In 2020, ING delivered a solid commercial and financial performance despite the economic situation. This has meant continued pressure on net interest income, yet ING’s results in Luxembourg remained resilient throughout the year. Diversification of income to compensate the weakened demand for consumer and business loans yielded an income level of EUR 300 million, in line with expectations given the low interest margin in foreign currency deposits. ING recorded an underlying net result of EUR 90 million (- 22%) after increased risk costs given the pandemic (EUR 8 mln, +5% vs. 2019)) and after paying taxes in the amount of EUR 30 million. Careful cost management kept the cost-income ratio at 57%. ING’s solvency remained strong at 21%, well above the regulatory minimum.
The Bank’s strategy to deliver a differentiating customer experience materialised in a continued increase in primary bank clients: 49% of clients choose ING as their main bank. To safeguard the health and safety of our customers, we empowered them to do their banking and payments at a distance with our digital and contactless solutions. In 2020, 86% of ING’s customers had adopted My ING, and 42% of active customers only interact with the bank using the mobile app. Customers appreciate the ING experience as measured by the Net Promoter Score (NPS®): 71% of clients have already recommended ING to their family and friends.
In 2020 ING established a new business segment called Business Banking that will work to provide business clients frictionless banking with an entrepreneurial spirit – so they can do more of what moves them and their business. For the self-employed, micro, small and medium-sized enterprises and for mid-corporates, ING’s Business Banking will soon become the “go-to place” for managing and accelerating their business.
Despite a very low interest rate environment, the pandemic and lower credit demand, the Retail Banking activity delivered higher income than in 2019 driven mainly by the growth of the mortgage portfolio (+7%). With about 70% of all interactions between clients and the bank taking place via mobile, meaning at any time and from anywhere, ING clients continue to demonstrate their satisfaction giving a score (NPS®) of +12.
ING won "Best Private Bank in Luxembourg" at the Global Private Banking Awards 2020 (Professional Wealth Management and The Banker), a merit that is recognised at home by Private Banking clients whose satisfaction reached a new record of +41 NPS®. The strong performance of mortgages and asset management in 2020 led to higher income than in 2019 in Private Banking. ING is a signatory of the Principles for Responsible Investment and in Luxembourg this responsible investment approach was recognised in 2020 by the “Towards Sustainability” label of FEBELFIN and the renewal for another year of LuxFLAG's prestigious ESG label for the fund “ING Aria Sustainable Bonds”.
ING Solutions Investment Management (abbreviated ISIM), the Luxembourg management company of ING, reached a record EUR 17 billion in assets under management last year. It currently manages out of Luxembourg funds that are distributed in 5 European countries. ING Lease, a subsidiary of the bank, managed to keep a stable portfolio throughout 2020 despite the reduced economic activity.
The financial result in Wholesale Banking suffered from the evolution of exchange rates (USD and GBP), partly compensated through fee income, and lower lending demand of corporates. Nonetheless, in 2020 the lending activity of the bank was again driven by Capital Call Financing granted to local investment funds, a start product of ING.
With a stable balance sheet of EUR 18.6 mln, ING remained resilient throughout the year 2020. The increased costs linked to the pandemic were largely compensated by savings in other areas; the level of risk costs of ING in Luxembourg remains more than reasonable when compared with the sector.