ING Group
amsterdam : INGA

May 05, 2011 01:09 ET

ING posts solid increase in underlying net profit to EUR 1,492 million

AMSTERDAM, NETHERLANDS--(Marketwire - May 5, 2011) -



* ING Group's underlying net profit growth was driven by continued strong performance in the Bank and a significant improvement in Insurance results. The Group's 1Q11 net result was EUR 1,381 million, or EUR 0.37 per share, including divestments and special items. The underlying return on equity improved to 14.7% (Bank 13.7%, Insurance 6.2%).

* Bank underlying result before tax rose 32.2% to EUR 1,695 million, fuelled by higher income and the continued normalisation of risk costs. The net interest margin remained healthy at 1.44%. Risk costs declined to EUR 332 million, or 42 bps of average RWA. The underlying cost/income ratio improved to 55.0% as expenses declined from 4Q10.

* Insurance operating result increased 35.5% to EUR 561 million, supported by higher sales and growth in AuM. The investment spread rose to 95 bps. Sales (APE) grew 11.4% versus 1Q10, or 8.0% excluding currency effects. The administrative expenses/operating income ratio improved to 40.0% on higher operating income and cost containment.

* Strong capital generation in ING Bank continued in 1Q11 with the Bank's core Tier 1 ratio increasing to 10.0%. ING will proceed with the planned repurchase of EUR 2 billion of core Tier 1 securities from the Dutch State on 13 May 2011. The total payment will amount to EUR 3 billion and includes a 50% repurchase premium.

"Both the Bank and the Insurance company posted strong results in the first quarter, illustrating clear progress on their respective performance improvement programmes as they prepare for their futures as stand-alone companies," said Jan Hommen, CEO of ING Group. "The restructuring of the Group is on track. We continue to work towards the full physical separation of the banking and insurance activities, and we are laying the groundwork this year for two IPOs of our US and European & Asian insurance businesses so that we will be ready to proceed with transactions when market conditions are favourable. We continue to explore strategic options for our Latin American insurance business, and we are taking steps to meet the other restructuring demands imposed by the European Commission, including the divestment of ING Direct USA and the carve-out of WestlandUtrecht Bank from our Dutch retail banking business."

"Despite the far-reaching restructuring that the company is going through, we have continued to show solid commercial growth across our franchises, which is a testimony to the dedication and professionalism of our staff as we work hard to maintain the loyalty of our customers. On that strong foundation, we have been able to show a rapid recovery as ING comes out of the financial crisis. We have improved efficiency and built up strong capital buffers in the Bank, while continuing to increase our lending to customers to support the economic recovery. As a result, ING is now in a position to repay a second tranche of support from the Dutch State out of retained earnings. And provided that this strong capital generation continues, we aim to repay the remaining support by May 2012 on terms that are acceptable to all stakeholders."

Key Figures
--------------------------------------+------+-------+------+-------+------
                                      | 1Q   | 1Q    |      | 4Q    |
                                      |2011  |2010(1)|Change|2010(1 |Change
--------------------------------------+------+-------+------+-------+------
 ING Group key figures (in EUR        |      |       |      |       |
 million)                             |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Underlying result before tax Group   | 2,156|  1,403| 53.7%|    671|221.3%
--------------------------------------+------+-------+------+-------+------
    of which Bank                     | 1,695|  1,282| 32.2%|  1,479| 14.6%
--------------------------------------+------+-------+------+-------+------
    of which Insurance                |   461|    121|281.0%|   -808|
--------------------------------------+------+-------+------+-------+------
 Underlying net result                | 1,492|    923| 61.6%|    341|337.5%
--------------------------------------+------+-------+------+-------+------
 Net result                           | 1,381|  1,230| 12.3%|    130|962.3%
--------------------------------------+------+-------+------+-------+------
 Net result per share (in EUR)(2)     |  0.37|   0.33| 12.1%|   0.03|  n.a.
--------------------------------------+------+-------+------+-------+------
 Total assets (end of period, in EUR  | 1,229|  1,236| -0.5%|  1,247| -1.4%
 billion)                             |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Shareholders' equity (end of period, |    40|     38|  5.7%|     41| -2.0%
 in EUR billion)                      |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Underlying return on equity based on | 14.7%|  10.3%|      |   3.3%|
 IFRS-EU equity(3)                    |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Banking key figures                  |      |       |      |       |
--------------------------------------+------+-------+------+-------+
 Interest margin                      | 1.44%|  1.42%|      |  1.47%|
--------------------------------------+------+-------+------+-------+
 Underlying cost/income ratio         | 55.0%|  57.4%|      |  57.2%|
--------------------------------------+------+-------+------+-------+
 Underlying risk costs in bp of       |    42|     60|      |     51|
 average RWA                          |      |       |      |       |
--------------------------------------+------+-------+------+-------+
 Core Tier 1 ratio                    | 10.0%|   8.4%|      |   9.6%|
--------------------------------------+------+-------+------+-------+
 Underlying return on equity based on | 13.7%|  11.7%|      |  13.5%|
 IFRS-EU equity(3)                    |      |       |      |       |
--------------------------------------+------+-------+------+-------+
 Insurance key figures                |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Operating result (in EUR million)    |   561|    414| 35.5%|    438| 28.1%
--------------------------------------+------+-------+------+-------+------
 Investment margin / life general     |    95|     84|      |     93|
 account assets (in bps)              |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Administrative expenses / operating  | 40.0%|  43.4%|      |  44.1%|
 income (Life & ING IM)               |      |       |      |       |
--------------------------------------+------+-------+------+-------+------
 Underlying return on equity based on |  6.2%|   0.8%|      | -15.7%|
 IFRS-EU equity(3)                    |      |       |      |       |
--------------------------------------+------+-------+------+-------+-----

The footnotes relating to 1-3 can be found on page 13 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, media conference call and webcast

Jan Hommen, Patrick Flynn and Koos Timmermans will discuss the results in an analyst and investor conference call on 5 May 2011 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 9031 (US) and via live audio webcast at www.ing.com.

A media conference call will be held on 5 May 2011 at 11:00 CET. Journalists are invited to join the conference 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 Q1 2011 results (Full press release in PDF)

ING Group Q1 2011 Quarterly Report (PDF)

ING Group Q1 2011 Analyst Presentation (PDF)

ING Group Q1 2011 Statistical Supplement (PDF)

ING Group Q1 2011 Historical Trend Data (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 1Q2011 interim 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) the implementation of ING's restructuring plan to separate banking and insurance operations, (4) 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, (5) the frequency and severity of insured loss events, (6) changes affecting mortality and morbidity levels and trends, (7) changes affecting persistency levels, (8) changes affecting interest rate levels, (9) changes affecting currency exchange rates, (10) changes in general competitive factors, (11) changes in laws and regulations, (12) changes in the policies of governments and/or regulatory authorities, (13) conclusions with regard to purchase accounting assumptions and methodologies, (14) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, and (15) 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.

PDF version of press release: http://hugin.info/130668/R/1512614/448264.pdf

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

Source: ING Group via Thomson Reuters ONE

[HUG#1512614]

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