ING Wholesale Banking Standard presentation
February 2008
ING Wholesale Banking ING Group profile
ING Group
ING is a global financial services company with a wide array of banking, insurance and asset management services in over 50 countries.
ING serves a broad customer base, which includes individuals, families, small and medium-sized businesses, large corporations, institutions and governments.
ING has more than 75 million customers around the world.
Wholesale Banking
February 2008 – Page 2
ING Group history
Acquisitions
A global leader in banking, insurance and asset management
Formed by merger of Nationale Nederlanden and NMB Postbank
1989
NMB Postbank Global commercial bank
1991
Merged with Nationale Nederlanden Leading global insurance company
1995
Acquired Barings plc Creating a leading global investment bank
1998
Acquired Banque Brussels Lambert Creating the largest commercial bank in the Benelux
1999
Acquired BHF-Bank One of the largest publicly-traded German commercial banks
2000
Acquired Charterhouse A leading institutional agency of stockbrokers in the UK Also acquired Aetna and Reliastar to become a leading insurer in the Americas and Asia
2001
Acquired Bank Slaski Creating the largest foreign commercial bank in Poland
2002
Increase of stake in Vysya Bank to 43.99%
2003
Acquired full ownership of Allgemeine Deutsche Direktbank AG
2005
Acquired 19.9% in Bank of Beijing 2nd largest city commercial bank in China and 3rd largest bank in Beijing
2007
Acquired a strategic 30% stake in Thailand’s TMB Bank Extending ING‟s footprint in the fast growing Asian market. Also acquired 100% shares of Turkish Oyak Bank
2008
ING Group A global financial institution
Wholesale Banking
February 2008 – Page 3
ING Pedigree
1970 Year of acquisition 1845/1963 Year of founding / Year of merger De Nederlanden est. 1845 1845/1963
Banking Insurance Asset Management
De Nationale LevensverzekeringBank 1863/1963 Rijkspostspaarbank 1881/1986 Postcheque- en Girodienst 1918/1986
Life of Denver 1977
Southland Life 1989 Western Union 1988 Belair Direct 1989
RVS 1984
Westland Utrecht Hypotheekbank 1985
Postbank 1986/1989
Nederlandse Middenstandsbank 1927/1989
Halifax 1959 The Commerce Group 1989
Mercantile Mutual 1987 NMB Postbank Group 1989/1991 1991
Nationale-Nederlanden 1963/1991
Wellington 1995 Guardian 1998
Allianz of Canada 2004 Canadian Group Underwriters 1999 Parcom 1994
Aetna 2000 Seguros Comercial América 2001 Rodamco Asia 2004
Equitable of Iowa 1997 ReliaStar 2000 Clarion 1998
Bank Brussels Lambert 1998 Barings 1995 Furman Selz 1997
Bank Slaski 2001 DiBa 2002 Bank Mendes Gans 1997
Wholesale Banking
February 2008 – Page 4
A well-positioned global financial services company
Banking - Insurance - Asset Management
Europe
Global rankings
The world‟s largest direct bank The world‟s biggest portfolio of real estate investments # 81 on Interbrand top-100
Leading financial services company in Belgium and Netherlands
Market leader in direct banking in France, Germany, Italy, Spain and the UK
Market leader in life & pensions combined in CE The Americas Top-10 provider of retirement services # 2 pension provider in Latin America # 1 non-life insurer in Canada
Asia/Pacific
# 2 international life insurer in Asia
# 2 investment manager in Asia (excl. Japan) # 2 life risk insurer in Australia
About 125,000 employees in over 50 countries
Wholesale Banking
February 2008 – Page 5
ING - organised in 6 business lines
Insurance Americas
Insurance Europe
Insurance Asia-Pacific
Wholesale Banking
Retail Banking
ING Direct
ING Group 2007 year figures Total assets EUR 1,313bn
ING Group 2006 year figures Total assets EUR 1,226bn
ING Group 2005 year figures Total assets Shareholders‟ equity Assets under management 2005 underlying net profit EUR 1,159bn EUR 37bn EUR 547bn EUR 6,234m
Shareholders’ equity
Assets under management
EUR 37bn
EUR 637bn
Shareholders‟ equity
Assets under management
EUR 38bn
EUR 600bn
2007 underlying net profit
Ratings
EUR 9,241m
Aa2/AA-
2006 underlying net profit
Ratings
EUR 7,750m
Aa2/AA-
Ratings
Aa2/AA-
Source: ING Group 2007 figures, Published February 2008
Source: ING Group 2006 figures, Published February 2007
Source: ING Group 2005 figures, Published February 2006
Wholesale Banking
February 2008 – Page 6
ING Group - key figures over the past five years
2007
Income (in EUR million) Underlying net profit (in EUR
million)
2006
73,621 7,750
2005
71,120 6,234
2004
68,171 4,959
2003
64,736 4,053
76,587 9,241
Earnings per share Total assets (in EUR billion) ING Group debt/equity ratio Bank Tier-1 ratio
4.32 1,313 9.5 7.39
3.57 1,226 9.0% 7.63%
3.32 1,159 9.4% 7.32%
2.71 964 10.2% 6.92%
2.00 779 14.4% 7.59%
Assets under management
(in EUR billion)
637
600
547
492
463
Wholesale Banking
February 2008 – Page 7
A track record of profitable growth
Sharp rise in underlying net profit (in EUR million)*
10,000 +23%
8,000 +26% +22%
+19%
7,750
9,172
6,234 4,959
6,000
4,000 2,000 0
4,053
2003**
2004
2005
2006
2007
* excl. divestments & special items ** Dutch GAAP
Wholesale Banking
February 2008 – Page 8
Profit distribution
Profit & loss account (underlying)
In EUR million
Contribution of business lines in 4Q 07*
4% 18%
4Q 2007 Insurance 1,819
4Q 2006 1,331
% Change 37
22%
Europe Americas
Asia / Pacific Corporate Line Insurance
358 453
113 896
632 539
140 20
-43 -16
-19
22%
Banking
Wholesale Banking Retail Banking
1,151
591 442
1,148
546 444 8 -1
28%
6%
Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct
ING Direct
Corporate Line Banking Total ING Group
73
45 2,970
172
-14 2,479
-58
20
* Excludes component „Other„ in Banking and Insurance
Wholesale Banking
February 2008 – Page 9
Dividend increase reflects strong capital base and confidence in the future
Dividend per share (in EUR) 12%
1.48
12% 10%
10% 0.97
1.32
1.18 In addition to our dividend we are also executing a EUR 5 billion share buyback; 73.9% completed as of end of day 15 February
1.07
2003
2004
2005
2006
2007
• Total dividend 2007 proposed EUR 1.48 per share, up 12% • Final dividend 2007 proposed EUR 0.82, fully in cash
Wholesale Banking
February 2008 – Page 10
Top 20 global financial institutions
# Name
1 HSBC Holdings 2 Bank Of America Corp 3 Amer Intl Group 4 JPM Chase 5 Citigroup Inc
100.91 99.42 98.96
Market value in EUR million as of 31 December 2007
134.80 123.86
6 Banco Santander
7 Unicredito 8 Bnpparibas 9 Wells Fargo
75.76 69.78 69.53 68.78 66.45 65.48 64.10 62.82
92.50
10 Mitsubishi Ufj Financial
11 Allianz
12 UBS
13 Intesa Sanpaolo 14 BBVA
15 Royal Bank Scotland
16 17 Goldman Sachs
60.28
59.20 58.39 57.27
18 Axa
19 Wachovia Corp 20 Deutsche Bank
Source: Bloomberg, 31 December 2007
Wholesale Banking
51.10
47.74
0
50
February 2008 – Page 11
100
150
ING‟s credit ratings
August 2007 February 2008
S&P ING Group
ING Insurance
Moody's Aa2
Fitch Ratings AA-
AA-
- Short term - Long term ING Bank
- Short term - Long term - Financial strength Outlook
A-1+ AA-
P-1 Aa3 AA-
A-1+ AA
P-1 Aa1 B
F1+ AA
Stable
Stable
Stable
Wholesale Banking
February 2008 – Page 12
Fortune Global 500
2007
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Wholesale Banking
Company Wal-Mart Stores Exxon Mobil Royal Dutch Shell BP General Motors Toyota Motor Chevron DaimlerChrysler ConocoPhillips Total General Electric Ford Motor ING Group Citigroup AXA Volkswagen Sinopec Crédit Agricole Allianz Fortis
Revenues (US$m) 351,139.0 347,254.0 318,845.0 274,316.0 207,349.0 204,746.4 200,567.0 190,191.4 172,451.0 168,356.7 168,307.0 160,126.0 158,274.3 146,777.0 139,738.1 132,323.1 131,636.0 128,481.3 125,346.0 121,201.8
February 2008 – Page 13
Profits (US$m) 11,284.0 39,500.0 25,442.0 22,000.0 (1,978.0) 14,055.8 17,138.0 4,048.8 15,550.0 14,764.7 20,829.0 (12,613.0) 9,650.8 21,538.0 6,379.9 3,449.0 3,703.1 8,975.8 8,808.9 5,459.0
The Fortune Global 500 is a ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by Fortune magazine.
Forbes Global 2000
Forbes biggest & most powerful companies (April 2007)
1. Citigroup 2. Bank of America
3. HSBC Holdings 4. General Electric
5. JP Morgan Chase
6. American Intl Group 7. ExxonMobil
8. Royal Dutch Shell
9. UBS 10. ING
Footnotes and methodology: The Forbes 2000 is a comprehensive list of the world’s biggest and most powerful companies, as measured by a composite ranking for sales, profits, assets, and market value. All figures are in US dollars and are latest available.
Wholesale Banking
February 2008 – Page 14
Sharpening the focus to banking, investments, life insurance and retirement services
Trends
People are living longer and need to take more responsibility for own retirement
Mission
Strengths
Strategy
Priorities
Products
Retail (mass affluent) clients
People are becoming richer Setting the standard in helping our customers manage their financial future
ING is sharpening its strategic focus to: • Banking Distribution
• Investments
Bank distribution
Technology is transforming distribution of financial services
• Life insurance
• Retirement services Developing markets
Customers are demanding value for money and simplicity
Brand
Trust
Supported by asset management and asset gathering
Wholesale Banking
February 2008 – Page 15
ING has the scale and the expertise to provide clients with the right products at the right time
Current accounts
Savings & deposits
Mortgages & lending
Mutual funds & investments
Pensions/ Retirement
Life insurance
Annuities
• ING offers customers the full range of products needed throughout their lifecycle
ING‟s strengths
• ING has scale in each product category • ING has a trusted brand that applies across all products
Wholesale Banking
February 2008 – Page 16
Responsible corporate citizen
ING wants to pursue profit on the basis of • Sound business ethics
• Respect for its key stakeholders
• Full compliance with laws, regulations and ethical standards
ING Business Principles:
• We are committed to our integrity
• We aim for an above average return • We are open and clear
• We promote sustainable development and respect human rights • We respect each other
• We are involved in the communities we operate in
Wholesale Banking
February 2008 – Page 17
Main heading (blue) Our business
Wholesale Banking
Insurance Americas
Insurance Europe
Insurance Asia-Pacific
Wholesale Banking
Retail Banking
ING Direct
Relationship, Products & Services and Financial Markets - based in the Netherlands, Belgium and main financial centres
• Full service focus clients in the Netherlands and Belgium
• Selected product range for international clients • Top deals underscore ING‟s wide geographical reach • Includes ING Real Estate, largest real estate investment manager worldwide
Wholesale Banking
February 2008 – Page 19
Wholesale Banking profile
ING Wholesale Banking (WB) is the Corporate Banking division of
ING Group and focuses on providing high-value-added products and services to its medium/large business clients. ING WB offers a full range of products to corporates and institutions in the Benelux countries. Elsewhere in the world we operate with
a limited core product service. ING Real Estate, part of Wholesale Banking, is the world’s largest real estate asset manager, active across the Real Estate value chain: Development, Finance and Asset Management.
Wholesale Banking
February 2008 – Page 20
Wholesale Banking: An important cash generator for ING Group
Contribution of business lines in FY2007*
6% 19% 22%
Horizon 1
“Grow by managing established businesses efficiently”
Horizon 2
“Transform current growth engines into sustainable core businesses”
Horizon 3
“Invest in future growth”
Future growth:
3 main growth engines:
Cash generators:
• Wholesale Banking
• •
China India
•
• •
ING Direct
Life insurance developing markets Retirement Services
•
•
Romania
Russia
22%
• Retail Banking Benelux
• Insurance mature markets
25%
6% Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct
Selective product plays: e.g. Mortgages, ING Real Estate, SPVAs, Private Banking
Commit capital
Re-deploy capital Generate capital
* Underlying pre-tax profit. Excludes Corporate lines in Banking and Insurance
Wholesale Banking
February 2008 – Page 21
Wholesale Banking 4Q results
Earnings resilient despite market turmoil
Profit & loss account (underlying) (in EUR Mio)
Underlying C/I ratio: 65.0% from 62.9%
Total income Operating expenses Additions to loan loss provisions Profit before tax
4Q 07 1,470 955 -77 407
4Q 06 1,526 960 20 527
% change -3.7 -0.5 -23.8
Risk costs: -17 bps from 5 bps RWAs: EUR 199 bn (EUR 161 bn)
Underlying RAROC after tax: 20.3% in FY 07 (FY 06: 20.6%)
Average econ. cap: EUR 7.8 bn (FY 07) (FY 06: EUR 8.1 bn)
* RWAs = Risk Weight Assets
Underlying profit before tax Wholesale Banking
• Impact of subprime-related issues limited to EUR 106 million • Profit up 8.2%, supported by significant release of loan loss provisions
(in EUR million) 3,000
2,500 2,000 1,500 1,000 500 0 -500 2,299 2,525
2,399
• New initiatives to accelerate growth and improve efficiency
Note: The 2007 financial results contain the mid-corporate client business, which was transferred to Retail Banking on 1 January 2008 and represents about 13% of Wholesale Banking‟s profit
2005
2006
2007 General Lending and PCM ING Real Estate Other products
Financial Markets Structured Finance Leasing and Factoring
Source: ING Group Analyst presentation 4Q 08 results, 20 February 2008
Wholesale Banking
February 2008 – Page 22
Wholesale Banking organisation
(as at 1st of January 2008)
Insurance Americas
Insurance Europe
Insurance Asia-Pacific
Wholesale Banking
Retail Banking
ING Direct
WB Clients
WB Network
WB Products
Financial Markets
ING Real Estate
Wholesale Banking
February 2008 – Page 23
Wholesale Banking Clients - Profile
• Wholesale Banking Clients manages and builds relationships with clients ranging from corporate companies in our Benelux home markets to large corporates, institutions and governments worldwide. • We are a committed partner to our clients and strive constantly to help them overcome the challenges they face. • Our consistent and uniform client coverage model supported by a sector-based client approach enables us to offer our clients the financial solutions they need for success. At the same time, this differentiates us more and more clearly from our closest competitors.
Full service Benelux bank
• The largest provider of wholesale banking services within the Benelux • Leading positions in all product categories, from general lending and payments and cash management to specialist products • Strong focus on key corporate client relationships and SME market
Wholesale Banking
February 2008 – Page 24
Wholesale Banking Clients
CORPORATES
Serviced from head office, in view of centralisation of knowledge Access to an international team of relationship managers and product specialists
Tailor-made focus on the delivery of strategic and complex products
FINANCIAL INSTITUTIONS
Serviced from head office Emphasis on commercial banks, central banks, pension Funds, supranational and development banks, investment banks, Insurance companies and asset managers
Committed to facilitate optimum commercial opportunities for our clients by offering products and services geared to their needs and expectations.
Highly-qualified and experienced parent account managers as dedicated partner and point of contact
Wholesale Banking
February 2008 – Page 25
Wholesale Banking Clients - Our Approach
• Your needs are at the heart of everything we do. It is a promise which we call “client centricity”. • We deliver on this promise by combining industry-leading knowledge and expertise with the ability to execute deals flawlessly.
• Your team of banking and finance experts is headed up by a senior relationship manager, who is always available as your first point of contact. The senior relationship manager is backed up by a team of international industry and product specialists. This team works closely in partnership with you to understand and anticipate your particular banking needs, acting as a trusted business partner. With deep sector and banking expertise, the team is able to provide the solutions that best meet your needs. • We can serve your needs in more than 40 countries around the world, due to our international scope and local strength.
Wholesale Banking
February 2008 – Page 26
Client Coverage Model
At ING Wholesale Banking every client has a dedicated relationship manager who manages your banking services with the help of a full team of industry and product specialists. This consistent client coverage model enables us to offer our clients the financial solutions they need for success. Multinational clients are assigned a team consisting of a number of local relationship managers - one for each major region in which they operate reporting to one senior banker who manages and coordinates their activities.
Dedicated corporate relationship team
For clients with particularly extensive and complex banking needs, we offer a dedicated corporate relationship team comprised of our most senior bankers. This means our clients‟ most challenging banking needs in the areas of capital markets, credit products and advisory are met by our most knowledgeable bankers from across the business globally.
For the largest clients in terms of their banking needs we also assign a boardlevel banker working alongside the team of senior relationship managers.
Wholesale Banking
February 2008 – Page 27
Industry focus
ING Wholesale Banking knows every industry is different, with its own needs, trends and opportunities. That‟s why we always work to ensure we have in-depth knowledge of the industries in which our clients work, enabling us to provide tailored solutions that meet our clients‟ specific needs. Some of the key sectors in which ING has dedicated team expertise include:
• Consumer goods
• IT services • Natural resources
• Telecoms • Transport & logistics
• Utilities - Power
Wholesale Banking
February 2008 – Page 28
ING Wholesale Banking‟s international presence
Operating in 38 countries with 18,000 employees world-wide
Europe
Austria Belgium Bulgaria Czech Republic France Germany Hungary Ireland Italy Kazakhstan* Luxembourg Netherlands Poland Portugal Romania Russia Slovak Republic Spain Switzerland Ukraine United Kingdom
Americas
Argentina Brazil Chile*
Mexico
USA
Asia
China
Hong Kong
India
Indonesia*
Miscellaneous
Dubai
Beijing
Japan
Malaysia
Philippines
Singapore South Korea Taiwan Thailand*
* Representative office
Wholesale Banking Products
Financial Markets
Structured Finance
Corporate Finance & Equity Capital Markets
Payments & Cash Management
Leasing, Commercial Finance
Event Finance General Lending Products (WB) Insurance
Equity Markets
Securities Services
Corporate Investments
Wholesale Banking
February 2008 – Page 30
Disclaimer
Certain of the statements contained in this release are statements of future expectations and other forward-looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements due to, among other things, (i) general economic conditions, in particular economic conditions in ING’s core markets, (ii) 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, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations, and (x) changes in the policies of governments and/or regulatory authorities. ING assumes no obligation to update any forwardlooking information contained in this document.
This presentation is intended for general information purposes. It does provide basic information concerning individual Wholesale Banking products, insurance products or related services. However none of the information should be interpreted as an offer to sell securities or as investment advice of any kind. Queries concerning these topics should be addressed to the individual business units and/or companies of ING Groep N.V. ("ING Group"). No warranty or representation, express or implied, is given as to the accuracy or completeness of that information. In no event will ING Group, nor any of its directors, employees or advisors accept any liability with regard to the information contained in the individual ING companies', business unit or product group's presentation. ING Group comprises a broad spectrum of companies (the "ING companies"), many of them operating under their own brand names. Almost every ING company, business unit or product group, has its own website on the internet where it offers information about its products and services. Reference is made to those websites for further details and hyperlinks have been provided from this website to those ING companies, business units and product groups, if available. It is prohibited to modify, copy, distribute, transmit, display, publish, sell, license, create derivative works or use any content for any other purposes than that of this presentation, i.e. providing information about ING Group and its lines of business. No Liability
While ING Group and ING companies use reasonable efforts to include accurate and up-to-date information in this presentation, errors or omissions sometimes occur. ING Group and ING companies expressly disclaim any liability, whether in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, punitive or special damages arising out of or in any way connected with your access to or use of this presentation, and/or any other ING companies' presentations whether or not ING Group and/or ING companies were aware of the possibility of such damages.
All information in this presentation, including but not limited to graphics, text and links to other communication means, is provided "as is" and is subject to change without prior notice. Such information is provided, to the fullest extent permissible pursuant to applicable law, without warranty of any kind express or implied, including but not limited to implied warranties of merchantability, fitness for a particular purpose, non-infringement from disabling devices. ING Group does not warrant the adequacy, accuracy or completeness of any information in this presentation and expressly disclaim any liability for errors or omissions therein. Users are responsible for evaluating the accuracy, completeness or usefulness of any information or other content available in this presentation.
Wholesale Banking
February 2008 – Page 31