First Quarter 2013 ResultsING posts underlying net profit of EUR 800 mlnJan HommenCEOAmsterdam – 8 May 2013www.ing.com
Key points• ING has demonstrated steady progress on the Group’s restructuring: IPO of our USinsurance business successfull...
ING is maintaining momentum in restructuringFirst Quarter 2013 ResultsMore than EUR 10 bln paid to the Dutch State (in EUR...
Successful launch of ING U.S. IPO19.520.8 20.721.11819202122IPO 2 May 3 May 6 MayFirst Quarter 2013 ResultsShare price of ...
Group holding double leverage will be further reducedFirst Quarter 2013 Results 57.11.5-0.7-2.9-0.5-1.51Q13 ING USIPOUpstr...
Strong capital position Bank after dividend upstream10.4%-0.5%11.9% 12.3%-0.5%11.8%-0.9%4Q12 1Q13 Planned dividendupstream...
IAS 19R increases volatility and pension costsFirst Quarter 2013 Results 74.13.75.55.73456Dec 08 Dec 09 Dec 10 Dec 11 Dec ...
First Quarter 2013 Results 8First quarter 2013 results
Net result ING Group (in EUR mln)Underlying net profit up versus both 1Q12 and 4Q129Divestments, discontinued operations a...
First Quarter 2013 Results 10ING Bank
ING Bank posted recovery versus the fourth quarter11Bank results (in EUR mln)Gross resultAddition toloan loss provisionsUn...
FM contribution to NIM can be volatileFinancial markets impact on NIM Q-on-Q (in bps)1-42-12883861 86982885184585788089789...
Strong funding profile allows Bank to grow loan bookFirst Quarter 2013 Results 135.3-1.811.08.216.51Q12 2Q12 3Q12 4Q12 1Q1...
Operating expenses down vs 4Q, excluding bank taxFirst Quarter 2013 Results 1455.2%50%60%70%80%1Q12 2Q12 3Q12 4Q12 1Q13• E...
Cost-saving programmes on track15• In 3Q11 and 2H12, cost-saving initiatives were announced for Retail NL, ING Belgium and...
Additions to loan loss provisions (bps average RWA)• Net addition to loan loss provisionstotalled EUR 561 mln or 81 bps of...
14842 393532 178233121897967118111103344Q12 1Q13Dutch Mortgages Business Lending NLRetail Belgium Retail InternationalStru...
Risk costs for Business Lending NL down versus 4Q1218Risk costs business lending (in EUR mln) Non-performing loans ratio (...
6%5%6%8%11%12%52%NetherlandsAmericasSpainFranceItalyUKOtherRisk costs on Real Estate Finance remain elevatedFirst Quarter ...
Risk costs (in EUR mln)Non-performing loans ratio (in %)NPL ratio on Dutch mortgages rose slightly to 1.5%8244533744172125...
73%90%200225250 AverageLTVHouse prices*(1,000 EUR)-110-23231186117High LTVs do not reflect additional collateral21-18%• Ho...
Illustration: home affordability in Netherlands*Chart: mortgage costs (after tax) as % of disposableincome based on averag...
First Quarter 2013 Results 23Insurance EurAsia
Sales(APE, in EUR mln)• Sales were flat compared with ayear ago as higher sales in CREwere offset by a decline in theBenel...
Technical margin(in EUR mln)• Technical margin improved versusboth 1Q12 and 4Q12• Technical margin in 1Q12 and4Q12 in Bene...
Life & IM administrative expenses (in EUR mln)145 142 135 1368268 72 63697778 81 85791481Q12 2Q12 3Q12 4Q12 1Q13Benelux CR...
First Quarter 2013 Results 27Insurance ING U.S.
Sales(APE, in EUR mln)• Total sales rose 15.1% year-on-year and 15.7% sequentially, bothexcluding FX, mainly driven byresp...
-384216-348136-3491Q12 2Q12 3Q12 4Q12 1Q13Estimated IFRS earnings sensitivities (in EUR mln)Equity Market Return 1Q13RAT 5...
First Quarter 2013 Results 30Wrap up
Wrap upFirst Quarter 2013 Results 31• ING has demonstrated steady progress on the Group’s restructuring: IPO of our USinsu...
First Quarter 2013 Results 32Appendix
US IPO has aEUR -1.7 bln impact toGroup EquityReduction core debtby EUR 2.1 blnfollowing ING Bankdividend (EUR 1.5 bln)and...
Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.4%CRD IV core Tier 1 ratio• Final form of CRD IV has becomeclearer in 1...
ING Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by theE...
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First Quarter 2013 Results. ING posts underlying net profit of EUR 800 mln

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“ING has demonstrated steady progress so far this year on the Group’s restructuring, culminating with the successful IPO of our US insurance business, which was completed last week. The transaction satisfied our agreement with the European Commission to sell 25% of the US business before the year-end deadline, while raising EUR 0.5 billion of proceeds for the Group,” said Jan Hommen, CEO of ING Group. “With that milestone completed, we are now accelerating preparations for the base case of an IPO of our European insurance company, with the aim of being ready to go to the market in 2014.”

More info in our press release at http://www.ing.com/Our-Company/Press-room/Press-release-archive/PressRelease/ING-records-1Q13-underlying-net-profit-of-EUR-800-million-1.htm

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First Quarter 2013 Results. ING posts underlying net profit of EUR 800 mln

  1. 1. First Quarter 2013 ResultsING posts underlying net profit of EUR 800 mlnJan HommenCEOAmsterdam – 8 May 2013www.ing.com
  2. 2. Key points• ING has demonstrated steady progress on the Group’s restructuring: IPO of our USinsurance business successfully launched• ING Group posts underlying net profit of EUR 800 mln, up vs both 1Q12 and 4Q12• Bank underlying pre-tax result rose to EUR 1,169 mln, supported by improvement in netinterest margin, the impact of cost-saving initiatives and lower risk costs versus 4Q12• Insurance EurAsia underlying pre-tax result rose to EUR 85 mln, reflecting lower impact ofmarket-related items. Operating result declined to EUR 79 mln on lower investment marginand Non-life results• Ongoing business of Insurance US posted a solid quarter with operating result of EUR 152mln. The underlying pre-tax result of Insurance ING U.S. was EUR -192 mln, reflectinghedge losses on Closed Block VA2First Quarter 2013 Results
  3. 3. ING is maintaining momentum in restructuringFirst Quarter 2013 ResultsMore than EUR 10 bln paid to the Dutch State (in EUR mln)10,0007,75010,0007507507502,4063,531375375375October2008Paid todateNovember2013March2014May 2015 TotalpaymentsCore Tier I securities Premium & Coupon payments10,156Delivering on EC restructuring in 2013 Insurance ING U.S. IPO launched Sale of Insurance Hong Kong/Thailand andING Vysya Life closed Sale of part of SulAmerica and KB Lifeannounced• Sales process ING Life Korea and Japanongoing• Aim to have Insurance Europe ready forbase case IPO in 2014Market value of Alt-A above economic break-even price Dutch State2010 20122011 1Q133• Next tranche repayment of core Tier 1securities to Dutch State scheduled forNovember 2013• IABF in the money for the Dutch State sincethe end of 2012Market value Alt-A Break-even price Dutch State66.6%71.0%2009Cut-off90.0%62.8%
  4. 4. Successful launch of ING U.S. IPO19.520.8 20.721.11819202122IPO 2 May 3 May 6 MayFirst Quarter 2013 ResultsShare price of Voya since IPO (USD)Cutting financial ties with ING• Proceeds of primary offering of USD 600 mln will bring the debt to capitalratio of Insurance ING U.S. down to approximately 25%• USD 1.8 bln to be injected into its affiliated offshore reinsurer (SLDI) toallow for cancellation of the USD 1.5 bln Contingent Capital Letter of Creditfrom ING Bank. This will create an RWA relief for the Bank of EUR 2 bln• USD 500 mln of borrowings from ING Insurance will be replaced with newdebt issuance43,814671600Market Cap at IPO USD 5,085 mlnPrimarySecondary75% INGUSD 3.8 bln
  5. 5. Group holding double leverage will be further reducedFirst Quarter 2013 Results 57.11.5-0.7-2.9-0.5-1.51Q13 ING USIPOUpstreamfromBank75% MVUSStake inSulAmPro-formaGroup core debt (double leverage) (EUR bln) ING Insurance debt (EUR bln)• Proceeds US IPO in combination with planned dividendupstream from Bank will reduce double leverage in theGroup from EUR 7.1 bln to EUR 5.1 bln in 2Q.• Current market value of 75% in ING US, as well as thesale of part of ING’s stake in SulAmerica and the marketvalue of the remaining 30% stake would reduce doubleleverage further5.61.5-3.5-0.4-0.21Q13 Sales CMFand KBLifeIC US IC EurAsia Pro-forma• Outstanding debt ING Insurance, net of cash proceedsfrom the sale of Insurance Hong Kong, Macau andThailand, amounted to EUR 5.6 bln at 1Q13• Proceeds CMF and KB Life, as well as replacement ofintercompany (IC) debt by own issuance in US andEurAsia would reduce ING Insurance debt to EUR 1.5 bln• Reduction of leverage increases flexibility as we prepare for the base case of an IPO of Insurance Europe• Target capital and leverage ratios for Insurance Europe stand-alone still need to be determined
  6. 6. Strong capital position Bank after dividend upstream10.4%-0.5%11.9% 12.3%-0.5%11.8%-0.9%4Q12 1Q13 Planned dividendupstream fromBankPro-fomaBasel 2.5Impact CRD IV atimplementationImpact CRD IVphased inPro-forma fully-loaded CRD IV• ING Bank’s core Tier 1 ratio increased from 11.9% to 12.3% supported by strong earnings• This allows the bank to plan a EUR 1.5 bln upstream to the Group in 2Q13 to further reduce Group leverage• Post upstream, the pro-forma core Tier 1 ratio on a fully-loaded CRD IV basis is 10.4%, exceeding the target of ≥10%ING Bank core Tier 1 ratio (in %)6First Quarter 2013 Results
  7. 7. IAS 19R increases volatility and pension costsFirst Quarter 2013 Results 74.13.75.55.73456Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Mar 13Pension impact on operating/administrative expensesEUR mlnRestatement2012FY13E vsFY121Q13 vs1Q12Bank -169 240 59Insurance EurAsia -74 80 21Insurance ING U.S. -2 16 4IAS 19R impact on equity• IAS 19R for ‘Employee Benefits’ came into effect on 1January 2013• Unrealised actuarial gains & losses per 31 Dec 2012were reflected in equity, with an impact of EUR -2.6 bln• This change will increase volatility of equity goingforwardAA bond curve hit low at year-end 2012IAS 19R impact on pension expenses• A high-quality corporate bond rate is now used to setthe assumed return on pension assets (in line with thediscount rate for pension obligations)• This rate is locked in each year based on a corporateAA curve at 31 December• The AA bond curve declined to 3.7% versus 5.5% ayear earlier, leading to an increase in pension costs for2013• The curve has since increased by 40 bps• A 100 bps increase in the AA bond curve would reducepension costs in 2014 by approximately EUR 150 mln• Defined Benefit pension scheme in the Netherlands willbe closed to new entrance from 2014
  8. 8. First Quarter 2013 Results 8First quarter 2013 results
  9. 9. Net result ING Group (in EUR mln)Underlying net profit up versus both 1Q12 and 4Q129Divestments, discontinued operations and special items (after tax, in EUR mln)1Q13Underlying net result Group 800Gains/losses on divestments 940Results from divested units -38Result from discontinued operations 155Special items -53Net result Group 1,804Underlying net result ING Group (in EUR mln)7281,2936581,4811,8041Q12 2Q12 3Q12 4Q12 1Q135791,1098224838001Q12 2Q12 3Q12 4Q12 1Q13First Quarter 2013 Results
  10. 10. First Quarter 2013 Results 10ING Bank
  11. 11. ING Bank posted recovery versus the fourth quarter11Bank results (in EUR mln)Gross resultAddition toloan loss provisionsUnderlying resultbefore tax+1,590 1,5501,6648711,730-439-540 -554 -589 -561=1,1511,0111,1102831,169• Gross result rose strongly to EUR 1,730 mln, including EUR 48 mln of positive CVA/DVA adjustments• Risk costs remained elevated amid the weak economic environment, but improved versus 4Q121Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 4Q12 1Q13 1Q12 2Q12 3Q12 1Q134Q12First Quarter 2013 Results
  12. 12. FM contribution to NIM can be volatileFinancial markets impact on NIM Q-on-Q (in bps)1-42-12883861 8698288518458578808978921Q12 2Q12 3Q12 4Q12 1Q13B/S end of quarter B/S averageNet interest margin increased to 138 bpsFirst Quarter 2013 Results 122,969 2,856 2,972 2,867 2,9161381341351271331Q12 2Q12 3Q12 4Q12 1Q13Net interest result (in EUR mln)ING Bank (based on avg Balance Sheet)Lending (based on avg Client Balances)PCM/Savings&Deposits (based on avg Client Balances)Underlying interest margin by quarter (in bps)• Increase in net interest result versus 4Q12 supported byre-pricing of the loan book and volume growth,especially in Structured Finance, and higher FinancialMarkets results• Savings margins started to stabilise as the impact of thelow investment rate environment was largely offset bythe lowering of client rates4Q12 1Q131Q12 2Q12 3Q13NIM supported by lower average B/S in 1Q13Bank Balance Sheet (in EUR bln)
  13. 13. Strong funding profile allows Bank to grow loan bookFirst Quarter 2013 Results 135.3-1.811.08.216.51Q12 2Q12 3Q12 4Q12 1Q131.63.1 2.71.80.71.2-0.2-5.6-4.21.91Q12 2Q12 3Q12 4Q12 1Q13Residential mortgages Other lendingNet inflow in funds entrusted (in EUR bln) Net loan growth (client balances, in EUR bln)Following balance sheet optimisation in 2012, ING Bank is positioned to selectively grow the loan book• Balance sheet of EUR 851 bln below 2015 ambition level of EUR 870 bln• Net funds entrusted grew by an impressive EUR 16.5 bln in 1Q13, leading to a further improvement of the funding profile• Net loan growth was a moderate EUR 2.5 bln in 1Q13, particularly in Retail Belgium and Structured Finance• Loan-to deposit ratio improved to 1.102.8 2.9-2.9-2.52.5
  14. 14. Operating expenses down vs 4Q, excluding bank taxFirst Quarter 2013 Results 1455.2%50%60%70%80%1Q12 2Q12 3Q12 4Q12 1Q13• Expenses flat versus a year ago, reflecting impact of cost savings initiatives and lower RED impairments, which offsetsignificantly higher pension costs, annual salary increases and higher regulatory expenses• Excluding EUR 59 million higher pension costs, which were largely caused by a decrease of the discount rate, operatingexpenses declined by 2.5% versus 1Q12• Cost/income ratio improved to 55.2% versus target of 50-53% by 20151752,128 2,044 2,1272,1652,1331Q12 2Q12 3Q12 4Q12 4Q13Expenses Dutch bank taxOperating expenses (in EUR mln) Underlying cost/income ratio (in %)
  15. 15. Cost-saving programmes on track15• In 3Q11 and 2H12, cost-saving initiatives were announced for Retail NL, ING Belgium and Commercial Banking to improvefuture performance and reduce annual expenses by a combined EUR 0.8 bln by 2015• Cost savings realised so far are EUR 216 mln, of which EUR 54 mln in 1Q13• Cost savings still to be achieved by 2015 amount to EUR 624 mln for the BankRestructuring programmes (in EUR mln)AnnouncedCostsavingsachievedCostsavingsby 2015TotalcostsavingsTotalFTEreductionBankRetail BankingNL3Q11/4Q12 178 430 450 4,100ING BankBelgium4Q12 9 150 150 1,000CommercialBanking3Q12 29 260 315 1,000TotalBank216 840 915 6,100First Quarter 2013 Results
  16. 16. Additions to loan loss provisions (bps average RWA)• Net addition to loan loss provisionstotalled EUR 561 mln or 81 bps ofaverage RWA in 1Q13• Risk costs declined by EUR 28 mlnversus 4Q12, mainly due toStructured Finance and GeneralLending, partly offset by higher riskcosts for Dutch mortgages• For the coming quarters, risk costsare expected to remain elevated ataround these levels• Through the cycle we expect riskcosts of 40-45 bps of averageRWA168297120105-22-26-35-24104-246073778581Gross additions Releases Net additions1Q131Q12 2Q12 3Q12 4Q12Risk costs remain elevated but improved from 4Q12First Quarter 2013 Results
  17. 17. 14842 393532 178233121897967118111103344Q12 1Q13Dutch Mortgages Business Lending NLRetail Belgium Retail InternationalStructured Finance RE FinanceLease run-off Other RB and CBNPL ratio increased slightly to 2.6%589 561• Risk costs declined by EUR 28 mln versus 4Q12, mainly due to Structured Finance and General Lending, partly offset byhigher risk costs for Dutch mortgages• NPLs increased by EUR 0.3 bln to EUR 15.2 bln, or 2.6% as a percentage of credit outstandings• The NPL ratio for Business Lending NL, Real Estate Finance and Lease run-off remained relatively high in 1Q1317NPL ratio (in %)4Q12 1Q13Retail Banking- Dutch Mortgages 1.4 1.5- Business Lending NL 5.9 6.0- Retail Belgium 3.3 3.2- Retail International 1.4 1.5Commercial Banking- Structured Finance 2.2 2.0- RE Finance 7.5 8.1- Lease run-off 10.7 12.0Other Retail and Commercial Banking- Other 2.4 2.1Total / average 2.5 2.6Underlying additions to loan loss provisions(in EUR mln)First Quarter 2013 Results
  18. 18. Risk costs for Business Lending NL down versus 4Q1218Risk costs business lending (in EUR mln) Non-performing loans ratio (in %)Risk costs down, but expected to remain elevated• Risk costs declined versus 4Q12, which included some large files, so roughly in line with the past quarters• The NPL ratio increased slightly to 6.0%, from 5.9% in 4Q12• The NPL ratio remains relatively high in non-food retail, builders & contractors and transportation & logistics• Coverage ratio increased to 51% in the first quarter• Given the weak economic environment, risk costs are expected to remain elevated121148121100831Q12 2Q12 3Q12 4Q12 1Q13First Quarter 2013 Results6.0456781Q12 2Q12 3Q12 4Q12 1Q13
  19. 19. 6%5%6%8%11%12%52%NetherlandsAmericasSpainFranceItalyUKOtherRisk costs on Real Estate Finance remain elevatedFirst Quarter 2013 Results 19111103102120451Q12 2Q12 3Q12 4Q12 1Q13Risk costs (in EUR mln) Real Estate Finance portfolio by country of residence (13 Mar)Non-performing loans ratio (in %) • Risk costs for Real Estate Finance increased slightly toEUR 111 mln and were concentrated in the Netherlands,Spain and the UK• The NPL ratio increased to 8.1% due to a decline incredits outstanding and slightly higher NPLs• NPLs are concentrated in the Netherlands, Spain and UK• Construction is less than 1% of total REF portfolio• Risk costs in REF are expected to remain elevated ataround these levels given deteriorating Europeancommercial real estate markets6.58.1468101Q12 2Q12 3Q12 4Q12 1Q13REF total REF NL
  20. 20. Risk costs (in EUR mln)Non-performing loans ratio (in %)NPL ratio on Dutch mortgages rose slightly to 1.5%8244533744172125331Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13• Risk costs increased to EUR 82 mln in 1Q13, from EUR 37mln in 1Q12, reflecting recent declines in house prices,rising unemployment levels, and a lower cure rate• The NPL ratio increased marginally• Risk costs have consistently exceed write-offs• Given the continuing weakness in the housing market andthe broader Dutch economy, loan loss provisions on themortgage portfolio are expected to remain at around thislevel for the coming quarters0.91.50.20.61.01.41.84Q10 2Q11 4Q11 2Q12 4Q12NPL Dutch Mortgages 90+ days arrears599112110716782466986100116372008 2009 2010 2011 2012 1Q13Risk costs Write-offsRisk costs versus write-offs (EUR mln)20First Quarter 2013 Results
  21. 21. 73%90%200225250 AverageLTVHouse prices*(1,000 EUR)-110-23231186117High LTVs do not reflect additional collateral21-18%• House prices have declined by 18% since the peak inJune 2008, leading to an average LTV of 90%• Percentage LTV > 100% (excl. NHG), is approximately35% of total portfolio• LTVs do not include additional collateral built viaSavings, Investment or Life Insurance mortgages• 19% of ING’s Dutch mortgage portfolio is covered bythe National Mortgage GuaranteeLTVs have increased as house prices declined Dutch mortgage portfolio by product type (%)22%30%15%12%17%2%2% Interest only (100%)Interest only (mixed)InvestmentLife insuranceSavingsAnnuityOtherSavings & investments outweigh mortgages in NL(% of GDP)**78% of mortgages are accumulating additional coversfor at least partial repaymentFirst Quarter 2013 Results2008 2009 2010 2011 2012 1Q13Pension/Life Insurance assetsValue of homes/landOther assets (cash, savings,investments, etc.)Other debtMortgage debt* NVM; ** CBS
  22. 22. Illustration: home affordability in Netherlands*Chart: mortgage costs (after tax) as % of disposableincome based on average income to buy the averagehouse at prevailing mortgage rates.Tax reform provides clarity but impacts affordability22First Quarter 2013 Results0%10%20%30%1975 1980 1985 1990 1995 2000 2005 2010100% interest-only100% annuity50% interest-only / 50% annuityReform of tax treatment on Dutch mortgages• Recent house price declines have been driven in part byuncertainty about housing market reform• Additional reforms came into effect on 1 January 2013,which include a gradual reduction of tax deductibility forboth existing and new mortgages• Interest on new mortgages is only tax deductible formortgages that fully amortise over 30 years, which willimpact affordability• House prices are already down 18% from the peak andlow interest rates have brought affordability to levels lastseen around 2000• The move to a fully amortising mortgage will furtherimpact affordability by approximately -5%-point, likelyleading to further declines in house prices in 2013• However, clarity about future tax treatment and economicrecovery should help to stabilise the market goingforward• The rental market is also being reformed, allowing rentincreases above inflation for households with abovemedian income, creating an incentive for renters to buy* ING Economics Department
  23. 23. First Quarter 2013 Results 23Insurance EurAsia
  24. 24. Sales(APE, in EUR mln)• Sales were flat compared with ayear ago as higher sales in CREwere offset by a decline in theBenelux• Sales were up 18.2% vs 4Q12,driven by seasonally highercorporate pension renewals in theNetherlandsUnderlying pre-tax result(in EUR mln)• Underlying result up from 1Q12and 4Q12, reflecting lower impactof market-related itemsOperating result(in EUR mln)• Operating result down vs 1Q12and 4Q12 due to decrease ininvestment margin, lower non-liferesults and lower results corporateline• In 1Q13, the corporate lineincluded a non-recurringreinsurance charge of EUR 31 mlnfor ING operational risk• Operating result in 4Q12 includeda EUR 51 mln release from theprofit sharing provision129203115161791Q12 2Q12 3Q12 4Q12 1Q13Insurance EurAsia underlying results improveFirst Quarter 2013 Results 24-43-11010-32851Q12 2Q12 3Q12 4Q12 1Q132331981531982341Q12 2Q12 3Q12 4Q12 1Q13
  25. 25. Technical margin(in EUR mln)• Technical margin improved versusboth 1Q12 and 4Q12• Technical margin in 1Q12 and4Q12 in Benelux was impacted byadditions to guarantee provisions• Technical margin in CRE lower dueto lower surrender results inGreece and HungaryFees and premium based revenues(in EUR mln)• Fees and premium-basedrevenues totaled EUR 379 mln,down 2.3% versus 1Q12 whenincome benefited from non-recurring fees in CRE• Compared with 4Q12, fees andpremium-based revenues rose7.1% as annual premiums oncorporate pensions in NL aretypically received in 1QInvestment margin(in EUR mln)• The investment margin decreased18.1% vs 1Q12, reflecting impactof low interest rates, lower incomefrom real estate and lowerdividends on equities, all in theBenelux• Decline vs 4Q12 largely due toEUR 51 mln release from theprovision for profit sharing in 4Q36 47464044564244 39431Q12 2Q12 3Q12 4Q12 1Q13Benelux CRE174 169110104109 108 1091091391371431061111011031Q12 2Q12 3Q12 4Q12 1Q13Benelux CRE IIMEurAsia income impacted by low yield environmentFirst Quarter 2013 Results 25144 114111801171631512142011510997 99941Q12 2Q12 3Q12 4Q12 1Q13CREBeneluxFour-quarter rolling average (bps)
  26. 26. Life & IM administrative expenses (in EUR mln)145 142 135 1368268 72 63697778 81 85791481Q12 2Q12 3Q12 4Q12 1Q13Benelux CRE IIMAdministrative expenses down from 1Q12First Quarter 2013 Results 26305288 288 284295-3.3%• Life & IM administrative expenses declined by 3.3%versus 1Q12, reflecting continued cost control, as well aslower Solvency II expenses, and the Hungarian financialinstitutions tax of EUR 14 mln in 1Q12• Compared with 4Q12, expenses rose 3.9% due to higherpension costs in the Benelux, and EUR 8 mln of provisionreleases in CRE in 4Q12• The expenses/income ratio increased to 49.5% as aresult of lower income and higher pension costs
  27. 27. First Quarter 2013 Results 27Insurance ING U.S.
  28. 28. Sales(APE, in EUR mln)• Total sales rose 15.1% year-on-year and 15.7% sequentially, bothexcluding FX, mainly driven byrespectively strong Retirementsales and seasonalityUnderlying pre-tax result(in EUR mln)• The underlying pre-tax result forInsurance US was EUR 189 mln,slightly down from EUR 195 mln in4Q12, mainly due to lowerrevaluations on alternative assetsOperating result(in EUR mln)• The operating result of theongoing business for InsuranceUS increased 0.7%, excl. FX,versus 1Q12• IIM posted a first quarteroperating result of EUR 14 mln,down from 1Q12 due to non-recurring expense accrual releasein the prior yearING U.S. ongoing businesses posted solid resultsFirst Quarter 2013 Results 28150170196 19015214161411181Q12 2Q12 3Q12 4Q12 1Q13Insurance US IIM192 192 195 18939722 224015 101Q12 2Q12 3Q12 4Q12 1Q13Insurance US IIM548469 4745556321Q12 2Q12 3Q12 4Q12 1Q13
  29. 29. -384216-348136-3491Q12 2Q12 3Q12 4Q12 1Q13Estimated IFRS earnings sensitivities (in EUR mln)Equity Market Return 1Q13RAT 50Sufficiency-25% 1,150 50-15% 650 300-5% 250 550+5% -100 800+15% -300 1,000+25% -500 1,200US Closed Block VA: improved reserve adequacyFirst Quarter 2013 Results 29• Reserve adequacy has improved to the 73% confidencelevel. As a result, reserves are projected to remainadequate at a 50% confidence level, even in a 25%down shock scenario• Underlying results from the US Closed Block VAcontinued to reflect market volatility as hedges arefocused on protecting regulatory and rating agencycapital rather than mitigating IFRS earnings volatility• On an operating basis, the US Closed Block VAreported a loss of EUR 36 mln compared with a loss ofEUR 20 mln in 1Q12 and a loss of EUR 27 mln in 4Q12Underlying result (in EUR mln)
  30. 30. First Quarter 2013 Results 30Wrap up
  31. 31. Wrap upFirst Quarter 2013 Results 31• ING has demonstrated steady progress on the Group’s restructuring: IPO of our USinsurance business successfully launched• ING Group posts underlying net profit of EUR 800 mln, up vs both 1Q12 and 4Q12• Bank underlying pre-tax result rose to EUR 1,169 mln, supported by improvement in netinterest margin, the impact of cost savings initiatives and lower risk costs versus 4Q12• Insurance EurAsia underlying pre-tax result rose to EUR 85 mln, reflecting lower impact ofmarket related items. Operating result declined to EUR 79 mln on lower investment marginand non-life results• Ongoing business Insurance US posted a solid quarter with operating result of EUR 152mln. The underlying pre-tax result of Insurance ING U.S. was EUR –192 mln, reflectinghedge losses on Closed Block VA
  32. 32. First Quarter 2013 Results 32Appendix
  33. 33. US IPO has aEUR -1.7 bln impact toGroup EquityReduction core debtby EUR 2.1 blnfollowing ING Bankdividend (EUR 1.5 bln)and secondary offeringproceeds upstreamedby ING Insurance(EUR 0.5 bln)Equity Insurance downby EUR 2.2 bln(= Equity impact USIPO of EUR -1.7 blnplus upstreamsecondary offeringproceeds of EUR 0.5bln to ING Group)Post-IPO IFRS BV ofEUR 10.5 bln of whichING (75%) and minorityinterest (25%)EUR 0.4 bln proceedsfrom primary offeringby ING USING Group 31 March 2013ING Bank 37 Equity 54ING Insurance 27 CT1 securities 2HybridsB 7 Core Debt 7HybridsI 2 Hybrids 973 73ING Group capital structure at 31 March 2013 andpro-forma post US IPO and dividend upstream BankFirst Quarter 2013 Results 33ING InsuranceEurope 11.3 Equity 27.5US 10.1 Hybrids (G) 2.5Asia 5.5 Debt Subord0.5IC Debt (EurAsia) 3.5 Other Debt** 2.6IC Debt (US) 0.4SulAm, ING Re & Other* 2.433.1 33.1Insurance ING U.S.ING U.S. 13.0 Equity 10.1IC Debt 0.4Other Debt 2.613.0 13.0Pro-forma - ING GroupING Bank 35 Equity 53ING Insurance 25 CT1 securities 2HybridsB 7 Core Debt 5HybridsI 2 Hybrids 969 69Pro-forma - ING InsuranceEurope 11.3 Equity 25.3US 7.9 Hybrids (G) 2.5Asia 5.5 Debt Subord0.5IC Debt (EurAsia) 3.5 Other Debt** 2.6IC Debt (US) 0.4SulAm, ING Re & Other* 2.430.9 30.9Pro-forma Insurance ING U.S.ING U.S. 13.0 Equity (ING) 7.9Cash (primary) 0.4 Equity (3rd) 2.6IC Debt 0.4Other Debt 2.613.5 13.5* Includes Sul America (EUR 0.4 bln) and ING Re related to Japanese SPVA guarantees (EUR 1.6 bln)** Excludes EUR 2.6 bln of Other Debt in the US and EUR 0.4 bln cash at EurAsia
  34. 34. Pro-forma CRD IV core Tier 1 ratio fully-loaded 10.4%CRD IV core Tier 1 ratio• Final form of CRD IV has becomeclearer in 1Q13, specifically on CVAcapital and impact IAS 19R• There is an exemption to hold CVAcapital for non-financials (i.e.corporates). Consequently, estimatedRWA impact has been reduced• DNB has allowed Dutch banks toapply a regulatory adjustment toeliminate the impact of the revisedIAS 19 from available capital• Consequently, the so called corridorwill not be excluded from core Tier 1capital, immediately onimplementation, but will be phasedout (20% annually)• As a result of these changes, theimpact of CRD IV is estimated at-90 bps on introduction and -50 bpsphased in effectImpact CRD IV 1Q2013 (pro-forma) (EUR bln)Core Tier1 capital RWAsCT1ratio31 Mar 2013 (after dividend upstream) 32.8 278.2 11.8%Impact Basel III RWAs +17.9Deduct minorities -0.5Basel III impact upon implementation date 32.3 296.1 10.9%Revaluation reserve debt securities +1.2Revaluation reserve equity securities +1.3Revaluation reserve real estate own use +0.3Defined benefit pension fund assets -2.5Intangibles -0.5DTA -0.8Other -0.4Pro-forma core Tier 1 ratio (fully loaded) 30.9 296.1 10.4%34First Quarter 2013 Results
  35. 35. ING Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by theEuropean Union (‘IFRS-EU’).In preparing the financial information in this document, the same accounting principles are applied as in the 1Q2013ING Group Interim Accounts.Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made offuture expectations and other forward-looking statements that are based on management’s current views and assumptionsand involve known and unknown risks and uncertainties that could cause actual results, performance or events to differmaterially from those expressed or implied in such statements. Actual results, performance or events may differ materiallyfrom those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economicconditions 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) the implementation of ING’s restructuring plan to separatebanking and insurance operations, (5) changes in the availability of, and costs associated with, sources of liquidity such asinterbank funding, as well as conditions in the credit markets generally, including changes in borrower and counterpartycreditworthiness, (6) the frequency and severity of insured loss events, (7) changes affecting mortality and morbidity levelsand trends, (8) changes affecting persistency levels, (9) changes affecting interest rate levels, (10) changes affecting currencyexchange rates, (11) changes in investor, customer and policyholder behaviour, (12) changes in general competitive factors,(13) changes in laws and regulations, (14) changes in the policies of governments and/or regulatory authorities, (15)conclusions with regard to purchase accounting assumptions and methodologies, (16) changes in ownership that could affectthe future availability to us of net operating loss, net capital and built-in loss carry forwards, (17) changes in credit-ratings,(18) ING’s ability to achieve projected operational synergies and (19) the other risks and uncertainties detailed in the RiskFactors section contained in the most recent annual report of ING Groep N.V. Any forward-looking statements made by or onbehalf of ING speak only as of the date they are made, and, ING assumes no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information or for any other reason. This document does notconstitute an offer to sell, or a solicitation of an offer to buy, any securities.www.ing.comDisclaimerFirst Quarter 2013 Results 35

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