ING update on Bank strategy at Investor Day
(Thomson Reuters ONE) -
* Priorities for 2012 and 2013: repayment Dutch State, completion EC
Restructuring and fulfilment of Basel III requirements while achieving a
minimum core Tier 1 ratio of 10% at the end of this period
* Long term ambitions 2015: superior customer centricity, balance sheet
optimisation and operational excellence resulting in ROE of 10 -13% under
Basel III
* ING Bank: a strong European bank with potential to grow, without growing the
balance sheet
'Building the bank of the future' is the main theme for the ING Investor Day
during which Jan Hommen, CEO of ING Group will lay out the strategy of ING Bank
for the coming years. "ING is relatively well positioned to adapt to the
challenges the banking industry is currently facing. The divestments we
announced last year, together with the liability management exercise we just
completed, have strengthened our capital position," Jan Hommen said. "In order
to improve further we will increase focus on customer centricity, work towards
operational excellence and optimise our balance sheet."
For the next two years, ING will focus on repaying the Dutch State, completing
the EC Restructuring and fulfilling increasing capital requirements known as
Basel III. "We aim to repay the remaining core Tier 1 securities as soon as
possible, however given the ongoing crisis in the eurozone and increasing
regulatory capital requirements, we need to take a cautious approach and pay
special attention to liquidity, funding and capital. In 2011, market
circumstances became increasingly difficult and volatile and we expect that to
remain the case in the near future," said Jan Hommen. From 2013 onwards, ING
aims to maintain a minimum core Tier 1 ratio of 10%. ING intends to resume
dividend payments on common shares when all remaining core Tier 1 securities
have been repaid to the Dutch State and Basel III requirements have been met.
After State repayment and completion of the EC restructuring requirements ING
will enter into a next phase. The European banking landscape has changed:
households and governments need to reduce debt and banks are faced with more
customer scrutiny and increasing demands for transparency. "While various
regulatory changes are limiting banks to grow and both economic and societal
trends are putting pressure on margins, we believe ING meets the criteria to
succeed in this environment. We have strong funding capabilities and attractive
home market positions in Northern Europe. Our experience in lean and competitive
markets has made us leaders in innovative distribution at low costs. This puts
us in a good position as customers want simple, transparent and fairly priced
products."
"Because customer centricity remains crucial to all we do, we are converging our
retail banking business models in terms of product offerings and distribution
channels. Operational excellence is crucial for meeting the demands of
customers, especially when regulatory costs and bank taxes drive overall costs
higher. "We need to move beyond simple cost cuts and focus on achieving true
operational excellence, helping our customers obtain simple products through
convenient and safe multi-channel access while at the same time streamlining our
organisation and systems," Jan Hommen said. These initiatives will offset part
of the increasing regulatory costs and bank taxes, helping ING Bank to reach a
cost-income ratio of 50-53% by 2015. Procurement initiatives are expected to
save EUR 300 million per year by 2015 but further structural efficiency
improvements and IT investments will be needed to reach ING's long term cost-
income ratio target of 50%.
Jan Hommen will explain how optimising the balance sheet will help to maximise
returns and to offset higher capital requirements. "By managing our balance
sheet more efficiently ING will increase returns and grow customer lending
without increasing the balance sheet. By better matching our own originated
loans from the Commercial Bank with deposits gathered in the Retail Bank, we can
eliminate inefficiencies on our balance sheet, improve the quality of the
overall asset side and produce a better return with a low risk balance sheet."
Jan Hommen will end his presentation by reiterating that by 2015 customer
centricity, operational excellence and balance sheet optimisation should enable
ING to achieve a return on equity under Basel III rules of 10-13%, while
maintaining a minimum core Tier 1 ratio of 10% and a cost/income ratio of
50-53%.
Koos Timmermans, Vice-Chairman of ING Bank, will elaborate at the ING Investor
Day on how Basel III regulation is a catalyst to manage the balance sheet more
efficiently. The negative impact of Basel III by the end of 2013 on ING's core
Tier 1 ratio is expected to be a manageable 80 basis points. He will also give
an update on ING Bank's exposure to Southern European sovereign debt. After
reducing Southern European sovereign debt in the fourth quarter of 2011 by
approximately EUR 1.2 billion, total reduction of Southern European debt in
2011 amounted to around EUR 4 billion, bringing the total remaining positions in
Southern European sovereign debt to around EUR 2 billion.
All presentations at the ING Investor Day are available online (www.ing.com/ir).
The keynote speech by Jan Hommen (starting at 8.30 am) and the plenary speech by
Koos Timmermans (starting at 9.15 am) can be followed live via webcast at
www.ing.com/ir or by dialing in via (+ 31 10)29 44 285, entry code: 4320669192
#.
Press enquiries Investor enquiries
Frans Middendorff ING Group Investor Relations
+31 20 541 6516 +31 20 541 5460
frans.middendorff(at)ing.com Investor.relations(at)ing.com
ING PROFILE
ING is a global financial institution of Dutch origin, offering banking,
investments, life insurance and retirement services to meet the needs of a broad
customer base. Going forward, we will concentrate on our position as an
international retail, direct and commercial bank, while creating an optimal base
for an independent future for our insurance and investment management operations
IMPORTANT LEGAL INFORMATION
Certain of the statements contained herein are not historical facts, including,
without limitation, certain statements made of future expectations and other
forward-looking statements that are based on management's current views and
assumptions and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially from those
expressed or implied in such statements. 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) the implementation of ING's restructuring plan to
separate banking and insurance operations, (4) 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, (5) the frequency and severity of
insured loss events, (6) changes affecting mortality and morbidity levels and
trends, (7) changes affecting persistency levels, (8) changes affecting interest
rate levels, (9) changes affecting currency exchange rates, (10) changes in
customer and policyholder behaviour, (11) changes in general competitive
factors, (12) changes in laws and regulations, (13) changes in the policies of
governments and/or regulatory authorities, (14) conclusions with regard to
purchase accounting assumptions and methodologies, (15) changes in ownership
that could affect the future availability to us of net operating loss, net
capital and built-in loss carry forwards, and (16) ING's ability to achieve
projected operational synergies. 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, and any other document or presentation to
which it refers, do not constitute an offer to sell, or a solicitation of an
offer to buy, any securities.
PDF version of Press Release:
http://hugin.info/130668/R/1577277/491850.pdf
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ING Group via Thomson Reuters ONE
[HUG#1577277]
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