ING Group
amsterdam : INGA

August 04, 2011 01:31 ET

ING's 2Q underlying net profit rises 19.7% to EUR 1,528 million

AMSTERDAM, NETHERLANDS--(Marketwire - Aug 4, 2011) -


* ING Group's 2Q11 net result was EUR 1,507 million, or EUR 0.40 per share, including divestments, discontinued operations and special items. The underlying return on IFRS-EU equity for the first six months of 2011 rose to 14.8%.

* Bank reported an underlying result before tax of EUR 1,304 million, including EUR 187 million impairment of Greek government bonds. The net interest margin was healthy at 1.42% and client balances increased for the eighth straight quarter. Risk costs fell 20.4% versus 2Q10. Operating expenses declined for the second consecutive quarter, but increased year-on-year. The underlying cost/income ratio was 59.2%, or 54.6% excluding market impacts.

* Insurance operating result rose 82.5% to EUR 690 million, fuelled by increases in the investment and technical margins. The investment spread rose to 99 basis points, primarily on reinvestments and higher dividend income. The administrative expenses/operating income ratio improved to 38.0%. The underlying result before tax was strong at EUR 673 million, despite EUR 123 million of impairments on Greek government bonds.

* ING maintained strong capital ratios during the quarter following the 13 May 2011 payment of EUR 3 billion to the Dutch State. The Bank's core Tier 1 ratio remained robust at 9.4%, or 10.7% on a pro-forma basis including the impact of announced divestments. The Insurance IGD solvency ratio strengthened to 252%.

* Given the uncertain financial environment, increasing regulatory requirements and ING's priority to repurchase the remaining outstanding core Tier 1 securities, no interim dividend will be paid in 2011.


"ING reached important milestones in the second quarter as we work towards the separation of the Group and the establishment of strong stand-alone banking and insurance companies," said Jan Hommen, CEO of ING Group. "In May we paid EUR 3 billion (including EUR 1 billion premium) to the Dutch State, while maintaining strong capital buffers to withstand potential shocks given the uncertain economic environment. We reached an agreement to sell ING Direct USA, meeting one of the principal restructuring requirements imposed by the European Commission. And last week we announced an agreement to sell our Latin American life and pension businesses for EUR 2.7 billion, marking the first major step in the divestment of the Insurance and Investment Management activities."

"The US and European & Asian insurance businesses are making good progress on performance improvement initiatives as they prepare for separate IPOs. The operating profit for Insurance increased compared with a year ago, as measures to improve returns continue to gain momentum. The Bank posted another strong quarter, as margins held up well and we continued to grow volumes in savings and lending despite the challenging operating conditions in the second quarter. As the economic environment and financial markets remain uncertain, we will reinforce our vigilance on costs by focusing on structural improvements in our processes and organisation, while continuing to invest responsibly in the growth of our franchises for the long-term benefit of our customers."

Key        |    |      |      |      |      |      |      |         |
 Figures(1)|    |      |      |      |      |      |      |         |
-----------+----+------+------+------+------+------+------+---------+-----
               2Q2011|2Q2010(2)|Change|1Q2011|Change|1H2011|1H2010(2)Change
-----------------+------+------+------+------+------+------+---------+-----
 ING Group key   |      |      |      |      |      |      |         |
 figures (in EUR |      |      |      |      |      |      |         |
 million)        |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying      |      |      |      |      |      | 4,100|    2,965|38.3%
 result before   | 1,977| 1,625| 21.6%| 2,123| -6.9%|      |         |
 tax Group       |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
    of which Bank| 1,304| 1,607|-18.9%| 1,695|-23.1%| 2,999|    2,889| 3.8%
-----------------+------+------+------+------+------+------+---------+-----
    of which     |   673|    18|  n.a.|   428| 57.2%| 1,102|       76| n.a.
 Insurance       |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying net  | 1,528| 1,277| 19.7%| 1,463|  4.4%| 2,991|    2,150|39.1%
 result          |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Net result      | 1,507| 1,211| 24.4%| 1,381|  9.1%| 2,888|    2,441|18.3%
-----------------+------+------+------+------+------+------+---------+-----
 Net result per  |      |      |      |      |      |  0.76|     0.65|16.9%
 share (in       |  0.40|  0.32| 25.0%|  0.37|  8.1%|      |         |
 EUR)(3)         |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Total assets    |      |      |      |      |      | 1,241|    1,273|-2.5%
 (end of period, |      |      |      | 1,229|  0.9%|      |         |
 in EUR billion) |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Shareholders'   |      |      |      |      |      |    40|       41|-2.6%
 equity (end of  |      |      |      |    40|  0.6%|      |         |
 period, in EUR  |      |      |      |      |      |      |         |
 billion)        |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying      |      |      |      |      |      | 14.8%|    11.4%|
 return on equity| 15.2%| 12.9%|      | 14.5%|      |      |         |
 based on IFRS-EU|      |      |      |      |      |      |         |
 equity(4)       |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Banking key     |      |      |      |      |      |      |         |
 figures         |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Interest margin | 1.42%| 1.36%|      | 1.44%|      | 1.43%|    1.39%|
-----------------+------+------+------+------+------+------+---------+-----
 Underlying      |      |      |      |      |      | 57.0%|    55.0%|
 cost/income     | 59.2%| 52.7%|      | 55.0%|      |      |         |
 ratio           |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying risk |      |      |      |      |      |    44|       58|
 costs in bp of  |    47|    55|      |    42|      |      |         |
 average RWA     |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Core Tier 1     |      |      |      | 10.0%|      |  9.4%|     8.6%|
 ratio           |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying      |      |      |      |      |      | 12.7%|    13.0%|
 return on equity| 11.7%| 14.2%|      | 13.7%|      |      |         |
 based on IFRS-EU|      |      |      |      |      |      |         |
 equity(4)       |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Insurance key   |      |      |      |      |      |      |         |
 figures         |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Operating result|   690|   378| 82.5%|   511| 35.0%| 1,201|      747|60.8%
 (in EUR million)|      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Investment      |      |      |      |      |      |      |         |
 margin / life   |    99|    79|      |    92|      |      |         |
 general account |      |      |      |      |      |      |         |
 assets (in bps) |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Administrative  |      |      |      |      |      | 38.9%|    44.3%|
 expenses /      | 38.0%| 44.8%|      | 39.9%|      |      |         |
 operating income|      |      |      |      |      |      |         |
 (Life & ING IM) |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----
 Underlying      |      |      |      |      |      |  8.4%|     1.3%|
 return on equity| 11.3%|  2.8%|      |  5.6%|      |      |         |
 based on IFRS-EU|      |      |      |      |      |      |         |
 equity(4)       |      |      |      |      |      |      |         |
-----------------+------+------+------+------+------+------+---------+-----


The footnotes relating to 1-4 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 4 August 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 press conference will be held on 4 August 2011 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 Q2 2011 results (Full press release in PDF)

ING Group Q2 2011 Quarterly Report (PDF)

ING Group Q2 2011 Analyst Presentation (PDF)

ING Group Q2 2011 Media Presentation (PDF)

ING Group Q2 2011 Statistical Supplement (PDF)

ING Group Q2 2011 Historical Trend Data (PDF)

Interim Accounts ING Group (PDF)

Interim Accounts ING Bank (PDF)

Interim Accounts ING Insurance (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 2Q2011 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 full Press Release: http://hugin.info/130668/R/1536082/468592.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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