ING posts 3Q09 underlying net profit of EUR 778 million
- 3Q09 underlying net result of EUR 778 million, compared with EUR 229 million in 2Q09 and EUR -568 million in 3Q08
- Pre-tax market impacts of EUR -882 million include impairments on debt securities and real estate revaluations and impairments
- Results excluding market impacts and risk costs were EUR 2.4 billion, primarily attributable to the Bank
- Cost reduction programmes brought operating expenses down 9.3%, or EUR 330 million, from the third quarter last year
- Divestments and special items totalled EUR -278 million, bringing the 3Q09 net result to EUR 499 million or EUR 0.25 per share
- Bank underlying net result of EUR 264 million, versus a loss of EUR -25 million in 2Q09 and EUR -101 million in 3Q08
- Market impacts of EUR -1,121 million include EUR -664 million impairments on debt securities, EUR -423 million on real estate
- Strong interest income and Financial Markets results, lower costs drive results excl. market impacts and risk costs of EUR 2.0 billion
- Insurance underlying net result of EUR 514 million, compared with EUR 254 million in 2Q09 and EUR -467 million in 3Q08
- Favourable pre-tax market impacts of EUR 240 million including realised gains on equities and positive DAC unlocking
- Lower investment margins and stable cost base lead to result excluding market impacts of EUR 346 million
- Shareholders' equity and capital ratios strengthened
- Shareholders' equity increases by 19%, or EUR 4.2 billion, in 3Q09 to EUR 26.5 billion as market values of debt securities increased
- Core Tier 1 ratio increases to 7.6% from 7.3% at the end of 2Q09; Risk-weighted assets decline EUR 8 billion to EUR 337 billion
- Group debt/equity ratio improves slightly to 13.1% from 13.5% in 2Q09
- Back to Basics transformation programme progressing on track or ahead of original targets
- Cumulative reduction in Bank balance sheet of EUR 176 billion, or 16%, since 30 September 2008 exceeds 10% reduction target
- EUR 1 billion of cost savings achieved in fi rst nine months of 2009 versus revised annual target of EUR 1.3 billion
- Total FTE reduction of 10,239 realised by end of September 2009
CHAIRMAN'S STATEMENT
"ING achieved a strong commercial performance in the third quarter, illustrating the strength of our Banking and Insurance franchises even in this challenging economic environment," said Jan Hommen, CEO of ING Group. "The Bank continued to benefi t from resilient interest results and strong Financial Markets performance. Insurance sales improved from the second quarter, although investment margins were under pressure following de-risking measures taken earlier this year. Negative market impacts were less severe than in previous quarters as equity markets improved; however, results continued to be impacted by impairments on mortgage-backed securities and negative revaluations on real estate investments. This resulted in an underlying net profi t of EUR 778 million for the Group in the third quarter, supported by our ongoing efforts to drive down expenses."
"We have achieved most of the targets set out in the fi rst phase of our Back to Basics programme thanks to the enormous efforts of our management and staff. Operating expenses have been reduced by EUR 1 billion on a comparable basis, and we expect to reach our EUR 1.3 billion target for the full year. We exceeded our target for de-leveraging the Bank's balance sheet, reaching a 16% reduction over the past 12 months, while improving our margins. Divestments of non-core activities gained pace in the third quarter, and we have demonstrated a disciplined approach to achieve attractive prices even in the current market environment."
"In the fourth quarter, we announced plans to take our Back to Basics programme a step further and move towards a full separation of Banking and Insurance. This was not a decision we took lightly, but I strongly believe it is the right choice and the right time. The financial services industry will be transformed as a result of the crisis and the winners will be those institutions that can regain their customers' trust, offering transparent products, value for money and superior service. The split will enable both the Bank and the Insurer to adapt more quickly and emerge from the crisis more effi cient, more agile, and more focused on meeting our customers' needs."
"In the Netherlands we have proven that ING can achieve attractive returns in the most competitive retail banking market in Europe. ING Direct has set the global standard for internet banking with high customer satisfaction and one of the lowest cost bases in the industry. Our One Bank strategy will leverage these skills across the organisation to grow our retail banking franchise, offering customers a different kind of banking experience while delivering attractive returns for shareholders."
"Our insurance company is a leader in retirement services with an attractive mix of mature and growth markets. We will take great care to ensure the separation of the business goes smoothly and that we continue to deliver business as usual for our customers. The divestment of insurance will be done carefully to ensure value for shareholders is protected while balancing the interests of all stakeholders."
"We have a lot of work ahead, but this is the beginning of an exciting new phase for ING. Our resolution with the European Commission on restructuring will put behind uncertainty and enable us to focus on the future. We are also raising equity to repay the first half of the capital support received from the Dutch State a year ago, which is an important milestone on our road to recovery. It is time to move forward, and I look forward to the journey ahead."
The full report including tables can be downloaded from the following link:
The following documents can be downloaded from around 07:15 am CET from the following links:
Investor enquiries
T: +31 20 541 5460
Press enquiries
T: +31 20 541 5433
Conference calls and webcasts
Jan Hommen, Koos Timmermans and Patrick Flynn will discuss the results in an analyst and investor conference call on 11 November 2009 at 9:00 CET. Members of the investment community can join in listen-only mode at +31 20 794 8500 (NL), +44 208 515 2315 (UK) or +1 480 629 9771 (US) and via live audio webcast at www.ing.com.
A press conference call will be held on 11 November 2009 at 11:30 CET. Journalists are invited to join the conference call in listen-only mode at +31 20 794 8500 (NL) or +44 207 190 1537 (UK).
2009 Third Quarter Results ING Group
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