- Mobile Primary Business Customers Growth: Increased by almost EUR1.1 million in 2024, with over 430,000 added in Q4.
- Netcore Lending and Retail Banking Growth: EUR26 billion increase, primarily driven by mortgages.
- Total Customer Balances Growth: 6% in 2024, exceeding the 4% expectation.
- Sustainable Deals Volume: EUR130 billion in 2024, a 13% increase from 2023.
- Branch Network Rationalization: Reduced to just over 600 globally from almost 800 in 2023.
- Net Interest Income (NII): Supported by volume growth in lending and liabilities.
- Return on Equity: 13% in 2024.
- Shareholder Yield: Above 15% for the second consecutive year.
- Share Buyback: EUR2 billion announced in November, ongoing.
- Final Cash Dividend: EUR0.71 per share for 2024, subject to approval.
- Net Core Lending Growth in Q4: EUR7.2 billion.
- Core Deposit Growth in Q4: Over EUR16 billion, with retail contributing over EUR12 billion.
- Fee Growth Year-on-Year: 14% increase.
- Total Expenses in 2024: Increased by 4.8% to just over EUR12 billion.
- Total Risk Cost in Q4: EUR299 million, or 18 basis points of average customer lending.
- Core Tier 1 Ratio: Decreased from the reported level at the end of Q3 but rose from a pro forma level.
- Expected Total Income for 2025: Forecasted to be around the same level as in 2024.
- Expected Fee Income Growth for 2025: 5% to 10% increase.
- Expected Annual Cost Growth for 2025: Around 4.5%, excluding potential incidental expenses.
- Return on Equity Target for 2025: More than 12%.
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ING Bank Slaski SA (WAR:ING, Financial) achieved outstanding commercial growth in 2024, with a significant increase in mobile primary business customers and a record net core lending growth of EUR26 billion.
- The bank reported a strong net interest income, supported by volume growth in both lending and liabilities, despite margin pressure from decreasing rates.
- ING Bank Slaski SA (WAR:ING) made significant progress in sustainability, mobilizing EUR130 billion in sustainable deals, surpassing their previous target.
- The bank maintained a high level of customer satisfaction, achieving the number one net promoter score in five retail markets and a high score in wholesale banking.
- ING Bank Slaski SA (WAR:ING) demonstrated strong capital generation, with a return on equity of 13% and an attractive shareholder remuneration, including a EUR2 billion share buyback and a final cash dividend of $0.71 per share.
Negative Points
- The bank's onshore business in Russia resulted in an estimated negative impact of around EUR700 million on the P&L.
- Operational expenses increased by 4.8% in 2024, driven by inflationary pressures and higher staff expenses.
- The liability margin decreased due to lower replicating income following rate cuts, impacting the overall net interest margin.
- The bank faces macroeconomic uncertainties, which limit visibility on important operating drivers such as interest rates.
- There is a need for further cost control and operational efficiency improvements to maintain competitiveness and profitability.
Q & A Highlights
Q: How does ING Bank Slaski SA view share buybacks in relation to M&A opportunities in 2025, particularly in markets like Germany, Spain, and Italy?
A: Steven Van Rijswijk, CEO, explained that ING is growing at 4% to 5% per annum towards 2027 and is broadening services in existing markets. If opportunities arise to accelerate growth or broaden the product base, ING will consider them. The company is balancing excess capital, share buybacks, and M&A to optimize long-term ROE value creation.
Q: Can you provide an update on the announced core deposit rate reductions and their impact on revenue?
A: Tanate Phutrakul, CFO, stated that approximately EUR200 billion in core deposits were subject to rate reductions, which will positively impact revenue by EUR600 million for the full year. The sensitivity remains that every 10 basis point cut in EUR zone savings and term deposits will have a positive impact of approximately EUR400 million.
Q: What are the expectations for asset quality, particularly with the increase in credit risk in the loan book?
A: Liliana Nowosielska-Balion, Senior Expert HR, noted that the Stage 3 ratio remains low, indicating good asset quality. The increase in Stage 2 is due to methodological changes and enhanced early warning systems, not a deterioration in quality. The overall risk costs have decreased, showing a stable asset quality.
Q: How does ING plan to manage the cost-to-income ratio, and what are the expectations for RWA growth?
A: Tanate Phutrakul, CFO, mentioned that the cost-to-income ratio is expected to be below 56% for 2025, with a target of 54% to 52% by 2027. RWA growth is expected to be lower than loan growth due to mitigating actions like SRTs, with a focus on retail banking growth.
Q: What is the status of ING's exit from Russia, and are there plans to address other markets with suboptimal presence?
A: Steven Van Rijswijk, CEO, confirmed that ING has exited its onshore business in Russia, focusing on local accounts and payments. The company continuously evaluates its operations and will review markets that do not provide the right long-term returns, as seen with past actions in the Czech Republic, Austria, and France.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
