Risk management creates value
Risk Management benefits ING shareholders directly by providing more efficient capitalisation, lower costs of risk and funding, and support for growth. Together this results in the ability to generate more economic profit.
The cost of capital is reduced by working closely with rating agencies and regulators to align capital requirements to risks, thereby reducing capital. Funding costs are kept low by ensuring that the debt market gives ING benefit for our conservative risk profile. Risk costs are mitigated by minimising losses and encouraging the diversification of risk. Being spread out across different areas contributes to lower risk and capital requirements.
Individual business units benefit from being part of a globally diversified group. Risk Management helps them lower funding costs, make use of the latest risk management tools and skills, and lower strategic risk, allowing business units to focus on their core expertise. This ultimately makes our businesses more competitive in their markets.
Sound risk management also supports growth. Risk measurement allows ING to identify portfolios generating economic value. Risk management can help identify the most economically profitable areas as well those businesses that are underperforming and in some cases need to be sold.