ING Group
amsterdam : INGA

August 08, 2012 01:22 ET

ING posts 2Q12 underlying net profit of EUR 1,045 million

AMSTERDAM, THE NETHERLANDS--(Marketwire - Aug 8, 2012) -

* ING Group's 2Q12 net result was EUR 1,171 million, or EUR 0.31 per share, including divestments and special items. The results of Asia Insurance/IM are reported as results from discontinued operations.

* Bank underlying result before tax amounted to EUR 995 million despite higher risk costs and de-risking measures.

* Insurance operating result improved to EUR 304 million. Underlying result before tax was EUR 229 million, including hedge gains and the change in the provision for separate account pension contracts in the Benelux.

* ING's capital position improved further. The Bank's core Tier 1 ratio strengthened to 11.1%. The Insurance IGD solvency ratio rose to 240%. Given ING's priority to repay the Dutch State, no interim dividend will be paid in 2012.

Chairman's Statement

"ING posted solid second-quarter results. In these uncertain times the financial strength of the company is our highest priority: capital, liquidity and funding have all improved," said Jan Hommen, CEO of ING Group. "As the eurozone crisis deteriorated, we accelerated our efforts to de-risk the investment portfolio at the Bank, and brought down our Spanish exposure to reduce the funding mismatch in that country. At Insurance, we continued to hedge to protect regulatory capital, leading to volatility in IFRS earnings."

"Provisions for loan losses at the Bank increased as the macroeconomic environment weakened, and the net interest margin declined, despite easing competition for savings. We increased our vigilance on costs, and expenses declined for the second consecutive quarter. Progress on balance sheet optimisation is gaining traction, with integration initiatives reaching EUR 7.2 billion in the seven months ended in July. Commercially, the Bank generated strong retail deposit growth of EUR 4.3 billion during the second quarter, further strengthening the funding profile. Demand for lending remains weak, but total lending rose modestly as ING continued to support clients with their financial needs."

"We continue to work tirelessly to deliver on our performance improvement plans and prepare our banking and insurance businesses for their independent futures. The sales process for our Insurance and Investment Management businesses in Asia is on track, and ING US made an important step with its inaugural benchmark debt issuance as it works to separate its funding and liquidity from the Group ahead of its planned IPO. For Insurance Europe, we are stepping up our efforts as we prepare for the base case of an IPO. As the Group moves forward with its transformation, our employees continue to place the utmost priority on the needs of our customers to deliver the exemplary service and products they require."

Key Figures(1)

                    |                    |             |
                    |2Q2012 2Q2011 Change|1Q2012 Change|1H2012 1H201 Change
--------------------+--------------------+-------------+-------------------
 ING Group key      |                    |             |
 figures            |                    |             |
 (in EUR million)   |                    |             |
                    |                    |             |
 Underlying result  | 1,224  1,617 -24.3%|   892  37.2%| 2,116 3,397 -37.7%
 before tax Group   |                    |             |
                    |                    |             |
    of which Bank   |   995  1,145 -13.1%| 1,126 -11.6%| 2,120 2,678 -20.8%
                    |                    |             |
    of which        |                    |             |
     Insurance      |   229    472 -51.5%|  -234       |   -4   719 -100.6%
                    |                    |             |
 Underlying net     |                    |             |
  result            | 1,045  1,271 -17.8%|   543  92.4%| 1,588 2,497 -36.4%
                    |                    |             |
 Net result         | 1,171  1,507 -22.3%|   680  72.2%| 1,851 2,888 -35.9%
                    |                    |             |
 Net result per     |                    |             |
  share             |  0.31   0.40 -22.5%|  0.18  72.2%|  0.49  0.76 -35.5%
 (in EUR)(2)        |                    |             |
                    |                    |             |
 Total assets (end  |                    |             |
 of                 |                    |             | 1,237 1,241  -0.3%
 period, in EUR     |                    | 1,242  -0.4%|
 billion)           |                    |             |
                    |                    |             |
 Shareholders'      |                    |             |
 equity             |                    |             |    51    40  25.4%
 (end of period     |                    |             |
 in EUR             |                    |    48   6.1%|
 billion)           |                    |             |
                    |                    |             |
 Underlying return  |                    |             |
 on equity based    |                    |             |  6.6% 12.4%
 on IFRS-           |  8.5%  12.7%       |  4.6%       |
 EU equity(4)       |                    |             |
--------------------+--------------------+-------------+-------------------
 Banking key figures|                    |             |
                    |                    |             |
 Underlying interest| 1.26%  1.38%       | 1.32%       | 1.29% 1.39%
 margin             |                    |             |
                    |                    |             |
 Underlying cost/   |                    |             |
 income ratio       | 58.4%  60.4%       | 58.8%       | 58.6% 58.1%
                    |                    |             |
                    |                    |             |
 Underlying risk    |                    |             |
 costs              |    72     43       |    59       |    65    39
 in bp of average   |                    |             |
 RWA                |                    |             |
                    |                    |             |
 Core Tier 1 ratio  |                    | 10.9%       | 11.1%  9.4%
                    |                    |             |
 Underlying return  |                    |             |
 on                 |                    |             |  8.2% 11.5%
 equity based on    |                    |             |
 IFRS-              |  7.9%  10.5%       |  8.6%       |
 EU equity(4)       |                    |             |
--------------------+--------------------+-------------+-------------------
 Insurance key      |                    |             |
 figures            |                    |             |
                    |                    |             |
 Operating result   |                    |             |
 (in                |   304    565 -46.2%|   258  17.8%|   562   918 -38.8%
 EUR million)       |                    |             |
                    |                    |             |
 Investment         |                    |             |
 margin/life        |                    |             |
 general account    |   133    119       |   134       |
 invested assets    |                    |             |
 (in                |                    |             |
 bps)( 3)           |                    |             |
                    |                    |             |
 Administrative     |                    |             | 47.7% 41.3%
 expenses /         |                    |             |
 operating          | 46.7%  39.4%       | 48.7%       |
 income (Life       |                    |             |
 ING IM)            |                    |             |
                    |                    |             |
 Underlying return  |                    |             |
 on                 |                    |             |  1.1%  5.5%
 equity based on    |                    |             |
 IFRS-EU            |  5.4%   8.1%       | -3.5%       |
 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 8 August 2012 at 9:00 CET. Members of the investment community can join the conference call at +31 20 794 8500 (NL), +44 207 190 1537 (UK) or +1 480 629 9031 (US) and via live audio webcast at www.ing.com.

A press conference will be held on 8 August 2012 at 11:00 CET. Journalists are invited to join the conference at ING Amsterdamse Poort, Bijlmerplein 888, Amsterdam. Journalists can also join in listen-only mode at +31 10 29 44 228 (NL) or + 44 203 365 3207(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 2Q2012 Results (Full press release in PDF)

ING Group 2Q2012 Results Analyst Presentation (PDF)

ING Group 2Q2012 Results Media Presentation (PDF)

ING Group 2Q2012 Results Quarterly Report (PDF)

ING Group 2Q2012 Results Group Statistical Supplement (PDF) (XLS)

ING Group 2Q2012 Results Historical Trend Data (PDF) (XLS)

ING Groep N.V. Condensed consolidated interim financial information for the period ended 30 June 2012 (PDF)

ING Bank N.V. Condensed consolidated interim financial information for the period ended 30 June 2012 (PDF)

ING Verzekeringen N.V. Condensed consolidated interim financial information for the period ended 30 June 2012 (PDF)

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 2011 ING Group Annual Accounts. 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 investor, 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, (17) changes in credit-ratings, (18) ING's ability to achieve projected operational synergies and (19) the other risks and uncertainties detailed in the Risk Factors section contained in the most recent annual report of ING Groep N.V. Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and, 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.

Full ING Group 2Q2012 Results Press Release in PDF: http://hugin.info/130668/R/1632484/523644.pdf

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: ING Group via Thomson Reuters ONE

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