Commercial Banking: Robust businessmodel providing attractive returnsING Investor DayWilliam ConnellyCEO Commercial Bankin...
ING Commercial Banking: Robust business modelproviding attractive returns           Commercial Banking showed strong perfo...
Commercial Banking has performed stronglythroughout the crisis and continues to perform wellUnderlying income* (EUR mln)  ...
Strict cost discipline resulted in efficiency which isamong the best in the industryCost / Income ratio*                  ...
Capital has been allocated to higher returnbusinesses, SF in particular, and ROE has increasedRWA (EUR bln)               ...
Commercial Banking has strong regional positionsand world-class franchises• ING is the leading Commercial Bank in the Bene...
Case study: Corporate Clients               Netherlands                  Annerie Vreugdenhil, Head of Commercial Banking N...
Full-service Commercial Banking in the Netherlands, supportingclient needs from payments through to strategic adviceIncome...
ING has improved its market position in theNetherlands and is now the leading Commercial BankING is the leading Commercial...
The strengths of our Commercial Bank in the Netherlandsare also reflected in strong product capabilitiesLeadership positio...
ING Commercial Banking is the only Dutch bank with alarge international network, spanning 40 countries           ING Home ...
Strategy CC NL going forward is aimed at furtherstrengthening of leadership positions and attractive returns              ...
Our successes in the Dutch Large-Corp market can betranslated in the Mid-Corp market and other countries       NL         ...
Impact of new regulation and             strategic adaptations                                William Connelly, CEO Commer...
Regulatory changes will put pressure on returns,particularly in the Financial Markets businessRWA Commercial Banking (EUR ...
ING has been responding by (re-)positioning itsproduct offering                             • Lease activities in non-core...
Case study: Financial Markets                       Percy Rueber, Global Co-Head Financial MarketsING Investor Day - 13 Ja...
Impact of Basel 2.5 and 3 will be partly offset bymanagement actionsRWA Financial Markets (EUR bln)                       ...
Identified management actions leading to aEUR 10 bln reduction in RWA                               • Restructuring New Yo...
Financial Markets: Key activitiesKey activities                                                      FM business line• Hed...
Financial Markets: Diversified portfolioFM – Income by                                    FM – Income by product,      FM ...
Strategy of Financial Markets going forward in aBasel 3 world                                 • Continue to invest and gro...
Commercial Banking and              balance sheet optimisation                                William Connelly, CEO Commer...
Commercial Banking is making a strong contributionto ING Bank’s balance sheet optimisation                                ...
Increased focus on deposits growth• Increased focus on deposits growth will result in a    Funds Entrusted 2011 - EUR 64 b...
In the One Bank organisation, ING is matching high-quality andhigh-return asset origination with liability-generating capa...
Case study: Structured Finance                   Christopher Steane, Global Head of Lending ServicesING Investor Day - 13 ...
Structured FinanceStructured Finance business lines                         Natural Resources – Offshore• Energy, Transpor...
Structured Finance portfolio is well diversified both  geographically and by sectorSF lending by sector                   ...
Structured Finance benefitted from repricing of theportfolio and higher deal flowStructured Finance income (EUR mln)      ...
Structured Finance is an efficient business withwell controlled risk costs and a high ROE                                 ...
Repricing yet to be fully realised but acceleratingSince the summer loan pricing has begun                                ...
Commercial Banking strategy              going forward                                William Connelly, CEO Commercial Ban...
Change in external Commercial Banking reportingstructure as of the first quarter 2012                                     ...
Overall strategy of ING Commercial Banking willremain stable, building upon our strengthsIncome Commercial Banking,       ...
DisclaimerING Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standardsas adopte...
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ING Investor Day 2012: Commercial Banking. Robust business model providing attractive returns

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ING Investor Day 2012: Commercial Banking. Robust business model providing attractive returns

  1. 1. Commercial Banking: Robust businessmodel providing attractive returnsING Investor DayWilliam ConnellyCEO Commercial BankingAmsterdam – 13 January 2012
  2. 2. ING Commercial Banking: Robust business modelproviding attractive returns Commercial Banking showed strong performance through the crisis 1 by allocating capital to core markets and high-return businesses Annerie Vreugdenhil – Case study Corporate Clients Netherlands External and regulatory challenges will lead to some strategic 2 adaptations, particularly in Financial Markets Percy Rueber - Case study Financial Markets As part of the balance sheet integration initiatives, Structured 3 Finance will grow its high yielding assets Christopher Steane - Case study Structured Finance Overall Commercial Banking strategy stable, building upon our 4 unique strengthsING Investor Day - 13 January 2012 2
  3. 3. Commercial Banking has performed stronglythroughout the crisis and continues to perform wellUnderlying income* (EUR mln) Risk costs* 72 5,350 4,188 4,657 4,059 38 3,777 191 34 33 31 1,207 3,857 594 490 422 316 -144 2007 2008 2009 2010 9M10 9M11 2007 2008 2009 2010 9M10 9M11 Impairments on Greek government bonds Risk costs (EUR mln) Risk costs (bps**)Underlying result before tax* (EUR mln) • Commercial Banking has performed strongly throughout the crisis and continues 2,217 to perform well 1,856 191 1,648 1,042 • Risk costs remained under control 752 1,643 • The result in 2008/2009 was negatively impacted by FV changes and impairments on Real Estate investments and 2007 2008 2009 2010 9M10 9M11 development projects but real estate Impairments on Greek government bonds exposure has since been reduced sharply •Adjusted for sale of Car Lease and REIM **As percentage of average RWAING Investor Day - 13 January 2012 3
  4. 4. Strict cost discipline resulted in efficiency which isamong the best in the industryCost / Income ratio* Cost / Income ratio CIB activities*,** (9M11) 64% 59% 93% 86% 52% 49% 49% 71% 69% 65% 56% 49% 46.9% 38% 2007 2008 2009 2010 9M11 C/I ratio Excl. Impairments on Greek government bonds UBS CS DB Bar SG BNPP ING San• Headcount has been reduced by 10% since 2008*• Limited and targeted new hires to re-balance capabilities• Cost/income ratio first nine months of 2011 impacted by impairments on Greek government bonds* Adjusted for divestments (sale of Car Lease and REIM)** CIB activities refers to Investment Banking (UBS, CS), Corporate & Investment Banking (DB, Barclays, SocGen, BNPP), Commercial Banking(ING) and Global Wholesale Banking (Santander)ING Investor Day - 13 January 2012 4
  5. 5. Capital has been allocated to higher returnbusinesses, SF in particular, and ROE has increasedRWA (EUR bln) RoE* 9M 2011 by product (%) 174.2 25.4% 156.6 19.1% 38.3% 140.2 28.7% 29.3% 135.5 22.0% 18.2% 13.6% 11.4% 8.6% 9.6% 7.2% 2008 2009 2010 9M11 REF SF FM L&F GL & PCM RoE at CT 1 ratio of 7.5% Impairments on Greek RoE at CT 1 ratio of 10% government bondsRWA per product (EUR bln) RoE* (%) 57 18.2% 41 41 43 39 13.7% 33 18 15.4% 16.5% 12.4% 9 9 11.6% 6 7.0% 4.5% 3.4% 5.3% REF SF FM L&F GL&PCM 2008 2009 2010 9M11 RoE at CT 1 ratio of 7.5% Impairments on Greek 2008 3Q11 government bonds RoE at CT 1 ratio of 10%* Return on Equity = Underlying after-tax return divided by equity based on average 7.5% core Tier 1 ratio (annualised)ING Investor Day - 13 January 2012 5
  6. 6. Commercial Banking has strong regional positionsand world-class franchises• ING is the leading Commercial Bank in the Benelux • Voted “Best Bank in the Netherlands” (The Banker, 2011) • Voted “Best M&A Financial Advisor in the Benelux” (FT Merger Market, 2011) • Recognised as preferred advisor by clients (Greenwich Survey, 2011)• Extensive and unique regional network in Europe, especially in CEE • Superior global network, especially in CEE, supporting our Benelux client base. Recognised as most preferred bank for business in CEE by our clients (Greenwich / Client surveys) • Superior network, supporting our global product franchise • Facilitating an attractive franchise servicing multinationals (esp. from US and Western Europe, and particularly their operations in Benelux/CEE)• ING has strong global franchises in Specialised Finance and Financial Markets • Leading Specialised Finance franchise (#10 MLA, Thomson Reuters/Dealogic, 2007-2011) • Best global commodity finance bank (Global Trade Review, 2011) • Strengthening foothold in European DCM, reflected by #8 position in Euro Investment Grade Corporate Bonds (Thomson Reuters, 3Q11) • Top 3 position in FM in the Benelux corporate market and Top 5 positions in chosen global emerging market nichesING Investor Day - 13 January 2012 6
  7. 7. Case study: Corporate Clients Netherlands Annerie Vreugdenhil, Head of Commercial Banking NLING Investor Day - 13 January 2012 7
  8. 8. Full-service Commercial Banking in the Netherlands, supportingclient needs from payments through to strategic adviceIncome Commercial Banking CC NL Number 1 Commercial Bank in the(EUR mln)*,** Netherlands • Full-service Commercial Banking in the CAGR 8.9% Netherlands 587 564 • ING has improved its market position 546 in the Netherlands and is now the leading financial institution 458 • Leading position has resulted in 418 improved results without allocating more capital • We are well positioned for further growth through increasing cross-selling and improving capabilities and market 2007 2008 2009 2010 2011 share in certain products estimate • Our successes in the Dutch LargeCorp Commercial Banking CC NL has a ROE of market can be translated to the 20% in 9M11*** MidCorp market and other countries *CC NL is Corporate Clients Netherlands; ** Excl. capital gains and impairments; ***R0E based on 7.5% core Tier 1 ratio (annualised, RoE based on core Tier 1 ratio of 10% is 15%)ING Investor Day - 13 January 2012 8
  9. 9. ING has improved its market position in theNetherlands and is now the leading Commercial BankING is the leading Commercial Bank in ING is the number 1 Commercial Bank inthe Netherlands the Netherlands• The change of competitive landscape in the 2006 2010 Netherlands in 2007/2009 led to a window of opportunity 93 2 1• ING took the opportunity to ‘step up’ and take 88 81 leadership. We continued to focus on our 80 75 72 service offering and have selectively invested in our product capabilities, particularly ECM, 63 76 DCM and M&A. This established the basis 66 70 68 for our current success• We remain well positioned for further growth 56 as we continue to selectively invest in certain 66 products, PCM in particular, and our network 44 45 offering 35 34• Preliminary 2011 numbers from Greenwich 19 indicates that ING is the leading Commercial Bank in the Netherlands for the 3rd ABN ING Rabo ING Rabo RBS consecutive year Total relationships Core relationships Lead relationships Source: Greenwich SurveyING Investor Day - 13 January 2012 9
  10. 10. The strengths of our Commercial Bank in the Netherlandsare also reflected in strong product capabilitiesLeadership position in the Netherlands also Awards showing our leadershipreflected in high league table rankings for our positioncore products ING voted “Best M&A Advisor in the• MLA Syndicated Loans - from # 2 in 2007 to Benelux” (FT Merger Market, 2011) # 1 in 2011 (value and amount of transactions)*• Market Penetration Cash Management – from # 3 in 2007 to # 2 in 2010**• M&A – from # 17 in 2007 to # 1 in 2011 (value of transactions)*• DCM corp – from # 13 in 2007 to # 4 in 2011 ING wins Best Trade Finance Bank (value of transactions)* award (Global Finance magazine)• ECM - from # 9 in 2007 to # 1 in 2010 (amount of transactions)** Thomson Reuters** GreenwichING Investor Day - 13 January 2012 10
  11. 11. ING Commercial Banking is the only Dutch bank with alarge international network, spanning 40 countries ING Home Markets ING Commercial Banking presence Alliance Banking (with SEB)• ING will further leverage its network for increased international flowsING Investor Day - 13 January 2012 11
  12. 12. Strategy CC NL going forward is aimed at furtherstrengthening of leadership positions and attractive returns • Further strengthening of leadership position as foreign players retrench • Continue to invest and grow market share in product capabilities, Further particularly in: strengthen leadership • Payments and Cash Management position • Supply Chain Finance / Working Capital Solutions • Trade Finance • Selective hiring to further improve client relationship management • Exploit leadership position, further increasing cross- and deep-sell Improve returns • Leverage network for increased international flows without allocating more • Continuously improve efficiency of capital allocation by prioritisation capital of clients • Re-price to absorb higher funding costs and optimise portfolio Increase • Targeted campaigning to increase customer deposits funding • Strong focus on increasing market share in PCMING Investor Day - 13 January 2012 12
  13. 13. Our successes in the Dutch Large-Corp market can betranslated in the Mid-Corp market and other countries NL NL Belgium Germany Poland Strategic Products 430 Fully tailored to company needs Event Finance, ECM, DCM, relations Large- Corp Finance Corp Transaction Based Products Tailored solutions with modular products P&CM, Lending, FM, 40.000 Lease, Com.Fin, Mid-Corp relations Event Finance, Corp. Finance Standardised products Lending, 550.000 Lease SME relations PCM • Our successes in the Dutch Large-Corp market can be copied to other home markets. • Translate our successes in the Large-Corp market to the Mid-Corp and SME marketsING Investor Day - 13 January 2012 13
  14. 14. Impact of new regulation and strategic adaptations William Connelly, CEO Commercial BankingING Investor Day - 13 January 2012 14
  15. 15. Regulatory changes will put pressure on returns,particularly in the Financial Markets businessRWA Commercial Banking (EUR bln) RoE and pro-forma RoE Basel 3, after 15 identified management actions, 9M11*** -14 11 18.2% 12.5% > 13% 148 11.4% 136 Basel 2, based on Pro-forma Basel Target 2015 CT 1 of 7.5% 2.5/3, based on CT 9M11 Basel 2.5 Basel 3* Identified Pro-forma 1 of 10%, after mgt mgt actions** actions** Identified management actionsRoE* and pro-forma RoE Basel 3 by product, after identified management actions, 9M11* 38.3% 28.7% 29.3% 25.4% 22.0% 12.5% 11.4% 10.1% 9.6% 7.2% 10.3% 8.6% REF SF FM*** L&F GL & PCM Basel 2 and based on CT1 ratio of 7.5% Basel 2.5/3 and based on CT1 ratio of 10%, after mgt actions Identified management actions* Basel 3 impact is initial, indicative estimate that is still subject to change** RWA impact of management actions refer to FM (EUR -10 bln) , RED / RE Investments (EUR -3 bln) and General Lease (EUR -1 bln)*** RoE adjusted for impairments on Greek government bondsING Investor Day - 13 January 2012 15
  16. 16. ING has been responding by (re-)positioning itsproduct offering • Lease activities in non-core markets are under review (EUR 5 bln of RWA) Lease • Several countries placed in run-off leading to a net RWA reduction of at least EUR 1 bln Real Estate • Reduce exposure to Real Estate Investments and Real Estate Development Investments & projects (EUR 3 bln RWA) Development • Eventual exit in 2015 • Accelerating balance sheet optimisation initiatives across regions • Re-allocating resources towards core franchises and clients Lending • Maintaining strict pricing discipline and maximising cross sell – managing for returns • Investments in trade and flow products (fee generating, low capital intensity) • Supporting core Benelux franchise and network capabilities PCM • Supporting deposit gathering abilities • Investing circa EUR 80 mln over next 4 years But most significant impact of new regulations is on our Financial Markets platform…ING Investor Day - 13 January 2012 16
  17. 17. Case study: Financial Markets Percy Rueber, Global Co-Head Financial MarketsING Investor Day - 13 January 2012 17
  18. 18. Impact of Basel 2.5 and 3 will be partly offset bymanagement actionsRWA Financial Markets (EUR bln) Basel 2.5 impact RWA ING and Peers*** 15 -10 37% 11 25% 16% 49 10% 33 6% 6% 4% 2% 9M2011 Basel 2.5 Basel 3* Identified Pro-forma UBS DB CS SG Bar BNPP ING San mgt actions • The 2011 year-end implementation of market riskRoE Financial Markets, 9M11** model updates, including the impact of Basel 2.5, is estimated at around EUR 11 bln • Indicative, initial RWA impact of Basel 3 is 12.5% EUR 15 bln 25.4% 10.3% > 13.0% • Currently identified management actions will lead to a RWA reduction of EUR 10 bln Basel 2, based on Pro-forma Basel Target 2015 • Additional management actions will lead to a CT1 of 7.5% 2.5/3, based on CT further mitigation 1 of 10%, after mgt actions * Basel 3 is initial, indicative estimate that is still subject to change ** Adjusted for impact of Greek government bonds Identified management actions *** Basel 2.5 RWA divided by Group RWAING Investor Day - 13 January 2012 18
  19. 19. Identified management actions leading to aEUR 10 bln reduction in RWA • Restructuring New York platform Adaptation of • De-risking of Emerging Markets Credit Trading activities Financial • Alignment equities capabilities (secondary, primary, Markets derivatives, financing) in a single Platform platform and de-risking • Optimise client facilitation model, reduce trade inventories • Restructuring Mexico branch • Increase collateralised business with corporates and central Other counterparty clearing measures • Central counterparty exposure management • Hedging/portfolio optimisationING Investor Day - 13 January 2012 19
  20. 20. Financial Markets: Key activitiesKey activities FM business line• Hedging solutions to mitigate financial risks for “Corporates”, companies listed on the stock exchange as well as “Institutional” clients and “Mid-sized corporates”• Investment solutions to “Institutional” clients such as pension Clients & Products funds and insurance companies• Financing solutions for both “Institutional” and “Corporate” clients through the DCM platform• Managing the ING Bank balance sheet through the “ALCO” and “Treasury” department, in close cooperation with Capital Management. ALCO & STP• Identifying Strategic Trading positions through the Strategic Trading Platform• Single Bank treasury to be created over the course of 2012• ALCO/Treasury will be carved out of Financial Markets and One Bank Treasury reported under Commercial Bank Other’ from 1Q2012ING Investor Day - 13 January 2012 20
  21. 21. Financial Markets: Diversified portfolioFM – Income by FM – Income by product, FM – Income by ClientGeography, 9M11* 9M11* Segment, 9M11* 6% 21% 36% 24% 31% 62% 64% 6% 2% 48% Developed markets Corporate Clients Rates & FX Financial Institutions Emerging markets Credit Trading Product Clients DCM Global equity Products Corporate Finance• FM is a well diversified business, exposed to developed markets and faster growing economies• FM is skewed to rates and FX, rather than credit* Based on new reporting structure (as of 1Q12)ING Investor Day - 13 January 2012 21
  22. 22. Strategy of Financial Markets going forward in aBasel 3 world • Continue to invest and grow market share in areas of strength such as Debt Capital Markets and Interest Rates in the "Home Markets“ • Capitalise on leadership position in the "International Markets" in strategic Further locations such as CEE and Asia strengthen • Align other locations to strategic priorities including risk reduction in the leadership Mexico branch and streamlining product portfolio and the shift to client position facilitation in the NY office • Enhance product portfolio by introducing an integrated Equities product that aligns our primary, secondary, derivatives and financing capabilities into one client platform • Making client-driven business the focus of all products and reducing trading inventories and risk positions accordingly • Placing wherever possible the emphasis on collateralised and centrally Improve cleared products returns • Repricing products in line with the markets • Prioritise clients and focus on cross-sell in line with Commercial Bank objectives • Continue upgrades in operational platforms - completing the FM TOM* Other and integrating the Equities businesses* Target Operating Model (TOM)ING Investor Day - 13 January 2012 22
  23. 23. Commercial Banking and balance sheet optimisation William Connelly, CEO Commercial BankingING Investor Day - 13 January 2012 23
  24. 24. Commercial Banking is making a strong contributionto ING Bank’s balance sheet optimisation • Commercial Banking will focus on gathering liabilities to Continue support the funding and liquidity restrictions in the Dutch NV strong deposit • Clear targets for commercial sales force growth • Targeting deposits with high liquidity value • Sell/reduce non-core assets Replace • Reduce non-strategic trading assets in Financial Markets to low-yielding make room for growth in customer lending assets with • Evolve customer loan book towards higher-return businesses customer such as Structured Finance while maintaining a prudent lending risk/return profile • Re-price lending to reflect the higher cost of capital • Structured Finance will grow its lending assets in the funding Balance sheet rich entities (Direct and Belgium) as a result of balance sheet integration integration initiatives to provide them high-yielding assetsING Investor Day - 13 January 2012 24
  25. 25. Increased focus on deposits growth• Increased focus on deposits growth will result in a Funds Entrusted 2011 - EUR 64 bln strong growth of funds entrusted 8%• Individual targets have been set throughout the organisation and development of funds entrusted is monitored on a weekly basis 18%• Initiatives are underway to focus on liquid clients such as non-bank FIs (pension funds etc.) in 53% particular• Clients to which we commit our balance sheet and 21% with which we have significant relationships are encouraged to put deposits for longer periods with ING NL BeLux RoE RoW• Investments in Payments and Cash Management capabilities will in the medium term further enhance its competitive position in attracting funds• Evidence of clients recognising of our improved transaction services is the recently won PCM mandate with the Flemish governmentING Investor Day - 13 January 2012 25
  26. 26. In the One Bank organisation, ING is matching high-quality andhigh-return asset origination with liability-generating capabilitiesING Bank’s 1st wave: 4th wave:funding internal 2nd wave: 3rd wave: domesticposition securitisations mortgages CB assets banks• Funding gap in • Units with excess • Transfer • Transfer • In selected ING the Netherlands funding invest in own-originated selected Direct countries, can be reduced internally ring- mortgages Commercial merge ING and through more fenced and directly to Banking assets CB activities into efficient balance packaged funding-rich units to funding-rich one legal entity sheet mortgages units management• ING Belgium and ING Direct are funding rich • Transactions completed so far (SF/REF) totalling EUR 3 bln • Transactions identified for 2012 (subject to regulatory approval) amount to EUR 5 bln • Germany as most advanced example, full merger into one legal entity • Structured Finance to establish front office teams in Germany and Belgium to take participations in new and existing SF transactionsING Investor Day - 13 January 2012 26
  27. 27. Case study: Structured Finance Christopher Steane, Global Head of Lending ServicesING Investor Day - 13 January 2012 27
  28. 28. Structured FinanceStructured Finance business lines Natural Resources – Offshore• Energy, Transport and Infrastructure Group: • Natural Resources • Utilities-Power • Infrastructure • Asset-Based Finance • Structured Metals & Energy Finance• Specialised Financing Group: • Telecom and Media Finance • Structured Acquisition Finance • Structured Securitised Finance / Structured FI-metrix Commodity Client Survey Solutions Group • Local Structured Finance (Americas, Asia, UK, CEE, CWE, NL)• International Trade and Export Finance: • Trade and Commodity Finance • Structured Export Finance • Trade Finance ServicesING Investor Day - 13 January 2012 28
  29. 29. Structured Finance portfolio is well diversified both geographically and by sectorSF lending by sector SF lending by country of riskEUR 52 bln in 9M11 EUR 52 bln in 9M11 12% 0% USA 8.5 NL 3.6 37% UK 3.5 21% China 3.4 Energy, Transport & Infrastructure Russia 3.1 Specialised Financing Group Switzerland 2.7 International Trade & Export Finance 30% Trade Finance Services Singapore 1.9 Other France 1.6SF lending by region of booking Korea 1.3EUR 52 bln in 9M11 12% 30% Next 10 countries 9.5 17% Next 10 countries 5.6 NL* BeLux CWE Asia Other countries 6.9 Americas UK 5% Other 0 2 4 6 8 10 21% 11% 4%* Including non-Dutch CB activities booked in the Netherlands ING Investor Day - 13 January 2012 29
  30. 30. Structured Finance benefitted from repricing of theportfolio and higher deal flowStructured Finance income (EUR mln) Structured Finance – run-off (net) lending assets (EUR bln) 345 60 52 179 382 244 233 40 27 943 1,095 713 805 834 20 7 1 2 0 2008 2009 2010 9M10 9M11 2011 2015 2020 2025 2030 Interest Income Non-interest incomeStructured Finance- (net) lending assets Mix of:(EUR bln) • Short-term (Commodity Finance, Trade Finance) • Medium term (Telecom, Offshore) 45 43 50 52 • Longer-term (Infrastructure) • When future lending assets run-off, it will create further repricing opportunities 2008 2009 2010 9M11ING Investor Day - 13 January 2012 30
  31. 31. Structured Finance is an efficient business withwell controlled risk costs and a high ROE Underlying risk costs in bps of averageUnderlying cost/income ratio (%) RWA50% 200 37.3%40% 15030% 25.8% 25.7% 24.2% 100 147 12820% 50 74 normalised 40-45 bps 7110% 0 32 1 14 FY 08 FY09 FY10 9M11 -50 -1 -17 -16 -100 -66 2001 2003 2005 2007 2009 9M11RoE (YTD, %) 29.3% 24.2% 21.3% 22.0% 18.1% 16.0% 9.7% 7.3% 7.3%5.5% FY08 FY09 FY10 9M10 9M11 Equity based on CT1 of 7.5% Equity based on CT 1 of 10%ING Investor Day - 13 January 2012 31
  32. 32. Repricing yet to be fully realised but acceleratingSince the summer loan pricing has begun • Loan margins fell from June 2010 tomoving upwards as Banks seek to address June 2011capital and funding costs… • High level of refinancing activity in H1 2011Illustrative return (bps) • Since June 2011, Syndicated Loan Mid Mid End markets have shrunk and pricing has 2010 2011 2011 begun to riseA-rated Investment Grade 90 70 90 • We think this will continue: currently veryCorporate Facilities Drawn cautious approach to underwritingMarginProject Finance 120 175 190 • As European banks shrink they will exit some international activitiesLBO (TLA/RCF) 415 400 435 • Supply / demand balance will change asOffshore 250 230 285 continued BRIC growth needs financeREF 65% LTV on Prime 225 225 260PropertyOn corporate deals:• Utilisation fees on first drawing (i.e. >zero) are emerging as opposed to the traditional >33%• Utilisation fees have risen from 15/30 bps to 30/50 bps• Premiums up to 50bps for US$ facilities have emerged together with restrictions on US$ drawings• Tenors did not go beyond 5+1+1 in the recent past and this has now been pulled back to 5 yearsING Investor Day - 13 January 2012 32
  33. 33. Commercial Banking strategy going forward William Connelly, CEO Commercial BankingING Investor Day - 13 January 2012 33
  34. 34. Change in external Commercial Banking reportingstructure as of the first quarter 2012 Commercial Banking General Lending and Industry Financial Markets Real Estate, Bank Transaction Services Lending “Clients & Products” Treasury & Other • Corporate & Financial • Structured Finance • Clients & Products* • Real Estate Institutions Lending • Real Estate Finance • Strategic Trading Development • Payments & Cash • Real Estate • Corporate Investment Management Investments Portfolio • Bank Mendes Gans • General Lease (core) • ALCO • Treasury • Trade Finance Services • General Lease • Securities Services (run-off) • Commercial Finance Income (9M11) Income (9M11) Income (9M11) Income (9M11) EUR 1,115 mln EUR 1,553 mln EUR 920 mln EUR 268 mln * Including Global Equity Products & Corporate FinanceING Investor Day - 13 January 2012 34
  35. 35. Overall strategy of ING Commercial Banking willremain stable, building upon our strengthsIncome Commercial Banking, Going forward, we will:9M11* • Maintain leadership positions in core markets • Benelux & CEE 22% 26% • Germany – opportunity to develop as core market franchise • Maintain leadership in core products • Top 10 player in Structured Finance globally • Top 3 FM player in the Benelux corporate market 13% 24% • Increase focus on cross-selling 2% • Capital will continue to be managed prudently and be 13% allocated to core markets and high return businesses NL** with attractive risk / reward characteristics Belgium/ Luxembourg • Continue to optimise our cost structure Germany CEE Rest of Europe Outside Europe* Income adjusted for Greek impairments booked in Belgium • Leading to a sustainable ROE for the** Including non-Dutch CB activities booked in the Commercial Bank of at least 13%NetherlandsING Investor Day - 13 January 2012 35
  36. 36. DisclaimerING Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standardsas adopted by the European Union (‘IFRS-EU’).In preparing the financial information in this document, the same accounting principles are applied as in the3Q2011 ING Group Interim Accounts. All figures in this document are unaudited. Small differences arepossible in the tables due to rounding.Certain of the statements contained herein are not historical facts, including, without limitation, certainstatements made of future expectations and other forward-looking statements that are based onmanagement’s current views and assumptions and involve known and unknown risks and uncertainties thatcould cause actual results, performance or events to differ materially from those expressed or implied insuch statements. Actual results, performance or events may differ materially from those in such statementsdue to, without limitation: (1) changes in general economic conditions, in particular economic conditions inING’s core markets, (2) changes in performance of financial markets, including developing markets, (3) theimplementation of ING’s restructuring plan to separate banking and insurance operations, (4) changes inthe availability of, and costs associated with, sources of liquidity such as interbank funding, as well asconditions 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 levelsand trends, (7) changes affecting persistency levels, (8) changes affecting interest rate levels, (9) changesaffecting currency exchange rates, (10) changes in general competitive factors, (11) changes in laws andregulations, (12) changes in the policies of governments and/or regulatory authorities, (13) conclusions withregard to purchase accounting assumptions and methodologies, (14) changes in ownership that couldaffect the future availability to us of net operating loss, net capital and built-in loss carry forwards, and (15)ING’s ability to achieve projected operational synergies. ING assumes no obligation to publicly update orrevise any forward-looking statements, whether as a result of new information or for any other reason. Thisdocument, and any other document or presentation to which it refers, do not constitute an offer to sell, or asolicitation of an offer to buy, any securities.www.ing.comING Investor Day - 13 January 2012 36

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