ING BeLux Full Year Results 2015

• The 2015 profit before tax of ING BeLux [1] amounted to € 1,108 million, which is close to our record profit of 2014 (- 1%)
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• € 5.7 billion growth in the lending portfolio (+5%) [2]. Deposits rose by € 4.2 billion (+4.7%)
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• 95,000 ING Lion Accounts opened
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• We welcomed 170,000 new clients
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• Modest cost growth despite significant growth in regulatory costs (+21%) [3], representing 10% of total costs
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​ING BeLux maintains its strong performance year-on-year, with a solid profit before tax of € 1,108 million, matching the record profit of 2014 (-1%).
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Excluding volatile elements, ING BeLux posts an underlying pretax result [4] of € 1,229 million compared to € 1,227 million in 2014 (+0.1%) showing a sustained high performance in adverse economic conditions.
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Rik Vandenberghe, CEO ING Belgium, comments: “We achieved good results both commercially and financially, even though we operate in a difficult market climate. Our results match the record results of 2014. I want to thank our customers for their trust in our company and our employees for their daily commitment to give our customers the products and service they deserve.”
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Supporting the real economy
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ING BeLux supported its customers in realizing their projects by increasing the lending portfolio with € 5.7 billion (+ 5%) [2] across all business lines. This growth was almost fully funded by a deposit growth of € 4.2 billion (+4.7%).
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ING in Belgium [5] is an important tax contributor with € 355 million incurred in income taxes in 2015, on top of the € 169.8 million regulatory costs paid in Belgium.
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The revenues of ING BeLux slightly increased to € 3,217 million, +0.6% compared to last year.
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Retail Banking revenue (including Private Banking, Midcorporates & Institutionals) decreased by 3% to € 2,546 million.
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• Although lending portfolio grew by € +1.4 billion within retail mass driven by increased mortgages demand, the income on mortgages declined due to lower margin and lower pre-payment fees.
• Furthermore due to current low interest rates, savings margins are under pressure. However this is compensated by a significant increase in investment product assets.
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• Private Banking: the assets under management [6] in Belgium were up 7.5% or € 1.4 billion compared to end 2014 to € 20.6 billion.
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• The income of the Midcorporates & Institutional clients showed an increase of 3% driven by business lending.
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In Wholesale Banking, revenue rose 16% versus 2014 to € 671 million thanks to good results recorded in Industry Lending (Energy, Transport & Infrastructure), Working capital solutions and Financial Markets.
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The ING BeLux cost structure

Expenses of ING BeLux increased by 1% compared to 2014, due to higher regulatory costs. Excluding the regulatory cost, operational expenses decreased by € 22 million reflecting our sustained focus on cost management.
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The increase in risk costs are due to additions made for some specific files. Globally risk costs are well controlled at a stable 0.33% on risk weighted assets.
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Solvency

ING Belgium SA/NV maintains its solvency, with a Common Equity Tier 1 ratio [7] of 14.5% (Basel III definition, consolidated view).
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From bank to banking

Traditional and non-traditional competitors as well as shifting client demands challenge existing business models while low economic growth and low interest rates put pressure on revenue models. The environment in which banks service their clients, is challenging and fast-changing.
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True to its culture of innovation and empowerment, ING Belgium set out its course in 2008 by launching a new distribution model on the retail market under the motto: ‘direct if possible, advice when needed’. On this strong foundation, ING Belgium continued to build by launching its Think Forward Strategy in 2014. In order to improve, ING Belgium has never shied away from questioning its own products, services, channels and organization. Always with one sole purpose in mind: helping people to stay a step ahead in life and in business.
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One of our strategic priorities is to earn the primary relationship, meaning we want to be the first bank a client is thinking of when seeking advice or is looking for banking solutions. In 2015, there were several highly visible successes in this regard, such as ING Belgium being named for a second four-year-term as primary banker for the Flemish government and its 60 agencies. Another such success was the role ING Belgium played in the world’s biggest brewing deal: the takeover of SABMiller by AB Inbev.
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A challenging path, a clear goal
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The future continues to be challenging. The societal and economical changes we are going through need to be translated into new ways of servicing clients, while also maintaining and improving our core business. ING Belgium firmly believes to have the necessary audacity to reinvent itself and the right innovative spirit to be able to stay close to its clients and to offer them the right solutions which help them to always stay a step ahead.
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As the world around us is changing, we continue to make the shift which we started years ago: from bank to banking.
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In 2015 we accelerated the pace of innovation. Both within ING Belgium and in cooperation with external partners, we continue to look for best practices which lead to an improved value offering and a differentiating client experience. Our partnership with Qustomer is one of many examples of the way we go beyond traditional banking. By launching FinTech Village, and the support we give to the participating FinTech start-ups, we invest in innovations which will make banking for our clients even more easy in the future.
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Digitization is a big part of our daily lives, which translates into business practices. We were the first Belgian bank to launch a PC banking platform (1992) and our mobile app the ING Smart Banking app (2011). In 2015 we integrated the Bancontact/Mister Cash peer-to-peer mobile payments functionality in our app, we made it possible to check your account balance without having to logon and made the app available on smartwatch.
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It remains important for us to be able to welcome our clients at a branch but with banking services available 24/7, the reason why clients visit the branch and the frequency with which they do so, has changed. In line with this trend, we keep investing in the ways we offer the best possible service through the branch while decreasing the number of branches. In 2016 up to 50 branches will be merged with other branches, which will have no impact on the service towards our customers: staffing levels will be maintained and we continue to invest in commercial staff. We go for a more personal service, even with less bricks.
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Our offering through our digital channels has increased a lot in time, but also our face channels have become more digital. Our challenge for the future is to offer our clients a harmonized experience throughout the different channels, thus proving that ‘extremely digital can be extremely personal’ and ‘extremely personal can be extremely digital’.
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Rik Vandenberghe, CEO ING Belgium: “By understanding our clients, accelerating the pace of innovation and continuously improving our products and services we will continue to help our clients to stay a step ahead in life and in business, even when times are challenging from an economic perspective.”
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[1] ING BeLux includes the ING entities active in banking and leasing in Belgium & Luxembourg, excluding foreign branches
​[2] Excluding Flemish government
​[3] Regulatory costs: Bank levies, deposits guarantee scheme and Resolution Fund
​[4] Excluding CVA/DVA impact, capital gain and regulatory costs
​[5] This includes taxes paid by ING Belgium SA/ NV, Record Bank and ING NV Belgian Branch
​[6] Assets Under Management in within Private Banking with account assets of minimum €1 million
​[7] Phased in (transitional)