- Result before tax at EUR 1.04 billion (2021: EUR 1.17 billion), despite high risk provisions
- As of March 8th: Bank doubles core rate on overnight deposits for all customers from 0.3 to 0.6 percent
- Sustainable option for current account to be launched in spring
- Cost-Income-Ratio improved to 47.2 percent (2021: 51.2 percent)
Frankfurt am Main, 3 February 2023 – ING Germany strengthened its market position in the 2022 financial year and once again posted a pre-tax profit of more than 1 billion euros. Despite high risk provisions of EUR 460 million (2021: EUR 113 million) – mainly for exposures related to Russia – the bank succeeded in achieving a strong pre-tax result of EUR 1.04 billion (2021: EUR 1.17 billion). Increased interest income in the second half of 2022 contributed significantly to this result.
"The outlook for the banking business has changed fundamentally within a few months. To ensure that our customers benefit swiftly from the interest rate turnaround, we are doubling the interest rate to 0.6 percent for all 7.5 million overnight deposit accounts from March", says Nick Jue, CEO of ING in Germany. "We have set an early tone with our savings rates last year. With interest rate tailwind behind us, we want to continue on this course and further expand our position in the German banking market."
Norman Tambach, Chief Financial Officer of ING in Germany, adds: “The strong result is further proof that we are very well positioned as a universal bank with our services for retail, business, and corporate customers. We have shown again that we can adapt quickly to new conditions.”
ING Germany becomes primary bank for more and more customers
The number of primary bank customers who use the current account with monthly cash inflows plus at least one other product of the bank increased by 155,000 to 2.41 million at the end of 2022 (2021: 2.26 million). The total number of customers was approximately the same as the previous year at 9.1 million (2021: 9.09 million).
Current accounts and customer deposits grow
The number of current accounts grew again last year. At the end of 2022, the bank held 3.12 million current accounts, 149,000 more than in the previous year (2.97 million). Once more, the current account proved to be an important entry-level product and the basis for a close customer relationship.
Deposits on savings products and current accounts increased slightly by one percent year-on-year to EUR 135 billion (2021: EUR 134 billion).
"The introduction of the custody fee led to a planned decline in deposits in the first half of the year. With the turnaround in interest rates, it was a logical step for us to abolish the custody fee and resume paying significant interest to our customers. As a result, deposits increased by 7.7 billion euros in the second half of the year, especially in fixed term products and overnight deposits", explains Norman Tambach.
Current account to be extended by sustainable option
ING Germany wants to increasingly meet its responsibility for the environment and society with product offers for retail customers. In spring, the bank will therefore extend its current account for a sustainable option. This involves a commitment to match customer deposits in the sustainable current accounts with a portfolio of the same amount, spread across loans for energy-efficient real estate, sustainable corporate loans, and green and social bonds. The sustainable use of customer deposits is based on ING's own criteria. These take into account the UN Principles for Responsible Banking and the EU taxonomy. The criteria will be published on the bank's website at the launch of the product.
Nick Jue: “With this new offer we provide the option for a social rethink in daily banking transactions. We are reconciling the interests of our customers with our goal of steering the loan book towards net zero emissions by 2050.”
Securities savings plans still in high demand
Customers of ING Germany held 1.6 million securities savings plans at the end of the year 2022 (2021: 1.32 million). Due to increased savings plan executions, the total number of executed transactions rose to a new record of 34.75 million (2021: 34.03 million).
The average savings plan rate was 135 euros. Savings plans on ETFs were particularly popular, followed by individual shares.
The number of securities accounts grew by 238,000 to 2.29 million (2021: 2.05 million).
Retail credit volume increases
In the consumer loans segment, the bank achieved slight growth of one percent to a portfolio volume of just under EUR 9.74 billion in 2022 (2021: EUR 9.62 billion).
In mortgage lending, the portfolio volume increased by seven percent to a new record of EUR 91.28 billion (2021: EUR 85.44 billion). The value of new business was at EUR 13.14 billion, 25 percent below the record year of 2021 (EUR 17.61 billion).
The brokered volume of Interhyp AG, Germany's largest intermediary for residential mortgages, decreased by 15 percent year-on-year to EUR 29 billion (2021: EUR 34.17 billion).
Positive development in Business Banking continues
The Business Banking segment which comprises digital lending to small and medium-sized enterprises (SMEs), recorded significant growth. The portfolio volume increased by 66 percent to EUR 286 million in 2022 (2021: EUR 172 million). New business increased to over EUR 230 million (2021: EUR 120 million). Following the full integration of Lendico in the 2022 financial year, the Bank will focus on gradually expanding and growing its Business Banking offering.
Wholesale Banking focuses on German business and sustainability
For the corporate client division of ING Germany ("Wholesale Banking"), 2022 was marked by the Ukraine war and challenging economic conditions. The lending volume at the end of 2022 was around EUR 29.36 billion (2021: EUR 31.00 billion). The main reasons for the decline were the spin-off of the Austrian business, a decrease in the loan portfolio from the European Central Bank's TLTRO programme and the reduction in Russia-related business.
ING Germany pushed ahead with the diversification of income sources in Wholesale Banking and increased net commission income by 31 percent to EUR 61 million (2021: EUR 46 million). This was based mainly on a strong capital market business: according to rankings by the ‘Bloomberg’ data service, ING Germany was the third strongest bank in Germany in the issuance of corporate bonds, with a volume of EUR 3.6 billion. Sustainable bonds accounted for EUR 1.9 billion or around 50 percent of this volume. ING Germany thus led the way in 2022 and continued its success story in terms of sustainability.
Sustainable transactions and loans with involvement of ING Germany were almost doubled in 2022 with a total volume of more than EUR 20 billion. ING Germany counts renowned German companies such as ZF Friedrichshafen, Vonovia and METRO among its clients in this area.
Due to high risk provisions, profit before taxes fell to EUR 37 million (2021: EUR 331 million). The number of German clients increased from 200 to 230.
Net interest income increases, profit before tax impacted by high risk provisions
Due to the ECB's interest rate turnaround and rising customer deposits in the second half of the year, the bank increased its net interest income by 14 percent to EUR 2.25 billion (2021: EUR 1.97 billion).
Net commission income, on the other hand, declined by nine percent to EUR 496 million (2021: EUR 543 million). This was due in part to the lower volume of mortgage loans brokered by Interhyp AG. Additionally, the lower number of securities transactions subject to fees and the lower average trading volume per transaction led to lower commission income.
Personnel expenses and other administrative expenses remained almost unchanged compared to the previous year. Personnel expenses amounted to EUR 685 million, one percent less than in the previous year (EUR 691 million). Other administrative expenses amounted to EUR 656 million (previous year: EUR 657 million).
Risk provisions increased significantly to EUR 460 million (2021: EUR 113 million), mainly due to exposures related to Russia.
Before taxes, ING Germany thus achieved a profit of EUR 1.04 billion (2021: EUR 1.17 billion). The cost-income ratio improved by four percentage points to 47.2 percent (2021: 51.2 percent).
2023: Preparing the ground for further growth
ING Germany will lay the groundwork for further growth and greater business scalability in 2023.
To do this, the bank will invest in its technical infrastructure so it can handle more business and offer seamless digital processes. Accessibility by phone will be improved by linking telebanking services to the banking app in April 2023. This will make telephone customer service accessible directly from the app without the need for additional authentication through a telebanking PIN.
"We will continue to improve our processes and make the bank even fitter for efficient growth in the coming months”, says Nick Jue.
Disclaimer: All information provided here on ING Deutschland is based on the preliminary IFRS consolidated financial statements of ING Holding Deutschland GmbH, Frankfurt am Main, which have yet to be audited. Values in tables are rounded. The totals and changes compared with the prior-year period in the tables are based on the exact values and may therefore differ where appropriate. The deviations from the figures published by ING Groep N.V. for the Germany region are mainly the result of ING Group internal group settlements. The forecasts or expectations contained in this publication may be subject to uncertainties. The report reflects the status at the time of publication. Forward-looking statements speak only as of the date they are made. We assume no obligation to update such statements in light of new information or future events.
ING in Germany
With over 9 million customers, we are the third-largest bank in Germany. Our core products are current accounts, mortgage lending, savings, consumer loans and securities. In the Business Banking segment, we grant loans to small and medium-sized enterprises. In Wholesale Banking, we offer banking services to large, international companies. With over 6,000 colleagues, we are represented in Frankfurt am Main (headquarters), Berlin, Hanover and Nuremberg.