- 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
1Q2011 1Q20101 Change 4Q20101 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 billion) 1,229 1,236 -0.5% 1,247 -1.4%
Shareholders' equity (end of period, in EUR billion) 40 38 5.7% 41 -2.0%
Underlying return on equity based on IFRS-EU equity3 14.7% 10.3% 3.3%
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 average RWA 42 60 51
Core Tier 1 ratio 10.0% 8.4% 9.6%
Underlying return on equity based on IFRS-EU equity3 13.7% 11.7% 13.5%
Insurance key figures
Operating result (in EUR million) 561 414 35.5% 438 28.1%
Investment margin / life general account assets (in bps) 95 84 93
Administrative expenses / operating income (Life & ING IM) 40.0% 43.4% 44.1%
Underlying return on equity based on IFRS-EU equity3 6.2% 0.8% -15.7%
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 +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
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