SOURCE: ING Group

August 12, 2009 01:16 ET

ING posts 2Q underlying net profit of EUR 229 million

AMSTERDAM, NETHERLANDS--(Marketwire - August 12, 2009) -


*  2Q09 underlying net profi t of EUR 229 million shows improvement
   from underlying net loss of EUR -305 million in 1Q09
   - Bank interest result up 19.4% versus 2Q08 and 4.7% versus 1Q09
   on improvements in savings and lending margins
   - Group operating expenses down 5.5% from the second quarter of
   2008 and 2.4% from the fi rst quarter of 2009
   - Results dampened by market impacts including EUR -584 million of
   real estate revaluations
   - EUR -763 million of pre-tax hedge results offset by positive
   equity-related DAC unlocking and unrealised gains through equity
   - Net addition to loan loss provisions of EUR 852 million at ING
   Bank, equivalent to 118 bps of average credit-risk weighted assets
   - Divestments and special items totalled EUR -159 million,
   bringing the quarterly net result to EUR 71 million or EUR 0.03
   EPS
*  De-leveraging, de-risking and cost-containment measures
   progressing on track or ahead of targets
   - Cumulative reduction in Bank balance sheet of EUR 164 billion,
   or 15%, since 3Q08 exceeds target for 10% reduction
   - 53% of targeted EUR 1 billion cost savings achieved in fi rst
   half of 2009; cost savings expected to reach EUR 1.3 billion for
   full year
   - Total FTE reduction of 8,219 realised by end of 2Q09, ahead of
   7,000 planned reductions for full-year 2009
   - Risk-reduction efforts help offset credit rating migration,
   limiting the increase in risk-weighted assets to 1.7%
*  All key capital and leverage ratios robust during the quarter;
   shareholders' equity increases by EUR 2.9 billion
   - All key capital and leverage ratios remained strong during the
   quarter; Bank Tier 1 ratio of 9.4% and core Tier 1 ratio of 7.3%
   - Shareholders' equity increased by EUR 2.9 billion driven by
   tightening credit spreads and the uptick in equity markets
   - Bank asset leverage ratio of 28.9x at the end of 2Q09, down from
   30.1x at the end of 1Q09
   - ING has decided not to pay an interim dividend on common shares
   over 2009


Chairman's Statement

"ING posted solid commercial performance in the quarter, as a more favourable interest rate environment and improved margins on savings and lending led to a 19.4% increase in interest income at the banking operations. In Insurance, the recovery of equity markets in the second quarter helped boost fees on assets under management. However, sales of investment-linked products remained subdued as customers awaited a sustained market rally or opted for traditional life products," said Jan Hommen, CEO of ING.

"Benefi ts of Back to Basics and improvements in equity and credit markets helped the Group return to profi t with an underlying net result of EUR 229 million. However, market impacts and the weaker economic environment continue to strain ING's results. The uptick in equity markets led to a reversal of some of the DAC unlocking seen in the fi rst quarter, but was more than offset by negative results on hedges to preserve regulatory capital. As the real economy was impacted, credit quality worsened, leading to a rise in risk costs, while lower property prices in many markets triggered negative revaluations on real estate, which are immediately refl ected in the P&L."

"While we begin to see signs of recovery in fi nancial markets, economic conditions are expected to remain challenging for some time. Against this backdrop our Back to Basics programme is our top priority and progress is ahead of plans. Our employees have managed these aggressive cost cuts with professionalism and a continued commitment to our customers. Of our target to reduce operating expenses by EUR 1 billion this year, EUR 525 million was already achieved in the fi rst half and we now expect cost savings to reach EUR 1.3 billion driven by further reductions in infrastructure costs. Headcount has been reduced by 8,219 FTEs year-to-date, well ahead of the original plan to reduce 7,000 FTEs this year. Deleveraging of the balance sheet is also ahead of plan: the bank has achieved a total balance sheet reduction of EUR 164 billion, exceeding the EUR 110 billion target."

"We have made strides to reduce risk, stabilise the capital base and simplify our organisation in the fi rst half. The merger of ING's Dutch retail banking operations is well on track and a programme to integrate ING's Dutch insurance operations has been announced with positive earnings contribution in 2010. In line with our Back to Basics strategy, we have also agreed to sell several non-core or subscale businesses in our efforts to streamline the Group and sharpen our strategic focus. We are currently reviewing additional strategic options to facilitate our continued transformation and realise our ambition to repay the Dutch State. The process will also support ING's efforts to meet the restructuring requirements set out by the European Commission for fi nancial institutions that received state aid in the context of the fi nancial crisis. In the meantime, we continue to focus on providing fi rst-rate service to our customers and providing them with simpler and more transparent products."


The full report including tables can be downloaded from the following link:

2009 Second Quarter Results ING Group: http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=404946_EN&RevisionSelectionMethod=latestReleased

The following documents can be downloaded from around 07.30 am CET from the following links:

Quarterly Report: http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=404948_EN&RevisionSelectionMethod=latestReleased

Analyst Presentation: http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=404947_EN&RevisionSelectionMethod=latestReleased

Press Presentation: http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=405099_EN&RevisionSelectionMethod=latestReleased

Group Statistical Supplement; http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=404950_EN&RevisionSelectionMethod=latestReleased

US Statistical Supplement: http://www.ing.com/cms/idc_cgi_isapi.dll?IdcService=GET_FILE&dDocName=404978_EN&RevisionSelectionMethod=latestReleased


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2009 Second Quarter Results ING Group: http://hugin.info/130668/R/1334075/316523.pdf

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