ING News
Luxembourg, 21/05/2020
The coronavirus crisis has serious consequences for the economy of our country. At the same time, it has given ING opportunities to live up to its purpose of empowering people to stay a step ahead in life and in business. Throughout this unprecedented sanitary and economic crisis, ING has accompanied its clients, private and professional, to advise and support them, providing a tangible helping hand through more than 2,000 payment holidays and over EUR 250 million of new loans and leasing contracts for business customers.
The health and safety of ING staff was top of mind for the Executive Committee throughout the year, and continues to be so. ING’s offices were adapted to the new situation to allow for a safe working environment for staff present: introducing new signage to indicate safe distances, directions of foot traffic, and distributing thousands of branded masks and hand gel to staff. ING employees received assistance in setting up their home ‘offices’, and online wellbeing information was made available to all. In November 2020, ING was awarded the CSR Initiative Award, supported by INDR, during the Luxembourg HR Awards ceremony. The jury underlined ING’s successful strategy to adapt to new CSR requirements following the pandemic: the bank managed to keep its employees engaged through a variety of local actions highlighting its cultural diversity.
With on average 80 percent of its workforce working from home since mid-March 2020 under the motto “Far but close”, ING continued to serve its customers. The possibility to work from home was already available in ING since 2011 and in 2019, about 20% of staff took advantage of this possibility. The speed with which the Bank was able to switch to an almost complete remote-working model within two weeks is testament to the Bank’s agile model.
In June 2020, the Bank adopted a “return to the office” model that consisted in rotating teams. Unfortunately, with the recrudescence of infections in the autumn the CSSF suggested again to its supervised entities to favour homeworking and ING switched back to having c. 80% of staff working remotely. As the vaccination programs of Luxembourg and the Greater Region advance, the Bank works on the “new normal”, taking into account the effect of social security and cross-border fiscal regulations that affect a significant part of ING’s staff.
Empowering people to stay a step ahead in life and in business in a time of crisis means to reach out pro-actively to clients, staying closely connected and having regular conversations to see how they're doing and to understand how their business models are holding up to the new challenges they’re facing. From the very beginning, ING wanted to be part of the solution – whether from home or in branch. The coronavirus crisis has accelerated the urgency of implementing end-to-end digitalisation, both to meet the growing demand for mobile banking and to enhance operational excellence. Operational excellence in particular helps to ensure that ING’s customers are able to do their daily banking without disruption, even during global lockdowns, and makes it possible for employees to work safely and securely from home.
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.
“It has been a rollercoaster year. The way our people continued to deliver for our customers during this Covid crisis, has been fantastic. Seeing colleagues supporting one another and helping each other to be successful has been a source of pride,” comments Colette Dierick, CEO ING Luxembourg, pointing out that ING in Luxembourg was certified Top Employer in 2020 and in 2021 for the third year in a row.
Although the bank could not paint the City of Luxembourg orange as it is used to do for the 15th edition of the ING Night Marathon Luxembourg, it made its mark on the community through other initiatives such as volunteering for the Fit For Life program of Jonk Entrepreneuren and the Money Week coordinated by the ABBL just before the lockdown. ING supported financially its long-term partner UNICEF and the Luxembourg Red Cross’ social grocery stores that saw demand increase sharply during the pandemic. The bank supported local musicians in collaboration with its partner, Rockhal, with a series of concerts streamed online. And as the National Library of Luxembourg (BnL) opened its doors following its refurbishment, ING donated a painting by artist Joachim van der Vlugt, a Dutch painter who lives and works in Luxembourg.
“As we look towards the future, and we hope for a speedy recovery, we are more than ever committed to play our vital role in the local economy and continue empowering people and business alike to stay a step ahead. We owe it to our clients to be part of the solution. That’s how we make good on the trust our clients place on us and on their willingness to recommend our services to others”, states Mrs Dierick.