ING Direct Spain The transformation

Transcription

1 ING Direct Spain The transformation César González-Bueno CEO ING Direct Spain Madrid 19 September 28

2 The sources of growth ING Direct ING Direct Spain Continued savings growth in the existing geographies Expanding the product range Today we will focus on the impact of serving all basic customer needs Further geographic expansion ING Investor Day, 19 September 28 2

3 A phased approach leading into a radical transformation Savings only Serves all basic customer needs Savings Retail Investment Products Mortgages Payment Accounts Variable Savings Fixed Term Deposits Mutual Funds Pension Plans e-broker (22) Equity linked deposits (25) Mainly variable rate mortgages Increasing share of fixed rates (27) Payroll required Direct debits with cash-back Credit & Debit cards ATM free access Consumer Loans (Sep 27) At launch (May 1999) Your Other Bank Revised positioning (27) Fresh Banking ING Investor Day, 19 September 28 3

4 Since launch, there have been 3 clearly different cycles 5,2% 25 4,9% Up Down Up 5.2% 4.9% 4,6% 2 4.6% 4,3% 4.3% 4,% 15 3,7% 3,4% 1 3,1% 2,8% 5 2,5% 2,2% 4.% 3.7% 3.4% 3.1% 2.8% 2.5% 2.2% Liquidity crisis ECB rate EUR 3m rate 1,9% 1.9% Source: Bloomberg ING Investor Day, 19 September 28 4

5 Our portfolio margin (portfolio yield 3m rate) has been resilient but is affected by the cycles 5,2% 25 Up Down Up 25 4,9% 4,6% 2 4,3% 4,% 15 3,7% 3,4% 1 3,1% 2,8% 5 2,5% 2,2% 1,9% Portfolio Margin (bps) Portfolio margin drives competitive positioning (growth) and margin (P&L) Helped by steepness and growth Right timing for investments! Worsening environment. Will it mean reverse? Portfolio margin (Portfolio yield 3 month) in bps Source: Bloomberg and ING Direct EUR 3m rate ING Investor Day, 19 September 28 5

6 1 st product - Savings (1999) Yearly Income (EUR m) Income (Eur m) % % Portfolio Margin (bps) Portfolio margin cyclicality Balancing act between: - Savings growth - Investments in new products and -P&L ** * Total customers ( ) * Savings Balances (Eur bn) * Up to June 28 ** Annualized data Source: Bloomberg and ING Direct Savings Portfolio margin (Portfolio yield 3 month) in bps CAGR ING Investor Day, 19 September 28 6

7 2 nd product Retail Investment Products (21) Yearly Income (EUR m) Income (Eur m) % % Portfolio Margin (bps) - Natural alternative to Savings (consumer view) -HighRAROC ** * * Total customers ( ) Savings & Retail Inv. Products (Eur bn) * Up to June 28 ** Annualized data Source: Bloomberg and ING Direct Inv. Products Savings Portfolio margin (Portfolio yield 3 month) in bps CAGR ING Investor Day, 19 September 28 7

8 3 rd product Mortgages (23) Yearly Income (EUR m) Income (Eur m) % % Portfolio Margin (bps) - A must to fulfill customer needs - Income stability ** * Total customers ( ) * Savings, Inv. Products & Mortgages (Eur bn) * Up to June 28 ** Annualized data Source: Bloomberg and ING Direct Mortgages Inv. Products Savings Portfolio margin (Portfolio yield 3 month) in bps CAGR ING Investor Day, 19 September 28 8

9 4 th product Payment Account (Sept 25) Yearly Income (EUR m) Income (Eur m) % % Portfolio Margin (bps) Completes the transformation ** * Total customers ( ) * Client Retail Balances (Eur bn) * Up to June 28 ** Annualized data Source: Bloomberg and ING Direct Payment Account (9%) Inv. Products (15%) Mortgages (16%) Savings (59%) Portfolio margin (Portfolio yield 3 month) in bps CAGR ING Investor Day, 19 September 28 9

10 Payment Account customers rapidly improve their behavior Annual income per customer (indexed figures) Income sources (Year 28) (indexed figures) 25 No payment Customers without Payment Account (Control Group) Control Group Savings Inv. Products (81%) (15%) (4%) 16 Mortgages Payment Account 1 x 1.6 x 2.4 x 2.7 With payment Customers with Payment Account TX (49%) (11%) (18%) (22%) Annualized data ING Direct analysis based on Control Groups formed before the launch of the Payment Account (25) Income per customer (Indexed figures) (%) over total indexed figures ING Investor Day, 19 September 28 1

11 Furthermore, the Payment Account has become an acquisition tool New customers by entry product Number of new clients (thnd.) 5% 24% Payment Account Mortgages 97% 9% 71% Inv. Products Savings * 1H * Up to June 28 ING Investor Day, 19 September 28 11

12 The growth of Payment customers is fast, has further potential and boosts top line growth Total customers ( ) 2. 2, 1.5 1,5 1. 1, Total income (EUR m) Up to June Annualized data % 18% 21% % 28% 41% % of Customers 42% of Income Customers without Payment Account Room for higher penetration Drives top line growth Customers with Payment Account ING Investor Day, 19 September 28 12

13 The transformation of ING Direct Spain has required continued investments Pre-tax Result (EUR m) 1 & RAROC Product lines in losses Total Business Pre-Tax RAROC Mortgages Investment Products Payroll Account 18.7% 24.3% 2.5% 26.9% Business Lines in profits Total Pre-tax Result Business Lines in losses Investments have been self-financed and are approaching conclusion Hurdle rates have been met 1. Results before Group overhead and ING Direct Head Office costs ING Investor Day, 19 September 28 13

14 In summary Since launch May 1999 ING Direct Spain has crossed several interest rate cycles while making investments to cover the full range of customer needs Today the investments have almost been completed although we are at a low point with respect to the interest rate cycle Towards the future, ING Direct Spain is well positioned to become the most preferred consumer bank. Growth will come from new customers and an increasing share of wallet of existing customers ING Investor Day, 19 September 28 14

15 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. ING Investor Day, 19 September 28 15