ING Groep NV (ING) Q3 2024 Earnings Call Highlights: Record Income and Strategic Growth Initiatives

GuruFocus News
4 min read

In This Article:

  • Total Income: Reached the highest level ever in the third quarter.

  • Mobile Primary Customers: Increased by 189,000 in the quarter, 900,000 over the last 12 months.

  • Lending Book Growth: Increased by EUR9 billion, with strong performance in mortgages.

  • Deposits: EUR5.5 billion of deposits from a successful campaign in Belgium.

  • Annualized Customer Balance Growth: Lending and deposit combined growth of 5.3% in the first nine months.

  • Fee Income: Exceeded EUR1 billion for the first time.

  • Return on Equity: Four-quarter rolling return on equity of 13.8%.

  • CET1 Ratio: Operating at a CET1 ratio of 14.3%.

  • Additional Distribution: Announced EUR2.5 billion, including EUR2 billion share buyback and EUR500 million cash dividend.

  • Total Income Outlook: Expected to exceed EUR22.5 billion for the full year.

  • Total Costs: Expected to remain around EUR12 billion.

  • Cost Income Ratio: Expected to be around 53%.

  • Net Interest Income: Impacted by treasury results, core lines resilient.

  • Net Core Lending Growth: Around EUR8.5 billion.

  • Core Deposit Increase: Almost EUR3 billion in the second quarter.

  • Net Interest Margin: Decreased by seven basis points.

  • Fee Income Growth: Double-digit year-on-year growth.

  • Total Expenses: Increased by just over 3% compared to the same period last year.

  • Risk Costs: EUR336 million this quarter, or 20 basis points on average customer lending.

  • Core Tier-1 Ratio: Increased to 14.3% at the end of the third quarter.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • ING Groep NV (NYSE:ING) reported a record level of total income for the third quarter, with fee income surpassing EUR1 billion for the first time.

  • The company experienced strong commercial performance, with an increase of 189,000 mobile primary customers this quarter and a total of 900,000 over the last 12 months.

  • ING Groep NV (NYSE:ING) achieved significant growth in its lending book, particularly in mortgages, with an increase of EUR9 billion.

  • The company announced an additional distribution of EUR2.5 billion, including a EUR2 billion share buyback and a EUR500 million cash dividend, providing an attractive return of 17% a year.

  • ING Groep NV (NYSE:ING) has made substantial progress in sustainability, mobilizing EUR28 billion in sustainable volume in the third quarter and EUR85 billion in the first nine months, a 15% increase from last year.

Negative Points

  • Net interest income was impacted by treasury results, with a decrease in lending NII due to lower margins, especially in the wholesale banking segment.

  • Total expenses increased by over 3% compared to the same period last year, driven by inflation impacts on staff expenses and higher VAT costs.

  • Risk costs amounted to EUR336 million this quarter, reflecting macroeconomic uncertainty and additions to stage three provisions.

  • The wholesale banking segment experienced a decrease in lending margins due to growth in low-risk segments and some one-off impacts.

  • The company faces challenges in maintaining liability margins in a lower rate environment, with expectations to operate at the lower end of the 100 to 110 basis points range in 2025.

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