ING reports on challenging third quarter

At a glance

Underlying profit before tax

Bank up 16.3% to EUR 1021 million from third quarter 2011
Insurance down 90.6% to EUR 44 million from third quarter 2011


  • Underlying result higher on higher interest margin and sale of Capital One stake
  • Strong deposit-gathering capabilities generate EUR 11.0 billion in net funds entrusted growth
  • Expenses stable compared to the third quarter last year but up slightly on previous quarter
  • Capital position strengthened further with Bank’s core Tier 1 rising to 12.1%.
  • Continued to proactively de-risk balance sheet


  • Operating result down on both the previous quarter and the third quarter last year*
  • Focus continues on protecting regulatory capital
  • Sale of Insurance and Investment Management businesses in Asia making progress
  • Insurance/IM remains committed to making customers’ interests a priority in all business activity


ING Group announced on 7 November that it had posted a third-quarter underlying net profit of EUR 719 million. ING Bank recorded a solid quarter, with underlying pre-tax results up both on the third quarter last year and the previous quarter. The underlying result before tax of ING Insurance declined on both quarters, primarily due to negative results on hedges to protect regulatory capital.

Continuing to deliver on restructuring plans

Commenting on the third quarter results, ING Group CEO Jan Hommen said: “During the third quarter, ING continued to deliver on its restructuring plan amid a challenging operating environment.
We announced the first three sales of our Asian Insurance/IM units, and Insurance US is making strides in its IPO preparations. At the same time, together with the Dutch State, we have made good progress in our constructive dialogue with the European Commission about revisions to the restructuring plan.”

“At ING Bank, we announced the sales of ING Direct Canada and the UK as we sharpen our strategic focus. We also accelerated de-risking efforts, selling EUR 2.4 billion of European debt securities and releasing EUR 5 billion of RWA. The Bank posted a solid quarter, supported by a gain on the sale of our stake in Capital One. At Insurance we kept hedges in place to protect regulatory capital; however, losses on these hedges continued to affect results.

“As we work to solidify strong stand-alone futures for Bank and Insurance, we are taking steps to increase our agility in this uncertain environment. At Insurance Europe we are accelerating a transformation programme at Nationale-Nederlanden to sharpen its strategic focus and improve processes and systems. These measures, together with delayering of support functions, will result in a reduction in the workforce of 1,350 FTEs and annual savings of approximately EUR 200 million by the end of 2014. At Commercial Banking, we conducted a strategic review and have decided to simplify our business model and exit some businesses outside of ING’s home markets. These measures will reduce the workforce by 1,000 FTEs and lower expenses by EUR 260 million from 2015 onwards.

“It is painful to announce such steps today, because throughout these challenging times employees at all levels have worked tirelessly to prepare businesses for divestment, secure strong stand-alone futures for Bank and Insurance, and ensure that we are prepared for industry changes and regulatory requirements. And while our employees have gone through a whirlwind of change during the last four years, they have consistently placed their highest priority on supporting our customers. I am grateful for these contributions and am confident that these efforts, combined with further streamlining, will strengthen our company for the long-term benefit of all stakeholders.”


ING Bank posted solid third-quarter results, supported by the gain on the sale of ING’s equity stake in US bank Capital One. The result was achieved despite the uncertain economic environment and the continuing Eurozone debt crisis.

The underlying result before tax rose to EUR 1,021 million, up 16.3% from the third quarter of 2011 and 2.6% higher than in the second quarter of this year.

Expenses were stable compared to a year ago, supported by ongoing cost-containment initiatives, however they rose compared to the second quarter as that quarter included favourable one-off items, which reduced overall expenses then.

Risk costs increased compared to both the same period last year and the previous quarter, reflecting the weak economic environment.

Retail deposit growth remained strong with EUR 11.0 billion in net growth of funds entrusted. Total net lending declined by EUR 2.9 million, reflecting muted demand and pricing discipline.

ING continued to take pro-active de-risking measures in the third quarter, selling EUR 2.4 billion of European debt securities.

During the quarter, ING continued to work towards its strategic objectives of sharpening the focus of the bank and further strengthening its capital position. It announced the sale of ING Direct Canada to Scotiabank and the sale of its shareholding in US bank Capital One, and on October 9, also announced the sale of ING Direct UK to Barclays.

ING Bank continued to focus on maintaining a strong relationship with customers by providing an easy to access service, innovative distribution, and offering fair and transparent pricing. During the quarter, ING’s banking businesses in the Netherlands and other parts of the world won awards. ING Private Bank won Best Private Bank in the Netherlands, ING Luxembourg won Best Credit Card in that country and ING Vysya Bank in India was praised for its safety, its NPS initiatives and its pre-paid travel card in annual Banking, Finance and Insurance excellence awards, IPE-BSFI.

On the social media and mobile banking front, ING Belgium’s mobile ‘app’ which has just passed its first year milestone and its 100,000th download, has successfully boosted the bank’s Net Promoter Score (NPS) score. ING was praised as Best Social Media company in the Netherlands.

ING Direct had an active quarter, for example, opening a second bank café in Lyon, France and launching a new pension savings product in Australia which is simple, transparent and has no management or administration fees.


Operating results at ING Insurance declined due to pressure on the investment margin from de-risking measures and the low interest rate environment, as well as from lower Non-life results in the Benelux, due to higher disability claims.

The Insurance operating result of EUR 238 million was 21.7 % lower than the second quarter and 39.3% lower than the same quarter last year.

The underlying result before tax was EUR 44 million and it continued to be affected by losses on hedges, as ING Insurance maintained its focus on protecting regulatory capital amid volatile markets.

Administrative expenses for Life & Investment Management increased 2.5% (excluding currency effects) compared with a year ago, but they were down 1.7% from the second quarter, reflecting continued focus on cost control in all regions.

Insurance sales (APE) declined compared to the third quarter last year and the previous quarter (on a constant currency basis) due to lower sales in the Benelux.

As stated above in the Chairman’s statement, ING’s Asian insurance and investment management divestment programme is making progress.

After the close of the third quarter, ING announced, in October, it had reached an agreement to sell its life insurance, general insurance, pension and financial planning units in Hong Kong and Macau, and its life insurance operation in Thailand to Pacific Century Group (PCG) for EUR 1.64 billion. IM’s fund management businesses in Hong Kong and Thailand were outside the scope of this transaction. ING also reached an agreement with AIA Group Ltd. (AIA) on the sale of ING’s insurance operations in Malaysia, which include its life insurance business, its market-leading employee benefits business and its 60-percent stake in ING Public Takaful Ehsan Berhad for approximately EUR 1.3 billion.

ING also announced that it had reached an agreement for the sale of its 33.3% stake in China Merchants Fund, an investment management joint venture, to its joint venture partners China Merchants Bank Co., Ltd., and China Merchants Securities Co., Ltd.

Insurance continued to use insights from its Net Promoter Score (NPS) programme to make process improvements. Insurance units in Europe and Asia have been revising their written customer communications to ensure the language used is clear and free of jargon. They are also using electronic communications such as email more frequently to improve customer contact. In the Czech Republic and Slovakia, customers have responded very positively to ING’s efforts to increase transparency and modernise its communications processes.

In September, ING’s Czech insurance business was awarded the titles of best insurance business and most customer-friendly insurance company in 2012 by a leading financial newspaper in the country.

In line with ING Insurance/Investment Management’s strategy to make it easier for its customers, NN launched no excess car insurance in the Netherlands.

*Results have been restated to reflect that the Asia/Pacific Insurance and Investment Management businesses (and the Corporate Line results attributable to them) are now included under net result from discontinued operations. The sales process for these businesses has progressed to a stage that requires such classification under IFRS accounting.

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