ING Groep NV

AEX:INGA

Earnings Call Analysis

Strong Q1 Performance and Focus on Sustainability

The company reported a strong first quarter with significant contributions from both Retail and Wholesale banking. Retail banking saw a net increase of 99,000 primary customers, bringing the total to 15.4 million. Fee income grew 11%, and lending increased by EUR 4 billion. In Wholesale banking, income grew in both Lending and Financial Markets, with the company acting as a key bookrunner for major Euro-denominated corporate bonds. Sustainability efforts also gained momentum, with a 59% increase in sustainability deals and a 13% increase in mobilized volume. Looking ahead, the company plans to continue its sustainability initiatives and focus on customer engagement.

Strong Commercial and Financial Results

The company experienced a strong start to the quarter, with both Retail and Wholesale banking performing admirably. The firm grew its primary customer base by 99,000 new clients, reaching a total of 15.4 million primary customers out of 39 million total customers. This robust expansion underpins the company's success in both commercial and financial metrics.

Fee and Lending Growth

The company saw an 11% increase in fees compared to the same quarter last year. Lending also grew by approximately EUR 4 billion, driven by aiding more customers in purchasing homes. The firm's mortgage market share in the Netherlands expanded in both proprietary channels and intermediaries, earning a 5-star rating from Moneyview for key products.

Wholesale Banking Success

In Wholesale Banking, the company continued to attract clients thanks to its global network and sector expertise. The income for Lending and Financial Markets saw significant growth. In Financial Markets, the firm was an active bookrunner for several of the largest Euro-denominated corporate bonds, highlighting its strong position in the market.

Sustainability Efforts

The first quarter saw a 59% increase in the number of sustainability deals compared to the same quarter last year, with a 13% rise in the total volume mobilized. While the company finances a considerable amount of sustainable projects, it acknowledges the need to work on improving the sustainability of all its financing activities.

Retail Banking and Sustainability

In Retail Banking, the company aims to offer sustainable alternatives for all key products across all markets it operates in. For instance, in Poland, it launched a mortgage-linked renovation loan to support energy-related investments in existing homes, contributing to CO2 emission reduction goals in the housing sector.

Future Outlook

Looking forward, the company is excited to continue investing in its business and meeting clients. The positive momentum in both retail and wholesale segments suggests a promising outlook for the remainder of the year.

Earnings Call Transcript 2024-Q1

[Steven van Rijswijk, executive]

I am really looking forward to this call. It is going to be very good.

[Unknown Analyst]

I think so too. Hi Steven?

[Steven van Rijswijk, executive]

Hi [ Melynda ].

[Unknown Analyst]

So it's spring. And today, we have a little mini bug marking the time 2 minutes. Okay. So first quarter results, what are 3 main things?

[Steven van Rijswijk, executive]

We had a great start. So we can all be very proud of our commercial and financial results. Both Retail and Wholesale banking contributed very well. So we have a very strong income, and we grew our primary customers with 99,000 new clients.

[Unknown Analyst]

Okay. And so now how many primary customers are there?

[Steven van Rijswijk, executive]

15.4 million out of a total of 39 million.

[Unknown Analyst]

Yes. It was a test. So you got it right.

How about our financials?

[Steven van Rijswijk, executive]

Well, our fees grew with 11% compared to the same quarter last year. Our lending grew with about EUR 4 billion, among others by helping more customers to buy homes. In the Netherlands, our new mortgage market share grew both in our own channels and through intermediaries, and we had a very good customer service. Moneyview rated us with 5 stars on our key products. And last but not least, in Germany, we were chosen as the most popular bank for the 18th time in a row.

[Unknown Analyst]

Yes. So that's retail. What about wholesale banking?

[Steven van Rijswijk, executive]

Well, in wholesale, we continue to win clients based on our global network and our sector expertise. We grew our income both in Lending and in Financial Markets. And in Financial Markets, for example, we were active bookrunner in a number of the largest Euro-denominated corporate bonds.

[Unknown Analyst]

Okay. And what do you think about sustainability in the first quarter?

[Steven van Rijswijk, executive]

While we increased the number of sustainability deals in the first quarter of this year with 59% compared to the same quarter last year, and our total volume mobilized increased with 13%. Now we finance a lot that is sustainable, but we also still finance a lot that is not sustainable, and we keep working on that.

[Unknown Analyst]

What about in Retail Banking?

[Steven van Rijswijk, executive]

Well, in Retail Banking, we want to provide sustainability alternatives for all of our key products in all of the markets in which we're active. So for example, in Poland, we launched a mortgage-linked renovation loan. And that's important because we also want to meet the goals of reducing CO2 emissions in the housing industry and for that these energy-related investments are needed for existing houses.

[Unknown Analyst]

What exciting things are you looking forward to for the rest of the year?

[Steven van Rijswijk, executive]

I'm always excited to meet clients. I'm excited to continue to invest in our business and looking forward to the questions.

[Unknown Analyst]

Okay. I promise.