ING has reported a strong set of results for fiscal
2010, earning over €3.2bn ($4.34bn) following a loss of almost
€1bn in 2009. ING’s fight back is being underpinned by a powerful
performance from its retail banking unit, with the exception of its
struggling ING Direct unit in the UK. Douglas Blakey
reports.
Go deeper with GlobalData
ING has reported a retail banking net profit
for fiscal 2010 of €2.78bn, more than a fivefold increase from the
€512m posted in the prior year.
All of ING’s retail banking business units
reported improved results for the 12 months to 31 December:
- Retail branch operations in the Netherlands posted net income
of €797m (up 87%); - In Belgium, retail net profit improved by 9.2% to €520m;
- ING’s retail unit in Asia reported net income of €376m,
compared with a loss of €54m in fiscal 2009; - In Central and Eastern Europe, ING posted net income of €104m,
more than double the €45m earned in 2009, and - ING Direct reported a much improved performance, with a net
income of €985m, turned round from a net loss of €379m the prior
year.
ING Direct successfully grew deposits in
fiscal 2010, by 9.6% to €238.1bn.
In eight of the nine countries where ING
Direct operates – Canada, Spain, Australia, France, US, Italy,
Germany and Austria – funds entrusted increased during fiscal
2010.
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By GlobalData
Notable increases occurred in Canada (funds
entrusted increased by 25.2% to €21.6bn), the US (funds entrusted
increased by 11.3% to €58.0 bn) and in Germany/Austria (up by 9.2%
to €81.8bn).
ING Direct’s UK operation was the
exception.
In August last year, ING spokeswoman Carolien
van der Giessen told RBI:
“ING is repositioning its savings business to
be profitable when the unusual Bank of England rate position
eases.
“We are successfully attracting new savings
customers in the UK to our low cost, simple and high-quality
service offering.
“We are currently investing in additional
products to develop a full service bank that will meet the needs of
our customers.”
ING Direct’s current UK operation is limited to savings,
mortgage and insurance products; it does not offer current
accounts, credit cards or personal loans, with customer service and
sales conducted online and by telephone.
But in fiscal 2010, funds entrusted at ING Direct nosedived by
16% to just below €15.0bn.
The UK country unit of ING Direct posted a
loss before tax of €36m, having reported a rare profit in 2009
(€66m).
ING Direct’s UK unit has now accumulated
losses of €275m since setting up shop in 2003; it has
only posted a profit in two years (2006 and 2009).
Average balances per UK savings client have
continued to decline sharply, down to €10,475 in the fourth quarter
of 2010, from €20,000 in the fourth quarter of 2007. At the end of
2006, the average UK customer balance was €38,000.
By contrast, ING Direct enjoyed a notable
turnaround in the US.
Profit before tax at ING Direct US in fiscal
2010 was €684m, having posted a loss of €7m in fiscal 2009.
In Germany/Austria, traditionally ING Direct’s
strongest European markets, profit before tax more than doubled to
€442m.
At group level, ING posted a net profit of
€3.22bn, compared with a loss of €935m a year earlier.
Total assets increased by 7.2% to
€1.25trn.
Highlights included a reduction in the ING
cost income ratio to 56.0% from 68.7% in 2009, while the net
interest margin increased by 10 basis points to 1.52%.
ING ended the year with a Tier 1 capital ratio
of 9.6%, up from 7.8% a year earlier.
Looking ahead, ING CEO Jan van Hommen, said
that repayment of €10bn bail-out funds received at the height of
the crisis from the Dutch government was a key priority for
2011.
“ING made good progress in 2010 as we prepare
to create strong stand-alone companies for banking and insurance,”
said Hommen.
“The focus for 2011 will be on preparing the
insurance company for two initial public offerings and working
towards the repurchase of the remaining outstanding core Tier 1
securities from the Dutch State.”
