ING records 2Q13 underlying net profit of EUR 942 million
7 August 2013
Group underlying net profit at EUR 942 million from EUR 800 million in 1Q13 and EUR 1,109 million in 2Q12
2Q13 net profit EUR 788 million, or EUR 0.21 per share, including discontinued operations, special items and divestments
Bank underlying result before tax up 13.5% vs. 2Q12 to EUR 1,147 million; declines 1.9% from seasonally strong 1Q13
Net interest margin continued to improve, rising to 1.42% supported by higher savings margins
Ongoing cost-containment programmes yielded further savings and the cost/income ratio improved to 54.3%
Risk costs remained elevated at EUR 616 million, or 89 bps of average RWA, versus 73 bps in 2Q12 and 81 bps in 1Q13
Insurance EurAsia operating result rose to EUR 256 million, up 26.1% versus 2Q12 and more than triple 1Q13
Operating result supported by cost reductions from transformation programme, improved Non-life result and lower funding costs
Investment spread unchanged at 94 bps as both average life general account assets and average investment income were stable
Underlying result before tax of Insurance EurAsia improved signifi cantly both year-on-year and sequentially to EUR 182 million
Insurance ING U.S. operating result rose to EUR 140 million, from EUR 102 million in 2Q12 and EUR 87 million in 1Q13
Operating result increased driven by growth in fees and premium-based revenues and a higher technical margin
2Q13 showed continued strength in net infl ows in the Retirement and Investment Management businesses
Underlying result before tax was EUR -19 million refl ecting losses on Closed Block VA equity hedges in place to protect capital
ING maintained strong capital ratios; shareholders’ equity ended the quarter at EUR 49.9 billion
Bank core Tier 1 ratio remained strong at 11.8% following EUR 1.8 billion capital upstream to ING Group in the second quarter
Insurance EurAsia IGD Solvency I ratio improves to 304%; estimated combined RBC ratio for ING U.S. was 454% at 30 June
Given ING’s priority to repay the Dutch State, an interim dividend on common shares will not be paid in 2013
Chairman’s Statement
“ING has made good progress so far this year as we work to improve our operational performance, execute our restructuring and prepare our banking and insurance companies for independent futures,” said Jan Hommen, CEO of ING Group. “We successfully completed the IPO of our U.S.-based retirement, investment and insurance business in May. The proceeds from the IPO, along with a capital upstream from the Bank, have reduced the leverage in the Group holding company to EUR 4.4 billion, which is covered by the value of our remaining stake in ING U.S. today. We completed the merger of the commercial operations of WestlandUtrecht Bank with Nationale-Nederlanden Bank on 1 July, paving the way to divest these operations as part of the Insurance Europe IPO.”
“The financial performance in all three business segments was robust in the second quarter. ING Bank posted solid underlying pre-tax results of EUR 1,147 million, despite higher risk costs reflecting the challenging economic climate. Savings inflow remained strong, with net funds entrusted growth of EUR 6.5 billion, while the net interest margin improved to 1.42%. Cost-containment efforts helped reduce the cost/income ratio to 54.3% and the return on equity for the first six months increased to 9.3%, approaching our Ambition 2015 target of 10-13%.”
“The operating results of Insurance EurAsia showed substantial improvement both year-on-year and sequentially. The European business has been accelerating its transformation programme to be ready for a base case IPO in 2014. The programme has already yielded cost savings that supported the second-quarter results together with an improvement in the Non-life result and lower funding costs. To expedite the IPO process, ING U.S. will be transferred out of ING Insurance (ING Verzekeringen N.V.), clearing the way to use ING Insurance as the IPO entity.”
“In its first quarter as a public company, ING U.S. continued to generate robust net inflows from the Retirement and Investment Management businesses, contributing to higher fees and premium-based revenues, which drove this quarter’s solid operating performance. The strength of the U.S. franchise is evident in the 50% appreciation of its stock price since the IPO, bringing the current
market value of ING’s remaining 71% stake in the company to EUR 4.5 billion.”
“I am extremely proud of what our people have achieved this quarter and over the past years, through an exceptional period of change within our company and in the financial industry. Every step of the way, we have tried to keep the interests of our customers as our first priority. I am grateful for the support of our employees and consider myself privileged to have been given the opportunity to serve as their leader during this period of enormous change. On 1 October, Ralph Hamers will take over from me as CEO of ING Group. Ralph and I are working together to ensure a smooth transition, and I am confident that he will continue the drive to build strong, sustainable futures for our businesses, while placing the highest priority on the needs of our customers.”
7 August 2013
Group underlying net profit at EUR 942 million from EUR 800 million in 1Q13 and EUR 1,109 million in 2Q12
2Q13 net profit EUR 788 million, or EUR 0.21 per share, including discontinued operations, special items and divestments
Bank underlying result before tax up 13.5% vs. 2Q12 to EUR 1,147 million; declines 1.9% from seasonally strong 1Q13
Net interest margin continued to improve, rising to 1.42% supported by higher savings margins
Ongoing cost-containment programmes yielded further savings and the cost/income ratio improved to 54.3%
Risk costs remained elevated at EUR 616 million, or 89 bps of average RWA, versus 73 bps in 2Q12 and 81 bps in 1Q13
Insurance EurAsia operating result rose to EUR 256 million, up 26.1% versus 2Q12 and more than triple 1Q13
Operating result supported by cost reductions from transformation programme, improved Non-life result and lower funding costs
Investment spread unchanged at 94 bps as both average life general account assets and average investment income were stable
Underlying result before tax of Insurance EurAsia improved signifi cantly both year-on-year and sequentially to EUR 182 million
Insurance ING U.S. operating result rose to EUR 140 million, from EUR 102 million in 2Q12 and EUR 87 million in 1Q13
Operating result increased driven by growth in fees and premium-based revenues and a higher technical margin
2Q13 showed continued strength in net infl ows in the Retirement and Investment Management businesses
Underlying result before tax was EUR -19 million refl ecting losses on Closed Block VA equity hedges in place to protect capital
ING maintained strong capital ratios; shareholders’ equity ended the quarter at EUR 49.9 billion
Bank core Tier 1 ratio remained strong at 11.8% following EUR 1.8 billion capital upstream to ING Group in the second quarter
Insurance EurAsia IGD Solvency I ratio improves to 304%; estimated combined RBC ratio for ING U.S. was 454% at 30 June
Given ING’s priority to repay the Dutch State, an interim dividend on common shares will not be paid in 2013
Chairman’s Statement
“ING has made good progress so far this year as we work to improve our operational performance, execute our restructuring and prepare our banking and insurance companies for independent futures,” said Jan Hommen, CEO of ING Group. “We successfully completed the IPO of our U.S.-based retirement, investment and insurance business in May. The proceeds from the IPO, along with a capital upstream from the Bank, have reduced the leverage in the Group holding company to EUR 4.4 billion, which is covered by the value of our remaining stake in ING U.S. today. We completed the merger of the commercial operations of WestlandUtrecht Bank with Nationale-Nederlanden Bank on 1 July, paving the way to divest these operations as part of the Insurance Europe IPO.”
“The financial performance in all three business segments was robust in the second quarter. ING Bank posted solid underlying pre-tax results of EUR 1,147 million, despite higher risk costs reflecting the challenging economic climate. Savings inflow remained strong, with net funds entrusted growth of EUR 6.5 billion, while the net interest margin improved to 1.42%. Cost-containment efforts helped reduce the cost/income ratio to 54.3% and the return on equity for the first six months increased to 9.3%, approaching our Ambition 2015 target of 10-13%.”
“The operating results of Insurance EurAsia showed substantial improvement both year-on-year and sequentially. The European business has been accelerating its transformation programme to be ready for a base case IPO in 2014. The programme has already yielded cost savings that supported the second-quarter results together with an improvement in the Non-life result and lower funding costs. To expedite the IPO process, ING U.S. will be transferred out of ING Insurance (ING Verzekeringen N.V.), clearing the way to use ING Insurance as the IPO entity.”
“In its first quarter as a public company, ING U.S. continued to generate robust net inflows from the Retirement and Investment Management businesses, contributing to higher fees and premium-based revenues, which drove this quarter’s solid operating performance. The strength of the U.S. franchise is evident in the 50% appreciation of its stock price since the IPO, bringing the current
market value of ING’s remaining 71% stake in the company to EUR 4.5 billion.”
“I am extremely proud of what our people have achieved this quarter and over the past years, through an exceptional period of change within our company and in the financial industry. Every step of the way, we have tried to keep the interests of our customers as our first priority. I am grateful for the support of our employees and consider myself privileged to have been given the opportunity to serve as their leader during this period of enormous change. On 1 October, Ralph Hamers will take over from me as CEO of ING Group. Ralph and I are working together to ensure a smooth transition, and I am confident that he will continue the drive to build strong, sustainable futures for our businesses, while placing the highest priority on the needs of our customers.”
