ING posts 3Q2020 net result of €788 million
- ING 3Q2020 result before tax of €1,204 million
- Resilient result, with increased fee income and continued operational cost control; net interest income declines due to liability margin pressure, subdued lending growth and negative foreign currency impact
- Result reflects significantly lower risk costs compared to 2Q2020, and impairments on our equity stake in TMB and on capitalised software
- ING provides capital update with revised CET1 ambition and distribution policy
- New CET1 ratio ambition of around 12.5%, implying a ~200 bps buffer over current minimum regulatory requirements; our current CET1 ratio is 15.3%
- New distribution policy of a 50% pay-out ratio of resilient net profit, in cash or a combination of cash and share repurchases
“Helping colleagues, customers and communities safely through the Covid-19 pandemic remains a top priority, and I’m proud of how ING has stepped up to deal with this challenge,” said Steven van Rijswijk, CEO of ING Group. “The pandemic continues to have a significant impact everywhere, with the second wave in Europe and the US putting further pressure on consumers and businesses. Looking back, ING’s third-quarter results were resilient, with increased fee income from diversified income sources, coupled with good cost control and lower risk costs. We saw a reduction in net interest income resulting from margin pressure on liabilities combined with lower lending demand. Our easy, smart and personal digital-first offering keeps attracting customers, with a net increase of 213,000 primary customers over the quarter.
“Our ambition to keep transforming into a leading data-driven digital bank remains firm. However, the challenging external environment requires that we remain flexible in ‘how’ and ‘where’ we deliver our Think Forward strategy. We are therefore refocusing our activities to ensure faster client delivery and a continuously improving end-to-end digital customer experience. In Wholesale Banking, we will concentrate even more on core clients and simplify our geographical footprint, which will require fewer staff . This includes closing our offices in South America and some in Asia, while continuing to serve the international needs of clients from our regional hubs.
“In further developing our digital universal bank we’ll focus our efforts on three things: the global use of ING’s technology foundation – which includes our shared data lakes, cloud and modular IT building blocks; the re-use where possible of already developed mobile app components; and the rollout of global digital product offerings in the areas of insurance, investments and consumer lending. We’ve therefore decided to considerably reduce the scope of Maggie, a programme launched to provide a standardised customer experience and integrate the product offering in four of our European Challenger countries. The decision has been taken in light of the current economic headwinds and our learnings from the complexities and costs of cross-border system and product integration.
“The change in Maggie’s scope has led to an impairment of €140 million, primarily related to capitalised software development costs. The refocusing of our wholesale and retail activities will result in a headcount reduction of approximately 1,000 FTEs by year-end 2021.
“Today, we provide a capital update. Our new long-term CET1 ratio ambition level of around 12.5% translates into a ~200 bps buffer over current minimum regulatory requirements. We will manage well above this ambition level while Covid-19-related uncertainties remain. We also introduce a new distribution policy of a 50% pay-out ratio of resilient net profit, in the form of cash or a combination of cash and share repurchases. We believe this offers a sustainable and attractive return, and we will periodically review whether ING has structural excess capital available to return to shareholders. The execution of this policy will comply with prevailing ECB recommendations on shareholder distributions.
“We stay focused on our gatekeeper role and ensuring the security and compliance of the bank. Thanks to our KYC enhancements, ten more countries are now connected to our adverse media screening tool. We also support initiatives to collectively fight financial crime together with other banks and law enforcement and regulatory authorities. And we remain resolute in our efforts to combat the climate crisis and contribute to a low-carbon society. Our second Terra report now includes our targets for how we will align our lending with the Paris climate goals in our nine most carbon-intensive sectors. I’m proud of the progress we continue to make, and how we’re living up to the transformational role we play in the economy and in society.”
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ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s more than 55,000 employees offer retail and wholesale banking services to customers in over 40 countries.
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Head of Media Relations, Retail Banking Benelux, Corporate governance
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ING Group Investor Relations