ING Group
amsterdam : INGA

February 09, 2012 01:13 ET

ING posts 2011 underlying net profit of EUR 3,675 million

AMSTERDAM, THE NETHERLANDS--(Marketwire - Feb 9, 2012) -

* ING Group's full-year 2011 net result was EUR 5,766 million, or EUR 1.52 per share, including divestments, discontinued operations and special items. The 4Q11 underlying net result was EUR -516 million. The 4Q11 net result was EUR 1,186 million, or EUR 0.31 per share.

* Bank underlying result before tax came in at EUR 793 million in 4Q11, including EUR 79 million of realised losses from selective de-risking at ING Direct and EUR 133 million of re-impairments on Greek government bonds. Despite pressure on savings margins, the net interest margin rose to 1.42% from 1.37% in 3Q11. Risk costs were EUR 530 million, or 65 bps of average RWA, mainly reflecting higher losses on mid-corporate and SME lending in the Benelux.

* Insurance underlying loss before tax was EUR 1,348 million in 4Q11, mainly reflecting the previously announced charge for the US Closed Block VA assumption changes, as well as losses on hedges in place to protect regulatory capital. The operating result rose 20.4% from 4Q10 to EUR 478 million driven by a higher investment margin, a decline in expenses and lower interest costs. The investment spread rose to 106 bps fuelled primarily by the Benelux.

* Given the uncertain financial environment, increasing regulatory requirements and ING's priority to repay the Dutch State, the Executive Board will not propose to pay a dividend over 2011 at the annual General Meeting in May 2012.

Chairman's Statement

"The economic environment became more challenging in the fourth quarter of 2011. The financial crisis spread further into the real economy, and uncertainty around the European sovereign debt crisis continued to erode confidence and amplify market volatility. Despite this challenging backdrop and its inevitable impact on results, ING posted 15.1% higher full-year underlying earnings in 2011 compared with 2010," said Jan Hommen, CEO of ING Group.

"During the fourth quarter, income at the Bank was affected by losses related to further de-risking of the investment portfolio, as well as re-impairments on Greek government bonds and other market impacts. However, commercial performance remained robust. Funds entrusted grew by EUR 8.1 billion, underscoring the strong deposit-gathering ability of our franchise amid continued competition for savings in our home markets. Our strong funding profile enabled ING Bank to continue to support customers' financing needs. The capital position of the Bank remained strong, with the core Tier 1 ratio stable at 9.6% after absorbing the impact of higher capital requirements under CRD III which came into effect at year-end. As the economic recovery is expected to remain weak in 2012, we will continue to take a prudent approach to risk, capital and funding while working towards our Ambition 2015 targets."

"Our Insurance results were severely impacted by the update to policyholder behaviour assumptions on the US Closed Block VA, as announced in December, as well as losses on hedges in place to protect regulatory capital given the ongoing market turmoil. These factors led to a fourth-quarter loss on an underlying basis. However, operating results were up 20.4% from a year ago, demonstrating cost discipline and strong progress on performance improvement programmes. Significant milestones in the restructuring process were achieved in 2011, including the sale of Insurance Latin America and the completion of the legal and operational separation of Insurance US, Europe and Asia. In 2012, we will continue to focus on improving returns while preparing these businesses for stand-alone futures."

Key Figures

                |        4Q2010       |              |        FY2010
                |4Q2011   (1)  Change |1Q2011  Change|FY2011   (1)   Change
----------------+---------------------+--------------+---------------------
ING Group key   |                     |              |
figures (in EUR |                     |              |
million)        |                     |              |
                |                     |              |
Underlying      |                     |              |
result before   |  -555    554 -200.2%| 1,593 -134.8%| 5,055   4,666   8.3%
tax             |                     |              |
                |                     |              |
Underlying net  |  -516    252 -304.9%| 1,262 -140.9%| 3,675   3,192  15.1%
result          |                     |              |
                |                     |              |
Net result      | 1,186    130  811.7%| 1,692  -29.9%| 5,766   2,810 105.2%
                |                     |              |
Net result per  |                     |              |
share (in       |  0.31   0.03  933.3%|  0.45  -31.1%|  1.52    0.74 105.4%
EUR)(2)         |                     |              |
                |                     |              |
Total assets    |                     |              |
(end of period, |                     | 1,282   -0.2%| 1,279   1,247   2.6%
in EUR billion) |                     |              |
                |                     |              |
Shareholders'   |                     |              |
equity (end of  |                     |    45    4.8%|    47      41  14.1%
period, in EUR  |                     |              |
billion)        |                     |              |
                |                     |              |
Underlying      |                     |              |
return on equity| -4.5%    2.4%       | 11.9%        |  8.7%    8.1%
based on IFRS-EU|                     |              |
equity          |                     |              |
----------------+---------------------+--------------+--------------------
Banking key     |                     |              |
figures         |                     |              |
                |                     |              |
Underlying      |                     |              |
result before   |   793  1,428  -44.5%| 1,031  -23.1%| 4,740   5,738 -17.4%
tax (in EUR     |                     |              |
million)        |                     |              |
                |                     |              |
Interest margin | 1.42%   1.47%       | 1.37%        | 1.41%   1.42%
                |                     |              |
Underlying      |                     |              |
cost/income     | 64.3%   57.1%       | 61.3%        | 59.6%   55.5%
ratio           |                     |              |
                |                     |              |
Underlying risk |                     |              |
costs in bp of  |    65     51        |    55        |    52      53
average RWA     |                     |              |
                |                     |              |
Core Tier 1     |                     |  9.6%        |  9.6%    9.6%
ratio           |                     |              |
                |                     |              |
Underlying      |                     |              |
return on equity|  6.8%   13.1%       |  8.3%        | 10.0%   12.9%
based on IFRS-EU|                     |              |
equity          |                     |              |
----------------+---------------------+--------------+--------------------
Insurance key   |                     |              |
figures         |                     |              |
                |                     |              |
Underlying      |                     |              |
result before   |-1,348    -873       |   563 -339.4%|   314  -1.072
tax (in EUR     |                     |              |
million)        |                     |              |
                |                     |              |
Operating result|   478    397   20.4%|   527   -9.3%| 2,205   1,558  41.5%
(in EUR million)|                     |              |
                |                     |              |
Investment      |                     |              |
margin / life   |                     |              |
general account |   106      90       |   103        |
assets (in      |                     |              |
bps)(3)         |                     |              |
                |                     |              |
Administrative  |                     |              |
expenses /      | 41.8%     43.4%     | 40.5%        | 39.8%   43.7%
operating income|                     |              |
(Life & ING IM) |                     |              |
                |                     |              |
Underlying      |                     |              |
return on equity|-19.1%    -16.7%     | 10.9%        |  1.4%   -5.1%
based on IFRS-EU|                     |              |
equity(4)       |                     |              |
----------------+---------------------+--------------+----------------------

The footnotes relating to 1-4 can be found on page 14 of the full press release as attached to this message. Note: Underlying figures are non-GAAP measures and are derived from figures according to IFRS-EU by excluding impact from divestments and special items.

Investor conference call, press conference and webcast

Jan Hommen, Patrick Flynn, Wilfred Nagel and Matt Rider will discuss the results in an analyst and investor conference call on 9 February 2012 at 9:00 CET. Members of the investment community can join the conference call at 20 794 8500 (NL), 207 190 1537 (UK) or 480 629 9676 (US) and via live audio webcast at www.ing.com.

A press conference will be held on 9 February 2012 at 11:00 CET. Journalists are invited to join the conference at ING House, Amstelveenseweg 500, Amsterdam. Journalists can also join in listen-only mode at 20 794 8500 (NL) or 20 7190 1537 (UK) and via live audio webcast at www.ing.com.

Additional information is available in the following documents which can be downloaded from around 7:00 am CET from the following links at www.ing.com :

ING Group 4Q2011 Results (Full Press Release in PDF)

ING Group 4Q2011 Analyst Presentation (PDF)

ING Group 4Q2011 Media Presentation (PDF)

ING Group 4Q2011 Quarterly Report (PDF)

ING Group 4Q2011 Group Statistical Supplement (PDF) (XLS)

ING Group 4Q2011 Historical Trend Data (PDF) (XLS)

IMPORTANT LEGAL INFORMATION

ING Group's Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS-EU').

In preparing the financial information in this document, the same accounting principles are applied as in the 3Q2011 ING Group Interim Accounts. The Financial statements for 2011 are in progress and may be subject to adjustments from subsequent events. All figures in this document are unaudited. Small differences are possible in the tables due to rounding.

Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in ING's core markets, (2) changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro, (4) the implementation of ING's restructuring plan to separate banking and insurance operations, (5) changes in the availability of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit markets generally, including changes in borrower and counterparty creditworthiness, (6) the frequency and severity of insured loss events, (7) changes affecting mortality and morbidity levels and trends, (8) changes affecting persistency levels, (9) changes affecting interest rate levels, (10) changes affecting currency exchange rates, (11) changes in customer and policyholder behaviour, (12) changes in general competitive factors, (13) changes in laws and regulations, (14) changes in the policies of governments and/or regulatory authorities, (15) conclusions with regard to purchase accounting assumptions and methodologies, (16) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, and (17) ING's ability to achieve projected operational synergies. ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.


PDF version of full ING Group 4Q2011 Press Release : http://hugin.info/130668/R/1583931/495430.pdf


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Source: ING Group via Thomson Reuters ONE

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