase in risk costs was mainly related to Turkey and Poland. The underlying cost/income ratio was 67.0% versus 65.9% in the
fourth quarter of 2014. The underlying return on equity, based on a 10% common equity Tier 1 ratio, decreased to 6.5% in the fourth quarter from
7.9% a year ago.
Total
customer lending increased by EUR 0.8 billion in the fourth quarter of 2015 to EUR 32.5 billion. Excluding currency impacts and
a small increase in Bank Treasury products, net lending grew by EUR 0.1 billion, as increases in Poland and Romania were largely
off by a decline in Turkey. Customer deposits rose by EUR 1.8 billion to EUR 31.7 billion; the net production (adjusted for
currency impacts and Bank Treasury) amounted to EUR 1.6 billion, predominantly fuelled by growth in Poland and Romania. |
|
Wholesale
Banking Rest of World
Wholesale
Banking Rest of World encompasses ING’s activities in the UK, Americas, Asia and other countries in Central and
Eastern Europe. This segment recorded an underlying result before tax of EUR 259 million, up from EUR 179 million in the
fourth quarter of 2014, but down from EUR 293 million in the previous quarter. The result in the current quarter included EUR
27 million of CVA/ DVA impacts compared with EUR -97 million a year ago and EUR -6 million in the third quarter of 2015.
Income excluding CVA/DVA effects decreased 3.4% on the same quarter of 2014 due to losses from the UK Lease run-off
portfolio, which has largely been sold. Compared with the previous quarter, income excluding CVA/DVA impacts fell 7.5%,
partly due to traditionally lower fourth-quarter revenues in Financial Markets and lower income in the lease run- off
portfolio.
Expenses rose 17.7% year-on-year, mainly due to business
growth and the contribution to the new Dutch resolution fund; compared with the previous quarter, expenses increased 22.0%. Risk
costs dropped to EUR 37 million, or 23 basis points of average risk-weighted assets, from EUR 57 million a year ago and EUR 70
million in the third quarter of 2015. The underlying cost/income ratio was 50.3% versus 51.9% in the fourth quarter of 2014. The
underlying return on equity, based on a 10% common equity Tier 1 ratio, was 9.6% in the fourth quarter versus 9.9% a year ago.
Total
customer lending declined by EUR 1.1 billion in the fourth quarter to EUR 56.9 billion. Excluding currency impacts and a
transfer of loans to ING Germany, net customer lending decreased by EUR 0.1 billion, including a EUR 0.4 billion decline due
to the sale of the UK lease run-off portfolio. Customer deposits declined by EUR 4.2 billion to EUR 16.9 billion; the net
production (adjusted for currency impacts and Bank Treasury) was EUR -2.2 billion, mainly due to outflows in corporate
deposits and current accounts.
|
ING Press Release 4Q2015 | 19 |
Segment Reporting: Geographical Split Banking
Other
The segment Other consists of the Corporate Line Banking
and the run-off portfolio of Real Estate. The underlying result before tax was EUR -135 million compared with EUR -106 million
in the fourth quarter of 2014. The loss in the Corporate Line increased to EUR 150 million from EUR 81 million in the fourth quarter
of 2014, whereas the result from the Real Estate run-off portfolio improved to EUR 15 million from a loss of EUR 25 million a year
ago. The latter was mainly caused by improved results on sales.
Customer
deposits increased in the fourth quarter by EUR 1.1 billion to EUR 7.9 billion, and are fully related to the
placement of deposits from ING Group.
|
|
|
20 | ING Press Release 4Q2015 |
Consolidated
Balance Sheet
ING Group: Consolidated balance sheet |
|
|
|
|
|
|
|
|
in EUR million |
31 Dec. 15 |
30 Sep. 15 |
31 Dec. 14 |
|
|
31 Dec. 15 |
30 Sep. 15 |
31 Dec. 14 |
Assets |
|
|
|
Equity |
|
|
|
Cash and balances with central banks |
21,458 |
31,730 |
12,233 |
|
Shareholders' equity1) |
47,832 |
46,022 |
51,344 |
Amounts due from banks |
29,988 |
37,971 |
37,119 |
|
Minority interests |
638 |
619 |
8,072 |
Financial assets at fair value through P&L |
138,048 |
143,316 |
144,099 |
|
Total equity |
48,470 |
46,641 |
59,416 |
- trading assets |
131,467 |
137,090 |
136,959 |
|
Liabilities |
|
|
|
-
non-trading derivatives |
3,347 |
3,507 |
4,384 |
|
Subordinated loans |
7,265 |
7,421 |
6,861 |
- other |
3,234 |
2,719 |
2,756 |
|
Debt securities in issue |
121,289 |
125,472 |
126,352 |
Investments |
94,826 |
94,653 |
97,641 |
|
Other borrowed funds |
9,146 |
9,274 |
11,297 |
-
debt securities available-for-sale |
82,567 |
83,068 |
92,683 |
|
Amounts due to banks |
33,813 |
42,047 |
29,999 |
-
debt securities held -to-maturity |
7,826 |
7,929 |
2,239 |
|
Customer deposits |
500,777 |
502,440 |
483,871 |
- equity securities available-for-sale |
4,433 |
3,656 |
2,718 |
|
- savings accounts |
305,941 |
303,435 |
295,533 |
Loans and advances to customers |
537,343 |
533,475 |
517,478 |
|
-
credit balances on customer accounts |
153,253 |
147,799 |
140,707 |
- customer lending |
533,490 |
529,764 |
512,888 |
|
- corporate deposits |
40,244 |
49,854 |
46,203 |
- securities at amortised cost |
9,625 |
9,573 |
10,579 |
|
- other |
1,339 |
1,352 |
1,428 |
- provision for loan losses |
-5,772 |
-5,862 |
-5,989 |
|
Financial liabilities at fair value through P&L |
105,680 |
112,694 |
116,682 |
Investments in associates and joint ventures |
962 |
953 |
953 |
|
- trading liabilities |
88,807 |
95,903 |
97,091 |
Real estate investments |
77 |
79 |
80 |
|
-
non-trading derivatives |
4,257 |
4,623 |
6,040 |
Property and equipment |
2,027 |
2,007 |
2,100 |
|
- other |
12,616 |
12,168 |
13,551 |
Intangible assets |
1,567 |
1,546 |
1,655 |
|
Other liabilities1) |
15,329 |
16,050 |
16,245 |
Other assets |
13,320 |
14,156 |
13,966 |
|
|
|
|
|
Total assets excl. assets held for sale |
839,616 |
859,886 |
827,324 |
|
Total liabilities excl. liabilities held for sale |
793,299 |
815,398 |
791,308 |
Assets held for sale |
2,153 |
2,153 |
165,532 |
|
Liabilities held for sale |
|
|
142,132 |
|
|
|
|
|
Total liabilities |
793,299 |
815,398 |
933,440 |
Total assets |
841,769 |
862,039 |
992,856 |
|
Total equity and liabilities |
841,769 |
862,039 |
992,856 |
1)
As announced on 11 January 2016, ING implemented an accounting change related to the pre-IPO anchor investments in NN Group
made in 2014. This accounting change is reflected in ING Group’s 2015 full-year reporting and comparative figures. As a
consequence, the previously reported shareholders’ equity as per the end of December 2014 increased by EUR 920 million,
while ‘Other liabilities’ decreased by the same amount.
ING
Group’s total assets decreased by EUR 20.3 billion in the fourth quarter to EUR 841.8 billion, despite EUR 6.1 billion
of positive currency impacts. At comparable currency rates, total assets decreased by EUR 26.4 billion, mainly due to lower
amounts due from (central) banks and lower financial assets at fair value through P&L. The liability side of the
balance sheet decreased via the outflow of CD/ CPs and corporate deposits at Bank Treasury, and reduced placements by banks.
The customer lending and customer deposits profiles improved, as ING saw strong increases in core lending, retail
savings and current accounts. ING Bank’s loan-to-deposit ratio rose to 1.04 from 1.03 at the end of September, mostly
due to the decrease in corporate deposits.
Cash
and balances with central banks
Cash and balances with central banks decreased by EUR
10.3 billion to EUR 21.5 billion, as a result of outflows in corporate deposits and CD/CPs.
Amounts
due from and to banks
Amounts
due from banks decreased by EUR 8.0 billion to EUR 30.0 billion, mainly due to reductions in reverse repos and in unsettled
financial transactions with banks. Amounts due to banks decreased by EUR 8.2 billion to EUR 33.8 billion, due to fewer
placements by banks and a reduction in unsettled financial transactions, mainly mirroring developments on the asset side of
the balance sheet.
|
|
Loans
and advances to customers
Loans
and advances to customers increased to EUR 537.3 billion, but remained approximately flat at comparable currency rates, as the increase
in core lending was off by decreases in non-core lending. Retail Banking grew its core lending assets in residential mortgages
outside the Netherlands, but saw a decline in other lending in the Netherlands and Belgium, whereas Wholesale Banking grew its
longer-tenor Structured Finance and Real Estate Finance assets. Non-core lending declined due to decreases in short-term Bank
Treasury lending, the run-off portfolios and continued transfers of WUB residential mortgages to NN Group.
Financial
assets/liabilities at fair value
Financial assets at fair value through P&L decreased by
EUR 5.3 billion to EUR 138.0 billion, mainly due to declines in trading derivatives and reverse repos. Financial liabilities at
fair value through P&L decreased by EUR 7.0 billion, mirroring the development on the asset side of the balance sheet. Financial
assets and liabilities at fair value consist predominantly of derivatives, securities and repos, which are mainly used to facilitate
the servicing of ING’s clients.
Investments
Investments was slightly up to EUR 94.8 billion, as a
higher valuation of equity securities (the valuation of the stake in Bank of Beijing increased by EUR 0.5 billion) was offset by
a slight decrease in debt securities available for sale.
Assets/liabilities
held for sale
Assets held for sale relate to ING’s remaining stake
in NN Group.
|
ING Press Release 4Q2015 | 21 |
Consolidated
Balance Sheet
ING Group: Change in shareholders’ equity |
|
ING Group |
ING
Bank N.V. |
Holding/Eliminations |
in EUR million |
4Q2015 |
3Q2015 |
4Q2015 |
3Q2015 |
4Q2015 |
3Q2015 |
Shareholders' equity beginning of period |
46,022 |
46,767 |
39,029 |
38,805 |
6,993 |
7,962 |
Net result for the period |
819 |
1,064 |
824 |
1,103 |
-5 |
-39 |
Unrealised revaluations of equity securities |
708 |
-848 |
708 |
-848 |
0 |
0 |
Unrealised revaluations of debt securities |
-94 |
-48 |
-94 |
-48 |
0 |
0 |
Realised gains/losses equity securities released to |
-5 |
70 |
-5 |
70 |
0 |
0 |
P&L |
|
|
|
|
|
|
Realised gains/losses debt securities transferred to |
5 |
-4 |
5 |
-4 |
0 |
0 |
P&L |
|
|
|
|
|
|
Change in cashflow hedge reserve |
38 |
412 |
32 |
404 |
6 |
8 |
Other revaluations |
-99 |
334 |
-99 |
334 |
0 |
0 |
Defined benefit remeasurement |
11 |
39 |
11 |
39 |
0 |
0 |
Exchange rate differences |
429 |
-831 |
429 |
-831 |
0 |
0 |
Changes in treasury shares |
1 |
11 |
0 |
0 |
1 |
11 |
Employee stock options and share plans |
27 |
29 |
16 |
16 |
11 |
13 |
Dividend |
0 |
-929 |
0 |
0 |
0 |
-929 |
Other |
-29 |
-43 |
1 |
-11 |
-29 |
-33 |
Total changes |
1,811 |
-745 |
1,828 |
224 |
-17 |
-970 |
Shareholders' equity end of period |
47,832 |
46,022 |
40,857 |
39,029 |
6,976 |
6,993 |
ING Group: Shareholders’ equity |
|
ING Group |
ING
Bank N.V. |
Holding/Eliminations |
in EUR million |
31 Dec. 15 |
30 Sep. 15 |
31 Dec. 15 |
30 Sep. 15 |
31 Dec. 15 |
30 Sep. 15 |
Share premium/capital |
16,982 |
16,982 |
17,067 |
17,067 |
-85 |
-85 |
Revaluation reserve equity securities |
2,633 |
1,931 |
2,633 |
1,931 |
0 |
0 |
Revaluation reserve debt securities |
1,263 |
1,353 |
1,263 |
1,353 |
0 |
0 |
Revaluation reserve cashflow hedge |
666 |
630 |
675 |
643 |
-9 |
-14 |
Other revaluation reserves |
326 |
289 |
326 |
289 |
0 |
0 |
Defined benefit remeasurement reserve |
-306 |
-316 |
-306 |
-316 |
0 |
0 |
Currency translation reserve |
-538 |
-832 |
-540 |
-834 |
2 |
2 |
Treasury shares |
-18 |
-19 |
0 |
0 |
-18 |
-19 |
Retained earnings and other reserves |
26,824 |
26,004 |
19,738 |
18,896 |
7,086 |
7,109 |
Total |
47,832 |
46,022 |
40,857 |
39,029 |
6,976 |
6,993 |
Debt
securities in issue
Excluding currency impacts, debt securities in issue decreased
by EUR 5.7 billion to EUR 121.3 billion, mainly due to a reduction in CD/CPs. ING Bank issued EUR 4.7 billion of long-term debt,
but this was mostly offset by maturities and redemptions.
Customer
deposits and other funds on deposits
Customer
deposits at ING Group decreased at comparable currency rates by EUR 3.3 billion to EUR 500.8 billion, mainly as a result of
a EUR 9.6 billion decrease in corporate deposits, mainly due to outflows in Bank Treasury and Wholesale Banking
Transaction Services and Financial Markets. The decrease in corporate deposits was partly off by a net increase of EUR 5.0
billion in Retail Banking (excluding Bank Treasury) in both savings and credit balances on customer accounts.
Total
equity
Shareholders’ equity increased in the quarter by
EUR 1.8 billion to EUR 47.8 billion versus EUR 46.0 billion at the end of September. The increase was mainly due to the EUR 0.8
billion net result, the EUR 0.6 billion increase in securities revaluations (largely related to ING’s stake in Bank of Beijing)
and EUR 0.3 billion of positive currency impacts.
|
|
Shareholders’ equity per share increased to EUR
12.36 on 31 December from EUR 11.90 on 30 September.
Annual
development consolidated balance sheet
In
2015, ING Group’s balance sheet decreased by EUR 151 billion, mainly due to the decrease in assets held for sale following
the deconsolidation and further divestment of NN Group in 2015. Excluding assets held for sale and excluding EUR 11 billion of
positive currency impacts, total assets rose only by EUR 1 billion. However, at comparable currency rates, ING Group grew its
core customer lending base by EUR 22 billion. Placements at central banks also increased. Total assets remained almost flat, due
to the offsetting reductions in amounts due from banks, investments, financial assets at fair value through P&L (decreased
valuation of trading derivatives), and a reduction in non-core customer lending. ING Group continued to improve its funding profile
with a EUR 11 billion growth in savings volumes and EUR 12 billion of higher credit balances on customer accounts, excluding currency
impacts. The increase in customer deposits on the liability side was almost fully offset by the decrease in equity as result of
the NN Group divestment and a decline in financial liabilities at fair value through P&L.
|
22 | ING Press Release 4Q2015 |
Risk & Capital Management
ING Group: Loan book 1) |
|
Credit outstandings |
Non-performing loans |
NPL% |
in EUR million |
31/12/2015 |
30/09/2015 |
31/12/2015 |
30/09/2015 |
31/12/2015 |
30/09/2015 |
Residential mortgages Netherlands |
129,253 |
131,124 |
2,461 |
2,840 |
1.9% |
2.2% |
Other lending Netherlands |
36,330 |
36,733 |
2,381 |
2,490 |
6.6% |
6.8% |
of which Business Lending Netherlands |
25,853 |
26,335 |
2,015 |
2,144 |
7.8% |
8.1% |
Residential mortgages Belgium |
33,586 |
33,216 |
1,114 |
1,086 |
3.3% |
3.3% |
Other lending Belgium |
42,312 |
44,458 |
1,526 |
1,445 |
3.6% |
3.3% |
of which Business Lending Belgium |
34,034 |
34,837 |
1,170 |
1,238 |
3.4% |
3.6% |
Retail Benelux |
241,481 |
245,531 |
7,482 |
7,861 |
3.1% |
3.2% |
Residential mortgages Germany |
64,684 |
63,714 |
581 |
594 |
0.9% |
0.9% |
Other lending Germany |
11,402 |
13,455 |
166 |
162 |
1.5% |
1.2% |
Residential mortgages Other C&G Markets |
51,732 |
48,577 |
386 |
378 |
0.7% |
0.8% |
Other lending Other C&G Markets |
23,410 |
23,822 |
780 |
758 |
3.3% |
3.2% |
Retail Challengers & Growth Markets |
151,228 |
149,568 |
1,913 |
1,892 |
1.3% |
1.3% |
Industry lending |
112,746 |
107,252 |
3,257 |
3,393 |
2.9% |
3.2% |
of which: Structured Finance |
85,799 |
80,976 |
1,853 |
1,907 |
2.2% |
2.4% |
of which: Real Estate Finance |
26,700 |
26,002 |
1,279 |
1,362 |
4.8% |
5.2% |
General Lending & Transaction Services |
71,097 |
71,473 |
1,338 |
1,391 |
1.9% |
1.9% |
FM, Bank Treasury, Real Estate & other |
16,874 |
21,082 |
1,039 |
1,081 |
6.2% |
5.1% |
of which General Lease run-off |
3,751 |
4,223 |
1,038 |
1,080 |
27.7% |
25.6% |
Wholesale Banking |
200,717 |
199,807 |
5,634 |
5,865 |
2.8% |
2.9% |
Total loan book |
593,426 |
594,906 |
15,029 |
15,618 |
2.5% |
2.6% |
1) Lending
and money market credit outstandings, including guarantees and letters of credit but excluding undrawn committed exposures (off
balance positions)
ING
Bank’s non-performing loans (NPL) ratio continued to improve, ending at 2.5% for the fourth quarter of 2015 as the
amount of NPLs continues to decrease. ING Group’s fully-loaded common equity Tier 1 ratio improved to 12.7% at the end
of the fourth quarter of 2015, exceeding the current fully-loaded requirement of 12.5% for ING Group.
Credit
risk management
ING Bank’s non-performing loans (NPLs) expressed as
a percentage of lending credit outstandings continued to improve. The NPL ratio decreased in the fourth quarter of 2015 to 2.5%
from 2.6% in the third quarter, mainly driven by a EUR 0.6 billion reduction in NPLs in Retail Netherlands and Wholesale Banking.
|
|
In Retail Netherlands, the NPL ratios improved for both
residential mortgages and other lending. For the Dutch mortgage portfolio, the NPL amount decreased more strongly than the credit
outstandings, resulting in a further decline in the NPL ratio to 1.9% from 2.2% in the previous quarter. The NPL ratio for the
portion of the Dutch mortgage portfolio that is 90+ days overdue decreased to 0.9% from 1.1% in the third quarter. The NPL ratio
for the business lending Netherlands portfolio decreased slightly to 7.8% from 8.1% in the previous quarter, mainly due to a reduction
in NPL amounts.
For Retail Belgium, both the NPL ratio for residential mortgages
as well as the 90+ days overdue ratio remained stable at 3.3% and 1.3%, respectively. Also, within Retail Challengers & Growth
Markets the NPL ratio remained stable at 1.3% as improvements within the residential mortgage portfolios in Germany and Other Challengers
& Growth Markets were offset by a slight deterioration in Other lending.
|
ING Bank: Stock of provisions 1) |
in EUR million |
Retail Benelux |
Retail Challengers &
Growth Markets |
Wholesale Banking |
Total ING Bank
4Q 2015 |
Total ING Bank
3Q 2015 |
Stock of provisions at beginning of period |
2,325 |
1,202 |
2,342 |
5,870 |
5,979 |
Changes in composition of the Bank |
|
|
|
0 |
0 |
Amounts written off |
-271 |
-73 |
-100 |
-444 |
-358 |
Recoveries of amounts written off |
14 |
2 |
12 |
28 |
21 |
Increases in loan loss provisioning |
235 |
111 |
234 |
580 |
568 |
Releases from loan loss provisioning |
-110 |
-31 |
-137 |
-278 |
-307 |
Net additions to loan loss provisions |
125 |
80 |
98 |
302 |
261 |
Exchange or other movements |
7 |
5 |
19 |
31 |
-33 |
Stock of provisions at end of period |
2,199 |
1,216 |
2,371 |
5,786 |
5,870 |
Coverage ratio 4Q 2015 |
29.4% |
63.6% |
42.1% |
38.5% |
|
Coverage ratio 3Q 2015 |
29.6% |
63.6% |
39.9% |
37.6% |
|
1) At the end of December
2015, the stock of provisions included provisions for amounts due from banks: EUR 14 million (September 2015: EUR 8 million) |
ING Press Release 4Q2015 | 23 |
Risk & Capital Management
In Wholesale Banking, the NPL ratio decreased to 2.8% from
2.9% in the third quarter. |
|
ING Bank:
Liquidity buffer
|
This improvement was due to a combination of lending growth and a reduction in non- performing
loans, mainly observable in Structured Finance and Real Estate Finance. For the second consecutive quarter, the NPL ratio in
the Real Estate Finance portfolio declined sharply to 4.8% from 5.2% in the previous quarter, mainly due to the restructuring
of some large files.
| |
in EUR million |
31
Dec. 15
|
30 Sept. 15
|
|
Cash and holdings at central banks 1) |
13,505
|
20,719
|
|
Securities issued or guaranteed |
91,551
|
89,080
|
|
by sovereigns, central banks and |
|
|
|
multilateral development banks |
|
|
|
Liquid assets eligible at central banks |
75,807
|
80,526
|
|
|
(not included in above) |
|
|
At the end of 2015, ING Bank’s stock of provisions stood
at EUR 5.8 billion. During the fourth quarter, it declined by EUR 0.1 billion due to higher amounts written off. ING Bank’s
coverage ratio increased to 38.5% from 37.6%, as the slight decrease in the stock of provisions was more than offset by lower
NPL amounts. The coverage ratio in |
|
Other liquid assets |
1,875
|
271
|
|
Total |
182,738
|
190,596
|
|
|
|
|
1) The cash and holdings at central banks exclude
required reserves at central banks. |
Wholesale Banking increased mainly due to lower NPL amounts, while in Retail Benelux |
|
|
|
|
and Retail
Challengers & Growth Markets the coverage ratio remained almost stable. ING Bank’s loan portfolio consists predominantly
of asset-based and/or well-secured loans, including Structured Finance Real Estate Finance, and residential mortgages. |
|
ING Bank’s total eligible collateral position decreased
in the fourth quarter to EUR 183 billion at current market values compared with EUR 191 billion in the third quarter. This was
mainly due to a decrease in deposits at central banks and liquidity assets eligible at
|
|
|
central banks, partly offset by an increase
in other liquid assets. ING Bank’s |
Securities
portfolio
|
|
loan-to-deposit ratio, excluding securities recorded at amortised cost, increased to 1.04
from 1.03 in the third quarter, mostly due to the decrease in corporate deposits. |
ING Bank’s overall exposure to debt securities decreased in the fourth quarter of 2015 to
|
|
|
EUR 101.9 billion from EUR
102.5 billion in the previous quarter. New investments in |
|
Market
risk
|
high-quality LCR-eligible bonds were more than off by maturities
and sales, notably in government bonds and Central Bank bills. The revaluation reserve of debt securities declined slightly
to EUR 1.3 billion after tax compared with EUR 1.4 billion at the end of the third quarter. |
|
In the fourth quarter of 2015, the average Value-at-Risk
(VaR) increased to EUR 14 million compared with the average of EUR 12 million in the third quarter. This increase was mainly due
to position changes in equity and credit spread. The overnight VaR for ING Bank’s trading portfolio ranged from EUR 11 million
to EUR 17 million.
|
|
|
|
|
|
|
|
ING Bank: Debt securities
1) |
|
ING Wholesale Banking:
Consolidated VaR trading books |
in EUR billion |
31
Dec. 15
|
30 Sept. 15
|
|
in EUR million |
Minimum |
Maximum |
Average
|
Quarter-end
|
Government bonds |
52.5
|
53.3
|
|
Foreign exchange |
1
|
3
|
2
|
1
|
Sub-sovereign, Supranationals and Agencies |
|
|
|
Equities |
5
|
9
|
7
|
6
|
(SSA) |
22.3
|
21.8
|
|
Interest rate |
3
|
7
|
4
|
4
|
Covered bonds |
16.2
|
15.8
|
|
Credit spread |
7
|
10
|
9
|
9
|
Financial institutions bonds |
2.3
|
2.9
|
|
Diversification |
|
|
-7
|
-6
|
Corporate bonds |
2.2 |
2.1
|
|
Total VaR 1) |
11
|
17
|
14
|
14
|
Asset-backed securities (ABS) |
6.4
|
6.5
|
|
|
|
|
Total |
101.9
|
102.5
|
|
1) The total VaR for the columns Minimum and Maximum
cannot be calculated by taking |
|
|
|
|
the sum of the individual components since the observations for
both the individual |
1) Excluding positions at fair value through the P&L
but including securities classified as |
|
markets as well as for total VaR may occur on different dates. |
Loans & Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
and liquidity
|
|
|
|
|
In the fourth quarter, ING Bank issued EUR 4.7 billion of long-term
debt with a remaining tenor of one year or more. Most of it was senior unsecured and covered bond, which was partially offset
by maturities, early repayments and redemptions. Furthermore, the euro weakened against several currencies, causing
an increase in the valuation of long-term debt securities.
|
|
|
|
|
|
24 | ING Press Release 4Q2015 |
Risk & Capital Management
ING Bank: Capital position |
|
2019 rules
(fully-loaded)
|
2015 rules
(phased-in)
|
|
31 Dec. 15 |
30 Sept. 15 |
31 Dec. 15 |
30 Sept. 15 |
Shareholders' equity (parent)
Regulatory adjustments |
40,857
-4,022 |
39,029
-4,043 |
40,857
-4,103 |
39,029
-3,698 |
Available common equity Tier 1 capital |
36,834 |
34,986 |
36,753 |
35,331 |
Subordinated loans qualifying as Tier 1 capital 1)
Regulatory adjustments additional Tier 1 2) |
7,248
0 |
7,403
0 |
7,248
-1,281 |
7,403
-1,280 |
Available Tier 1 capital |
44,083 |
42,389 |
42,721 |
41,455 |
Supplementary capital - Tier 2 bonds 3) |
8,570 |
8,636 |
8,570 |
8,636 |
Regulatory adjustments Tier 2 |
102 |
298 |
-239 |
-54 |
Available BIS capital |
52,754 |
51,323 |
51,052 |
50,036 |
Risk-weighted assets |
318,202 |
310,273 |
318,202 |
310,273 |
Common equity Tier 1 ratio |
11.6% |
11.3% |
11.6% |
11.4% |
Tier 1 ratio |
13.9% |
13.7% |
13.4% |
13.4% |
Total capital ratio |
16.6% |
16.5% |
16.0% |
16.1% |
1)
Including EUR 3,531 million is CRR/CRD IV-compliant and EUR 3,718 million to be replaced, as capital recognition is subject to
CRR/CRD IV grandfathering rules.
2)
Such as goodwill and intangibles
3)
Including EUR 6,229 million is CRR/CRD IV-compliant and EUR 2,341 million to be replaced, as capital recognition is subject to
CRR/CRD IV grandfathering rules.
Capital
ratio ING Bank
ING
Bank further strengthened its capital base this quarter, ending the year 2015 with a fully-loaded common equity Tier 1 ratio
of 11.6%. In the fourth quarter of 2015, common equity Tier 1 capital increased by EUR 1.8 billion to EUR 36.8 billion,
supported by a net profit of EUR 0.8 billion and EUR 0.7 billion from a higher equity revaluation reserve stemming from
increased values for Bank of Beijing and Kotak Mahindra Bank. In addition, the foreign exchange reserve increased by EUR 0.3
billion following a weakening of the euro in the fourth quarter of 2015.
Risk-weighted assets (RWA) increased by EUR 7.9 billion to EUR 318.2
billion, primarily due to higher credit RWA and including a EUR 2.6 billion impact from currency movements. Currency- related
RWA movements are to a large extent off by foreign exchange differences in available capital and therefore had a limited
impact on the common equity Tier 1 ratio.
|
|
by using the IFRS-EU balance sheet, in which notional
cash pooling activities are netted, plus off-balance sheet commitments. The pro-forma leverage ratio of ING Bank,
which takes into account the combined impact of grossing up
the notional cash pool activities and the alignment with the Delegated Act (which was adopted in January 2015) is 4.1%, an increase
of 0.2 percentage point.
Risk-weighted
assets (RWA)
At the
end of December 2015, ING Bank’s total RWA were EUR 7.9 billion higher than at the previous quarter-end. Credit RWA
increased by EUR 8.0 billion to EUR 265.4 billion, including EUR 2.6 billion from currency movements. The remaining increase
of EUR 5.4 billion mainly reflects EUR 2 billion of higher RWA related to equity investments and EUR 3 billion from a
combination of model updates, positive risk migration and some other items. Volume growth only had a marginal impact on
credit RWA. Higher operational RWA were offset by lower market RWA.
|
|
|
|
ING
Bank’s fully-loaded Tier 1 ratio (including grandfathered securities) increased to
|
|
ING Bank: Composition of RWA
|
13.9% at 31 December 2015. The
increase primarily reflects the increase of common equity Tier 1 capital, which was partly offset by the redemption of a USD
0.4 billion legacy Tier 1 instrument in 4Q15. This bond would have lost its recognition as regulatory capital under the
CRR/CRD IV grandfathering rules. The fully-loaded total capital ratio rose to 16.6% at the end of December 2015. |
|
in
EUR billion |
31
Dec. 15
|
30
Sep. 15
|
|
Credit
RWA |
265.4
|
257.4
|
|
Operational
RWA |
43.1
|
42.0
|
|
Market
RWA |
9.6
|
10.9
|
|
Total
RWA |
318.2
|
310.3
|
|
|
|
|
|
ING
Bank’s phased-in (transitional) common equity Tier 1 ratio was 11.6% at the end of |
|
|
|
|
the fourth quarter, up 0.2
percentage point compared with 30 September 2015. Common |
|
Ratings |
equity Tier 1 capital increased by EUR 1.4 billion, largely
mirroring developments in fully–loaded common equity Tier 1 capital. The impact from equity revaluation reserves |
|
During the fourth quarter of 2015, the ratings and outlooks
from S&P, Moody’s and Fitch remained unchanged.
|
was
EUR 0.4 billion lower, reflecting the transitional rules under CRR/CRD IV. |
|
|
|
|
ING Bank’s leverage ratio increased to 4.5%, up from
4.3% in the previous quarter, amply |
|
Main
credit ratings of ING on 3 February 2016 |
meeting our ambitions. The increase reflects higher Tier 1 capital as well as a marginally |
|
|
Standard & Poor’s |
Moody’s
|
Fitch
|
lower total exposure. The leverage exposure is calculated |
|
|
Rating
|
Outlook |
Rating
|
Outlook |
Rating |
Outlook |
|
|
ING
Groep N.V. |
A- |
Stable
|
Baa1
|
Stable
|
A
|
Stable
|
|
|
ING
Bank N.V. |
A
|
Stable
|
A1
|
Stable
|
A
|
Stable
|
|
|
|
|
|
|
ING Press Release 4Q2015 | 25 |
Risk & Capital Management
ING Bank: Capital position |
|
2019 rules
(fully-loaded)
|
2015 rules
(phased-in)
|
|
31 Dec. 15 |
30 Sep. 15 |
31 Dec. 15 |
30 Sep. 15 |
Shareholders' equity (parent) |
47,832 |
46,022 |
47,832 |
46,022 |
-Deductions of significant investments in financial institutions |
-1,389 |
-1,047 |
-558 |
-404 |
-Interim profit not included in CET1 capital 1) |
-1,586 |
-2,202 |
-1,586 |
-2,202 |
-Other regulatory adjustments |
-4,069 |
-4,076 |
-4,134 |
-3,715 |
Regulatory adjustments |
-7,044 |
-7,324 |
-6,278 |
-6,321 |
Available common equity Tier 1 capital |
40,788 |
38,697 |
41,554 |
39,701 |
Additional Tier 1 securities2) |
6,574 |
6,729 |
6,574 |
6,729 |
Regulatory adjustments additional Tier 1 |
0 |
0 |
-1,716 |
-1,569 |
Available Tier 1 capital |
47,362 |
45,426 |
46,412 |
44,830 |
Supplementary capital - Tier 2 bonds 3) |
8,570 |
8,636 |
8,570 |
8,636 |
Regulatory adjustments Tier 2 |
102 |
298 |
-657 |
-358 |
Available BIS capital |
56,034 |
54,359 |
54,325 |
53,108 |
Risk-weighted assets |
321,151 |
313,782 |
321,135 |
313,873 |
Common equity Tier 1 ratio |
12.7% |
12.3% |
12.9% |
12.6% |
Tier 1 ratio |
14.7% |
14.5% |
14.5% |
14.3% |
Total capital ratio |
17.4% |
17.3% |
16.9% |
16.9% |
1)
The interim profit not included in CET1 is the proposed dividend of EUR 1,586 million subject to the approval of the shareholders
at the Annual General meeting in April 2016.
2)
Including EUR 2,061 million is CRR/CRD IV-compliant and EUR 5,187 million to be replaced as capital recognition is subject to
CRR/CRD IV grandfathering rules. These amounts are presented net of positions on-lent to Insurance and Tier 1 capital provided
to NN Group has been deducted.
3)
Including EUR 6,229 million is CRR/CRD IV-compliant and EUR 2,341 million to be replaced as capital recognition is subject to
CRR/CRD IV grandfathering rules.
Capital
ratios ING Group
The
fully-loaded common equity Tier 1 ratio for ING Group increased strongly to 12.7% in the fourth quarter of 2015. Common
equity Tier 1 capital increased by EUR 2.1 billion, driven by a net profit of EUR 0.8 billion in the fourth quarter and the
inclusion in common equity Tier 1 capital of EUR 0.6 billion released from ‘interim profits not included in CET1
capital’. The remaining increase in common equity Tier 1 capital was primarily due to a EUR 0.7 billion increase in
equity revaluation reserves and EUR 0.3 billion from currency movements. The increase in common equity Tier 1 capital was
partly off by a higher deduction for significant investments in financial institutions amounting to EUR 0.3 billion following a
higher market value for Bank of Beijing.
Risk-weighted assets increased by EUR 7.4 billion to EUR
321.2 billion at 31 December 2015, broadly mirroring developments in ING Bank.
ING Group’s fully-loaded Tier 1 ratio (including grandfathered
securities) increased to 14.7%, reflecting the trend in common equity Tier 1 capital, which was partly off by the redemption
of a USD 0.4 billion legacy Tier 1 instrument. The total capital ratio increased to 17.4% from 17.3% in the previous quarter.
ING
Group’s phased-in (transitional) common equity Tier 1 ratio increased from 12.6% at 30 September to 12.9% at 31
December 2015. This is well in excess of the 10.25% common equity Tier 1 requirement for ING Group in 2016. This requirement
is the sum of (i) 9.5% being the ECB’s decision on the 2015 Supervisory Review and Evaluation Process (SREP), including
the capital conservation buffer, and (ii) 0.75% for the Systemic Risk Buffer (SRB) which has been set separately for Dutch
systemic banks by the Dutch Central Bank. The fully- loaded SRB requirement is currently set at 3% for ING Group
|
|
and phases in over four years, with a fi implementation
date of 1 January 2019. With a 12.7% Group CET1 ratio as at 31 December 2015, ING is already in full compliance with the current
fully-loaded requirement of 12.5%. Going forward, we aim to manage ING Group’s common equity Tier 1 ratio above our fully-loaded
requirements and grow into a comfortable buffer over time.
Dividend
The Executive
Board proposes to pay a total dividend of EUR 2,515 million, or EUR 0.65 per (depositary receipt for an) ordinary share, over
the financial year 2015. This is subject to the approval of shareholders at the Annual General Meeting in April 2016. Taking into
account the interim dividend of EUR 0.24 per ordinary share that was paid in August 2015, the financial dividend will amount to EUR 0.41
per ordinary share and be paid in cash. The total amount of EUR 1,586 million is covered by the remaining balance of ‘interim
profits not included in CET1 capital’ at year-end 2015.
ING is committed to maintaining a healthy Group CET1 ratio
in excess of prevailing fully-loaded requirements, currently 12.5%, and to returning capital to our shareholders. ING aims to pay
a progressive dividend over time.
|
26 | ING Press Release 4Q2015 |
Business
& Sustainability Highlights
ING
believes all sustainable progress is driven by people with the imagination and determination to improve their future and the futures
of those around them.
Our
purpose is to empower people to stay a step ahead in life and in business. More than 52,000 employees work each day to earn
the primary relationship with customers, and teams are encouraged to constantly think of better and innovative ways to
service them.
New
innovations in payments
ING is
working to increase our pace of innovation, developing new services and business models. We’re acting to meet
customers’ needs when it comes to making payments, focusing on accessibility and ease-of-use. For example, we launched
Twyp, a peer-to-peer app described as the “Whatsapp of payments”, in Spain in December 2015 and the Netherlands
in January 2016. Twyp, which stands for “the way you pay”, allows consumers to pay small amounts to contacts on
their mobile devices in just a few seconds. More than 200,000 people in Spain have already downloaded the app and registered,
and the number of users in the Netherlands has also been growing steadily in the few weeks since its launch.
ING also
introduced contactless smartphone payments in the Netherlands, making it easier for customers to pay in shops and bars. In
addition, we’ve joined R3 as the only Dutch bank in a consortium of more than 40 leading global banks collaboratively
exploring ways to use blockchain technology in financial markets.
Empowering
people
Innovation
also helps empower people to make better financial decisions. For example, ING Bank Slaski in Poland introduced the new
online banking platform, Moje ING. Based on a similar platform launched earlier in Spain, it gives customers a comprehensive
overview of their finances and an easy-to-use financial planning tool, both with an intuitive and responsive design. In the
Netherlands, ING 360 is a fee-based personalised financial dashboard that gives entrepreneurs insight ‘anytime,
anywhere’ into opportunities to optimise their operations and increase revenue.
ING
is also doing more to understand the behavioural aspects of consumer decision-making. For this, the Think Forward Initiative was
set up with partners Microsoft, EMC and the Institute for New Economic Thinking. The aim is to gather insights and then transform
them into actions that will help people make financial decisions that are better for them, and ultimately better for society.
The initiative will have its first summit on 25 February in Brussels.
|
|
In January 2016, we announced that we will invest in
Hong Kong fintech, WeLab, which provides consumer loans in China and Hong Kong in a fully automated process that takes minutes from
application to approval. ING will also look at the possibilities of starting a partnership with WeLab in ING markets.
Accelerating
sustainable transitions
ING believes that banking plays a significant role in
creating a fairer and greener economy. We approach this by financing projects that accelerate our clients’ transition towards
more sustainable businesses, and supporting clients that develop solutions to broader environmental and social challenges.
ING successfully issued our first-ever green bond in November
2015, raising approximately EUR 1.2 billion and achieving a milestone in our sustainability ambitions. The proceeds will mostly
be used to refinance existing sustainable projects, and at least 20% will go to fund new projects. This highlights our strong commitment
to supporting our clients with lending while stimulating social progress and strong environmental performance.
We
measure our committed financing of sustainable clients as “sustainable transitions financed” (STF) and report on
this twice a year. At 31 December 2015, STF amounted to EUR 23.8 billion, of which EUR 6.3 billion went to financing
sustainable projects and assets and the remainder to companies that are environmental outperformers. This is an increase of
22% compared with the end of 2014, as more sustainable clients were identified after sustainability assessments were better
embedded into core processes.
In November ING announced that we would no longer finance
new coal-fired power plants and new thermal coal mines worldwide, effective immediately. We will also not finance any new clients
whose business is over 50% reliant on operating coal-fired power plants or thermal coal mines. Going forward, we will reduce our
global credit exposure to thermal coal-related businesses.
ING is
serious about combatting climate change. In December, we committed to buying 100% renewable electricity for all ING buildings
worldwide as part of the RE100 initiative, joining other influential global companies. ING has been climate neutral since
2007 by offsetting emissions, and we have targets to reduce our CO2, waste and water footprint all by 20% by 2020.
|
Strengthening lending capabilities |
|
Overview
of Sustainable Transitions Financed
|
We’re also looking at fintech innovations to help
strengthen our lending capabilities and better serve our consumer and SME (small and medium-sized enterprises) clients. In Belgium
and Luxembourg, we’re helping small business owners gain easy access to crowdfunding via fintechs Seedrs and KissKissBankBank.
Meanwhile, our partnership with Kabbage in Spain has started to provide small companies with loan offers much faster. |
|
In
EUR million |
2015
|
2014
|
|
ING
Groenbank 1) |
875
|
836
|
|
Loans
to renewable energy projects 2) |
3,187
|
1,730
|
|
Loans
to sustainable real estate 3) |
998
|
389
|
|
Loans
to other projects 4) |
1,274
|
379
|
|
Loans
to environmental outperformers 5) |
17,470
|
16,142
|
|
|
Total |
23,804
|
19,476
|
|
|
|
|
|
|
|
1)
ING Groenbank finances projects within and outside of the Netherlands
2) Includes biomass, geothermal,
hydro, solar, offshore and onshore wind power generation
3) As of year-end 2015, ING reports
separately on sustainable real estate, which used to be reported under Loans to other projects
4) Includes projects involving energy
efficiency, greenhouse gas reduction, climate change and mitigation, waste-to-energy, public transport, waste reduction, social
welfare
5) As
of year-end 2014, ING reports this amount to clients who have been identified as environmental outperformers based on an independent
reputable data provider or internal client assessments
|
|
|
|
|
|
|
|
|
|
ING Press Release 4Q2015 | 27 |
Appendix
Consolidated
profit and loss account ING Group
ING Group: Consolidated profit and loss account |
|
Total
ING Group |
of which:
Retail Banking |
of which:
Wholesale Banking |
of which:
Corporate Line Banking |
In EUR million |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
Interest result Banking operations |
3,172 |
3,208 |
2,279 |
2,329 |
915 |
923 |
-22 |
-45 |
Commission income |
607 |
556 |
356 |
313 |
252 |
244 |
-0 |
-1 |
Investment income |
-1 |
25 |
5 |
10 |
-8 |
16 |
1 |
-0 |
Other income |
265 |
-34 |
154 |
49 |
145 |
-31 |
-34 |
-52 |
Total underlying income |
4,043 |
3,756 |
2,793 |
2,701 |
1,304 |
1,153 |
-55 |
-98 |
Expenses excl. regulatory costs |
2,259 |
2,390 |
1,544 |
1,795 |
656 |
639 |
60 |
-44 |
Regulatory costs |
279 |
182 |
144 |
88 |
101 |
66 |
35 |
27 |
Operating expenses |
2,539 |
2,572 |
1,687 |
1,884 |
757 |
705 |
95 |
-17 |
Gross result |
1,504 |
1,183 |
1,106 |
817 |
547 |
447 |
-150 |
-81 |
Addition to loan loss provisions |
302 |
400 |
204 |
247 |
97 |
152 |
0 |
- |
Underlying result before tax Banking |
1,202 |
783 |
902 |
569 |
450 |
295 |
-150 |
-81 |
Taxation |
367 |
215 |
281 |
155 |
143 |
90 |
-57 |
-29 |
Minority interests |
12 |
20 |
8 |
15 |
4 |
5 |
- |
- |
Underlying net result Banking |
822 |
548 |
612 |
399 |
303 |
200 |
-93 |
-51 |
Net gains/losses on divestments |
- |
- |
- |
- |
- |
- |
- |
- |
Net result from divested units |
- |
- |
- |
- |
- |
- |
- |
- |
Special items after tax |
-16 |
-18 |
-16 |
-18 |
- |
- |
- |
- |
Net result Banking |
807 |
530 |
597 |
381 |
303 |
200 |
-93 |
-51 |
Net result Insurance Other |
12 |
14 |
|
|
|
|
|
|
Net result intercompany elimination between ING |
|
-12 |
Bank and NN Group |
|
|
Net result from discontinued operations NN Group |
- |
226 |
Net result from discontinued operations Voya |
418 |
Financial |
Net result ING Group |
819 |
1,176 |
|
|
|
|
|
|
ING Group: Consolidated profit and loss account |
|
Total
ING Group |
of which:
Retail Banking |
of which:
Wholesale Banking |
of which:
Corporate Line Banking |
In EUR million |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
Interest result Banking operations |
12,590 |
12,376 |
9,177 |
9,082 |
3,567 |
3,534 |
-153 |
-240 |
Commission income |
2,320 |
2,290 |
1,360 |
1,312 |
964 |
980 |
-4 |
-2 |
Investment income |
129 |
206 |
153 |
120 |
-25 |
78 |
2 |
8 |
Other income |
1,513 |
424 |
538 |
385 |
1,104 |
300 |
-129 |
-261 |
Total underlying income |
16,552 |
15,296 |
11,228 |
10,898 |
5,609 |
4,893 |
-285 |
-496 |
Expenses excl. regulatory costs |
8,626 |
8,571 |
5,987 |
6,171 |
2,429 |
2,311 |
210 |
88 |
Regulatory costs |
620 |
408 |
443 |
285 |
142 |
96 |
35 |
27 |
Operating expenses |
9,246 |
8,979 |
6,430 |
6,456 |
2,571 |
2,407 |
245 |
116 |
Gross result |
7,306 |
6,317 |
4,798 |
4,442 |
3,038 |
2,487 |
-529 |
-611 |
Addition to loan loss provisions |
1,347 |
1,594 |
870 |
1,093 |
478 |
500 |
0 |
- |
Underlying result before tax Banking |
5,959 |
4,724 |
3,928 |
3,349 |
2,560 |
1,986 |
-530 |
-611 |
Taxation |
1,668 |
1,221 |
1,117 |
868 |
676 |
470 |
-125 |
-117 |
Minority interests |
72 |
79 |
56 |
54 |
16 |
26 |
- |
- |
Underlying net result Banking |
4,219 |
3,424 |
2,755 |
2,427 |
1,868 |
1,491 |
-404 |
-494 |
Net gains/losses on divestments |
367 |
202 |
367 |
202 |
- |
- |
- |
- |
Net result from divested units |
- |
- |
- |
- |
- |
- |
- |
- |
Special items after tax |
-58 |
-1,021 |
-58 |
-63 |
- |
- |
- |
-957 |
Net result Banking |
4,528 |
2,606 |
3,064 |
2,566 |
1,868 |
1,491 |
-404 |
-1,451 |
Net result Insurance Other |
-42 |
107 |
|
|
|
|
|
|
Net result intercompany elimination between ING |
-20 |
-55 |
Bank and NN Group |
|
|
Net result from discontinued operations NN Group |
-779 |
65 |
Net result from discontinued operations Voya |
323 |
-1,471 |
Financial |
Net result ING Group |
4,010 |
1,251 |
|
|
|
|
|
|
28 | ING Press Release 4Q2015 |
Appendix
Consolidated
profit and loss account ING Group
Geographical
split: Consolidated profit and loss account |
|
Total
ING Group |
Netherlands |
Belgium |
Germany |
Other
Challengers |
Growth
Markets |
Wholesale
Banking
Rest of World
|
Other |
In
EUR million |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
Interest result Banking operations |
3,172 |
3,208 |
1,151 |
1,168 |
563 |
647 |
489 |
417 |
305 |
311 |
289 |
271 |
397 |
438 |
-22 |
-44 |
Commission income |
607 |
556 |
198 |
187 |
124 |
107 |
73 |
54 |
38 |
24 |
69 |
74 |
106 |
113 |
-0 |
-1 |
Investment income |
-1 |
25 |
2 |
-7 |
1 |
22 |
3 |
0 |
-0 |
1 |
0 |
3 |
-3 |
7 |
-3 |
-0 |
Other income |
265 |
-34 |
10 |
64 |
49 |
-25 |
18 |
-17 |
26 |
26 |
77 |
46 |
95 |
-68 |
-10 |
-61 |
Total underlying
income |
4,043 |
3,756 |
1,361 |
1,411 |
736 |
751 |
583 |
453 |
369 |
362 |
435 |
394 |
594 |
490 |
-36 |
-107 |
Expenses excl. regulatory costs |
2,259 |
2,390 |
837 |
1,129 |
437 |
438 |
217 |
197 |
203 |
181 |
243 |
247 |
258 |
227 |
64 |
-28 |
Regulatory costs |
279 |
182 |
130 |
49 |
1 |
35 |
14 |
22 |
12 |
8 |
48 |
13 |
41 |
28 |
35 |
27 |
Operating expenses |
2,539 |
2,572 |
967 |
1,178 |
438 |
473 |
230 |
219 |
214 |
189 |
291 |
260 |
299 |
254 |
99 |
-1 |
Gross result |
1,504 |
1,183 |
394 |
233 |
298 |
278 |
353 |
234 |
154 |
173 |
144 |
135 |
295 |
236 |
-135 |
-106 |
Addition to loan
loss provisions |
302 |
400 |
107 |
224 |
64 |
16 |
7 |
8 |
30 |
50 |
56 |
46 |
37 |
57 |
0 |
- |
Underlying
result before tax Banking |
1,202 |
783 |
287 |
10 |
234 |
263 |
345 |
226 |
125 |
123 |
87 |
89 |
259 |
179 |
-135 |
-106 |
Retail Banking |
902 |
569 |
301 |
-20 |
207 |
240 |
288 |
198 |
61 |
89 |
44 |
62 |
- |
- |
- |
- |
Wholesale Banking |
450 |
295 |
-14 |
30 |
26 |
23 |
57 |
28 |
63 |
34 |
43 |
26 |
259 |
179 |
15 |
-25 |
Corporate Line |
-150 |
-81 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
-150 |
-81 |
Underlying
result before tax |
1,202 |
783 |
287 |
10 |
234 |
263 |
345 |
226 |
125 |
123 |
87 |
89 |
259 |
179 |
-135 |
-106 |
Taxation |
367 |
215 |
87 |
7 |
89 |
60 |
109 |
68 |
32 |
64 |
15 |
18 |
106 |
36 |
-70 |
-38 |
Minority interests |
12 |
20 |
- |
- |
1 |
5 |
0 |
0 |
- |
- |
11 |
14 |
- |
- |
- |
- |
Underlying
net result Banking |
822 |
548 |
200 |
3 |
145 |
198 |
236 |
157 |
93 |
59 |
61 |
57 |
152 |
143 |
-65 |
-68 |
Net gains/losses on divestments |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Net result from divested units |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Special items
after tax |
-16 |
-18 |
-16 |
-18 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Net result
Banking |
807 |
530 |
185 |
-16 |
145 |
198 |
236 |
157 |
93 |
59 |
61 |
57 |
152 |
143 |
-65 |
-68 |
Net result Insurance Other |
12 |
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result intercompany elimination between ING
Bank and NN Group |
|
-12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result from discontinued operations NN Group |
- |
226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result from
discontinued operations Voya Financial |
|
418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result
ING Group |
819 |
1,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ING Press Release 4Q2015 | 29 |
Appendix
Consolidated
profit and loss account ING Group
Geographical
split: Consolidated profit and loss account |
|
Total
ING Group |
Netherlands |
Belgium |
Germany |
Other
Challengers |
Growth
Markets |
Wholesale
Banking
Rest
of World
|
Other |
In
EUR million |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
4Q2015 |
4Q2014 |
In EUR million |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
FY2015 |
FY2014 |
Interest result Banking operations |
12,590 |
12,376 |
4,677 |
4,699 |
2,287 |
2,447 |
1,812 |
1,616 |
1,219 |
1,158 |
1,147 |
1,072 |
1,600 |
1,625 |
-153 |
-241 |
Commission income |
2,320 |
2,290 |
754 |
730 |
497 |
464 |
215 |
171 |
149 |
147 |
267 |
333 |
442 |
447 |
-4 |
-1 |
Investment income |
129 |
206 |
-77 |
17 |
18 |
130 |
70 |
1 |
14 |
2 |
57 |
30 |
17 |
22 |
30 |
4 |
Other income |
1,513 |
424 |
264 |
147 |
416 |
157 |
50 |
-18 |
-9 |
42 |
273 |
236 |
583 |
101 |
-63 |
-241 |
Total underlying income |
16,552 |
15,296 |
5,619 |
5,593 |
3,217 |
3,198 |
2,146 |
1,770 |
1,373 |
1,349 |
1,743 |
1,671 |
2,643 |
2,194 |
-189 |
-479 |
Expenses excl. regulatory costs |
8,626 |
8,571 |
3,091 |
3,354 |
1,745 |
1,767 |
813 |
758 |
787 |
710 |
973 |
982 |
990 |
866 |
227 |
134 |
Regulatory costs |
620 |
408 |
130 |
49 |
199 |
165 |
103 |
78 |
18 |
13 |
88 |
36 |
47 |
39 |
35 |
27 |
Operating expenses |
9,246 |
8,979 |
3,220 |
3,403 |
1,943 |
1,931 |
917 |
837 |
805 |
723 |
1,061 |
1,018 |
1,038 |
905 |
262 |
161 |
Gross result |
7,306 |
6,317 |
2,399 |
2,189 |
1,274 |
1,267 |
1,229 |
934 |
568 |
626 |
683 |
653 |
1,605 |
1,289 |
-451 |
-641 |
Addition to loan loss provisions |
1,347 |
1,594 |
654 |
947 |
166 |
146 |
77 |
67 |
98 |
185 |
176 |
125 |
175 |
123 |
0 |
- |
Underlying result before tax
Banking |
5,959 |
4,724 |
1,744 |
1,243 |
1,108 |
1,120 |
1,152 |
866 |
469 |
441 |
506 |
528 |
1,430 |
1,166 |
-451 |
-641 |
Retail Banking |
3,928 |
3,349 |
1,495 |
938 |
845 |
951 |
1,012 |
771 |
239 |
304 |
338 |
386 |
- |
- |
- |
- |
Wholesale Banking |
2,560 |
1,986 |
249 |
305 |
263 |
170 |
141 |
96 |
230 |
136 |
169 |
142 |
1,430 |
1,166 |
78 |
-29 |
Corporate Line |
-530 |
-611 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
-530 |
-611 |
Underlying result before tax |
5,959 |
4,724 |
1,744 |
1,243 |
1,108 |
1,120 |
1,152 |
866 |
469 |
441 |
506 |
528 |
1,430 |
1,166 |
-451 |
-641 |
Taxation |
1,668 |
1,221 |
469 |
308 |
315 |
277 |
382 |
266 |
166 |
131 |
79 |
96 |
374 |
275 |
-117 |
-133 |
Minority interests |
72 |
79 |
- |
- |
6 |
2 |
2 |
1 |
- |
- |
64 |
77 |
- |
- |
- |
0 |
Underlying net result Banking |
4,219 |
3,424 |
1,276 |
935 |
787 |
841 |
768 |
599 |
303 |
310 |
363 |
356 |
1,056 |
891 |
-334 |
-508 |
Net gains/losses on divestments |
367 |
202 |
- |
- |
- |
- |
- |
- |
- |
-2 |
367 |
204 |
- |
- |
- |
- |
Net result from divested units |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Special items after tax |
-58 |
-1,021 |
-58 |
-63 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
-957 |
Net result Banking |
4,528 |
2,606 |
1,218 |
872 |
787 |
841 |
768 |
599 |
303 |
308 |
730 |
560 |
1,056 |
891 |
-334 |
-1,465 |
Net result Insurance Other |
-42 |
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result intercompany elimination between ING Bank and NN Group |
-20 |
-55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result from discontinued operations NN Group |
-779 |
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result from discontinued operations
Voya Financial |
323 |
-1,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net result ING Group |
4,010 |
1,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 | ING Press Release 4Q2015 |
ING
profile
ING is
a global financial institution with a strong European base, offering banking services through its operating company ING Bank
and holding a significant stake in the listed insurer NN Group NV. The purpose of ING Bank is empowering people to stay a
step ahead in life and in business. ING Bank’s more than 52,000 employees offer retail and wholesale banking services
to customers in over 40 countries.
ING Group shares are listed (in the form of depositary receipts)
on the exchanges of Amsterdam (INGA NA, ING.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).
Sustainability forms an integral part of ING’s corporate
strategy, which is evidenced by ING Group shares being included in the FTSE4Good index and in the Dow Jones Sustainability Index
(Europe and World). where ING is among the leaders in the Banks industry group.
|
|
Further
information
All publications related to ING’s 4Q15 results
can be found at www.ing.com/4q15, including a video interview with Ralph Hamers, which is also available on YouTube.
Additional
financial information is available at www.ing.com/qr:
•
ING Group historical trend data
•
ING Group analyst presentation (also available via SlideShare)
See also ing.world, ING Group’s online magazine, which
can be found in the About Us section on www.ing.com.
Frequent news updates on ING can be found in the Newsroom
or via the @ING_news twitter feed. Photos of ING operations, buildings and its executives are available for download at Flickr.
Footage
(B-roll) of ING is available via videobankonline.com, or can be requested by emailing info@videobankonline.com. ING
presentations are available at SlideShare.
|
|
|
|
|
|
|
|
|
|
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, the same accounting principles are applied as in the 2014 ING Group
Annual Accounts. The Financial statements for 2015 are in progress and may be subject to adjustments from subsequent events.
All figures in this document are unaudited. Small differences are possible in the tables due to rounding.
Actual
results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in
general economic conditions, in particular economic conditions in ING’s core markets, (2) changes in performance of
financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro, (4)
ING’s implementation of the restructuring plan as agreed with the European Commission, (5) changes in the availability
of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit markets
generally, including changes in borrower and counterparty creditworthiness, (6) changes affecting interest rate levels, (7)
changes affecting currency exchange rates, (8) changes in investor and customer behaviour, (9) changes in general competitive
factors, (10) changes in laws and regulations, (11) changes in the policies of governments and/or regulatory authorities,
(12) conclusions with regard to purchase accounting assumptions and methodologies, (13)
|
|
changes in ownership that could affect the future availability
to us of net operating loss, net capital and built-in loss carry forwards, (14) changes in credit ratings, (15) ING’s ability
to achieve projected operational synergies and (16) the other risks and uncertainties detailed in the Risk Factors section contained
in the most recent annual report of ING Groep N.V. Any forward-looking statements made by or on behalf of ING speak only as of
the date they are made, and, ING assumes no obligation to publicly update or revise any forward-looking statements, whether as
a result of new information or for any other reason.
This
document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States
or any other jurisdiction. The securities of NN Group have not been and will not be registered under the U.S. Securities Act
of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent
registration or an applicable exemption from the registration requirements of the Securities Act.
|
ING Press Release 4Q2015 | 31 |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
ING Groep N.V. |
|
|
|
(Registrant) |
|
|
|
|
|
|
By: |
/s/ P. Jong |
|
|
|
P. Jong |
|
|
|
Global Head of Communications |
|
|
|
|
|
|
By: |
/s/ C. Blokbergen |
|
|
|
C. Blokbergen |
|
|
|
Head Legal Department |
|
Dated: 4 February,
2016
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