ING Investor Relations

6 May 2022

Key points

  • ▪ Pre-provision profit was strong, supported by resilient NII, with the pressure on liability income turning into a tailwind, strong fees and lower expenses

  • ▪ We continue our support for the green transition, as evidenced by growth of our renewable energy financing and an increasing number of clients supported in their transitions

  • ▪ Digital capabilities were added in our strive to offer a superior customer experience

  • ▪ Loan growth in Retail was €5.6 bln, mainly driven by mortgages, while in Wholesale Banking loan growth was €-5.2 bln, including repayments of short-term facilities in Financial Markets. Net core deposits growth was €-0.7 bln

  • ▪ Strong fee growth continued with 9.3% growth YoY, supported by our actions on daily banking in Retail and syndicated deal activity in WB, while investment product fees remained at a consistent high level

  • ▪ Our cost focus continued with lower expenses in 1Q2022, despite salary increases driven by CLAs and indexation

  • ▪ Elevated risk costs at €987 mln, or 62 bps of average customer lending. This was mainly driven by Stage 2 provisioning for Russia-related exposure, which we have reduced over the past months. Stage 3 provisioning was limited with a lower Stage 3 ratio at 1.4%. We are confident on the quality of our loan book and will continue to manage this in line with our proven risk management framework

  • ▪ 1Q2022 CET1 ratio decreased to 14.9%, driven by higher RWA including higher risk weights, as we downgraded ratings of Russia-related exposure and the announced risk-weight floor on Dutch mortgages. We will pay a final cash dividend of €0.41 per share and make a €1.25 bln additional distribution

Strong pre-provision profit

Pre-provision result excl. volatile items* and regulatory costs (in € mln)

2,335

1Q2021

2Q2021

3Q2021

4Q2021

* As included in volatile items on slide 40 ** TMBThanachart Bank (associated company 23% owned by ING)

  • ▪ 1Q2022 pre-provision result excluding volatile items and regulatory costs increased both YoY and QoQ

  • ▪ NII (excl. TLTRO III) was resilient, reflecting also the effect of rising interest rates

    • ▪ With an improving yield curve, the pressure on liability NII is turning into a tailwind

    • ▪ Where applicable, negative interest rate charging remained in place in eurozone countries, while in non-eurozone countries we benefited from rising central bank rates

    • ▪ Non-liability NII was affected as client rates generally track funding costs with a delay, while higher rates reduce the level of prepayment penalty income on mortgages

  • ▪ The share of fee income increased to ~20%. We consider this higher fee level mostly structural, with room for further growth in line with our 5-10% growth ambition

  • ▪ Good cost control, with cost savings absorbing increases related to CLAs and inflation

    1Q2022

  • ▪ Volatile items this quarter included a €150 mln impairment on TTB**

Financing the green transition

  • ▪ We see the green transition as both a necessity and a growth opportunity, as also reflected in our financing of renewable power generation*

  • ▪ Our renewables book doubled since 2016 to €7.3 bln in 2021, to 60% of our total power generation book

  • ▪ To further support the shift to renewables, we aim to grow annual new financing of renewable energy with 50% by 2025

  • ▪ We further commit to not finance new oil & gas fields

  • ▪ In support of the green transition in Retail Banking, we have introduced a green residential mortgage in the Netherlands

  • ▪ In Wholesale Banking we supported an increasing number of clients in their transition to a low carbon business model, with 77 sustainability deals in 1Q2022

  • ▪ This included the first sustainability-linked bond deal for Vodafone Ziggo, while two previous ING deals have won awards at the Environmental Finance Awards

Power generation book (in € bln)

9.0 3.6

2.9

12.2

7.3

2.0 2016

0.00.6

3.3

0.0 0.1

1.5 2021

RenewablesDUCs**GasCoalOil

* From renewable energy sources, including wind and solar ** Diversified Utility Company

€2.1 bln debut sustainability-linked bond for Vodafone Ziggo

Sustainability-linked loan of the year $3.25 bln deal with CEMEXAsset-backed/based green bond of the year $1.35 bln deal with Aligned

We further improved our most used and efficient channel

Mobile-only active customers (in mln)*

2017 2018 2019 2020% of total active customers

2021

% mobile in interactions with ING

1Q2022

2017 3.0

2018 3.7

2019 4.5

2020 5.3

Number of total interactions with ING (in bln)

2021 6.9

1Q2022 1.8

* Definition: Retail customers who used the mobile channel at least once in the last quarter

  • ▪ To further improve our customer experience and drive value, we introduced several new digital propositions in 1Q2022

    • ▪ In Spain, instant lending was launched for new clients, with pricing and risk profile based on analysis of the applicant's data

    • ▪ In Belgium, we launched Self Invest via mobile, expanding online trading possibilities for our customers

    • ▪ In Poland, we introduced our own 'point of sale' app which turns a smartphone into a mobile card terminal

  • ▪ Our focus on customer experience is recognised

    • ▪ In Germany, we were named 'most preferred bank' and 'online broker of the year' in a survey by Euro magazine

    • ▪ In Poland, we were named 'Institution of the Year' by mojebankowanie.pl, as well as 'Best Bank in Poland', 'Best Mobile App', 'Best Online Banking' and 'Best Mortgage Service'

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ING Groep NV published this content on 03 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 May 2022 02:52:06 UTC.