ING Group

amsterdam : INGA


May 08, 2013 01:32 ET

ING records 1Q13 underlying net profit of EUR 800 million

AMSTERDAM, NETHERLANDS--(Marketwired - May 8, 2013) -


Group 1Q13 underlying net profit rose to EUR 800 million from EUR 579 million in 1Q12 and EUR 483 million in 4Q12

- Net profit increased to EUR 1,804 million, or EUR 0.47 per share, after special items and net gains on divestments

Bank underlying result before tax rose to EUR 1,169 million from EUR 1,151 million in 1Q12, EUR 283 million in 4Q12

- 1Q13 underlying result before tax reflects improvement in net interest margin and impact of cost-saving initiatives

- Net interest margin up to 1.38% on loan book repricing, lower average balance sheet and higher Financial Markets interest result

- Operating expenses were down 8.8% from 4Q12 and stable year-on-year; cost/income ratio improved to 55.2%

- Risk costs remained elevated at EUR 561 million, or 81 bps of average RWA, but improved from 85 bps in 4Q12

Insurance EurAsia 1Q13 operating result EUR 79 million, versus EUR 129 million in 1Q12 and EUR 161 million in 4Q12

- Operating results continued to be affected by lower reinvestment yields and a decline in Non-life results in the Netherlands

- Investment spread declined to 94 bps from 99 bps in 4Q12, mainly reflecting the low yield environment

- Underlying result before tax improved versus both 1Q12 and 4Q12 to EUR 85 million due to lower impact of market-related items

- Sales were on par with 1Q12 but jumped 18.8% from 4Q12 driven by seasonally higher corporate pension renewals in NL

Insurance ING U.S. 1Q13 operating result EUR 87 million, versus EUR 119 million in 1Q12 and EUR 137 million in 4Q12

- Solid quarter for ongoing Insurance/IM businesses with strong net inflows, higher AuM fees, and a resilient investment margin

- Funding costs increased as more long-term debt was issued replacing shorter- term and internal debt in preparation for the IPO

- Sales grew 15.1% from 1Q12 driven by the Retirement business and rose 15.7% from 4Q12 on seasonality in Employee Benefits

- Underlying result before tax was EUR -192 million reflecting losses on Closed Block VA equity hedges in place to protect capital

ING maintained strong capital ratios; shareholders' equity rose by EUR 2.7 billion to EUR 54.4 billion

- Bank core Tier 1 ratio strengthened from 11.9% to 12.3% on 1Q13; or 10.9% on a fully-loaded Basel III basis

- Insurance EurAsia IGD Solvency I ratio rose to 292% after divestments; US capitalisation targets estimated to be met at 31 March

- Successful NYSE listing of ING U.S. on 2 May 2013 raised EUR 0.5 billion of proceeds for the Group; reduced Group stake to 75%

Chairman's Statement

"ING has demonstrated steady progress so far this year on the Group's restructuring, culminating with the successful IPO of our US insurance business, which was completed last week. The transaction satisfied our agreement with the European Commission to sell 25% of the US business before the year-end deadline, while raising EUR 0.5 billion of proceeds for the Group," said Jan Hommen, CEO of ING Group.

"With that milestone completed, we are now accelerating preparations for the base case of an IPO of our European insurance company, with the aim of being ready to go to the market in 2014."

"At the same time, the Bank has continued to show strong capital generation, with a Basel III core Tier 1 ratio of 10.9%, well above our 10% target, allowing us to plan another EUR 1.5 billion upstream to the Group in the second quarter. This, combined with the US IPO proceeds, is expected to reduce the double leverage in the holding company from EUR 7 billion to EUR 5 billion, taking us a step closer to completing the financial and governance separation of the banking and insurance businesses."

"ING Bank is also making good progress on its strategic priorities. After taking major strides last year to optimise the balance sheet and de-risk the investment portfolio, we are now comfortably meeting our capital, funding and liquidity targets, giving us room to selectively grow our loan book. Net loan growth was a moderate EUR 2.5 billion in the quarter, following a contraction in the second half of 2012, while net funds entrusted grew by an impressive EUR 16.5 billion."

"Earnings at the Bank rebounded from the fourth quarter, supported by a recovery in the net interest margin to 138 bps as the loan book reprices and lending margins improved. Expenses remained under control as we continued to implement our cost-saving initiatives, bringing the cost/income ratio down to 55.2% versus our target of 50-53% for 2015. Risk costs remained elevated amid the weak economic climate in Europe, but improved compared with the fourth quarter to 81 bps of average risk-weighted assets. The return on IFRS-EU equity for the Bank also improved to 9.0% in the first quarter, approaching our target range of 10-13% for 2015."

"Total underlying net profit for the Group was EUR 800 million in the first quarter, up 38.2% from one year ago and 65.6% from the fourth quarter of 2012. Results from Insurance EurAsia remained under pressure amid the low yield environment. The ongoing businesses of ING U.S. posted solid operating results, driven by strong net inflows and growth in assets under management, while underlying results were dampened by hedge losses in the Closed Block VA as equity markets rose."

"As we look to the months ahead, we will continue to focus on driving our operating performance as we prepare the companies for standalone futures, while keeping our customers at the heart of everything we do."

ING Group key figures
                                 |                       |
                                 |1Q2013 1Q2012(1) Change|4Q2012(1)  Change
---------------------------------+-----------------------+-----------------
 Profit and loss data (in EUR    |                       |
 million)                        |                       |
                                 |                       |
 Underlying result before tax    | 1,167       936  24.7%|      575  103.0%
                                 |                       |
 of which Bank                   | 1,169     1,151   1.6%|      283  313.1%
                                 |                       |
 of which Insurance EurAsia      |    85       -43       |      -32
                                 |                       |
 of which Insurance ING U.S.     |  -192      -199       |      304 -163.2%
                                 |                       |
 of which Insurance Other        |   104        27 285.2%|       20  420.0%
                                 |                       |
 Underlying net result           |   800       579  38.2%|      483   65.6%
                                 |                       |
 Divestments, discontinued       |                       |
 Operations and special items(2) | 1,004       149       |       997
---------------------------------+-----------------------+-----------------
 Net result                      | 1,804       728 147.8%|    1,481   21.8%
---------------------------------+-----------------------+-----------------
 Net result per share (in EUR)(3)|  0.47      0.19 147.4%|     0.39   20.5%
---------------------------------+-----------------------+-----------------
 Capital ratios (end of period)  |                       |
                                 |                       |
 Shareholders' equity (in EUR    |    54        46  18.7%|       52    5.1%
 billion)                        |                       |
                                 |                       |
 ING Group debt/equity ratio     | 10.8%     13.8%       |    11.3%
                                 |                       |
 Bank core Tier 1 ratio          | 12.3%     10.9%       |    11.9%
                                 |                       |
 Insurance EurAsia IGD Solvency I|  292%      231%       |     272%
 ratio                           |                       |
---------------------------------+-----------------------+-----------------
 Other data (end of period)      |                       |
                                 |                       |
 Underlying return on equity     |                       |
 based on IFRS-EU equity(4)      |  6.0%      5.0%       |     3.8%
 Employees (FTEs, end of period, |83,032    87,148  -4.7%|   84,064   -1,2%
 adjusted for divestments)       |                       |
---------------------------------+-----------------------+-----------------
( )
(1) The comparative figures of this period have been restated to reflect
    the new pension accounting requirements under IFRS which took effect
    on 1 January 2013.
(2) The results of Insurance/IM Asia have been transferred to "net result
    from discontinued operations".
(3) Result per share differs from IFRS earnings per share in respect of
    attributions to the core Tier 1 securities.
(4) Annualised underlying net result divided by average IFRS-EU equity.

Investor conference call, media conference call and webcasts

Jan Hommen, Patrick Flynn and Wilfred Nagel will discuss the results in an analyst and investor conference call on 8 May 2013 at 9:00 a.m. 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.

Jan Hommen, Patrick Flynn and Wilfred Nagel will also discuss the results in a press conference call on 8 May 2013 at 11:00 a.m. CET. Journalists can participate in the call at +31 20 531 5846 (NL) or +44 203 365 3210 (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 at www.ing.com/qr :

ING Group Results Full Press Release in PDF

ING Group Analyst Presentation

ING Group Quarterly Report

ING Group Group Statistical Supplement

ING Group Historical Trend Data

Condensed consolidated interim financial information for the period ended 31 March 2013

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 1Q2013 ING Group Interim Accounts.

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.

PDF version of full results press release :

http://hugin.info/130668/R/1700185/561149.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#1700185]

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