ING's new structured products strategy is taking shape with the Dutch bank announcing the launch of a dedicated team for products for retail and institutional investors.
The move comes after the bank, in a strategy update for financial markets (which is part of the wholesale banking division) in October 2016, declared an intention to offer structured notes only to professional financial institutions, and no longer to external financial intermediaries, partly to control risk management for its clients.
"ING Wholesale Banking remains committed to the distribution of structured notes and over-the-counter (OTC) derivatives (all underlyings) from the different home countries to our own retail and private banking clients via the new investment products retail (IPR) team as well as to our corporate equity derivatives solutions offering," said Dick Ravesteijn (pictured), managing director, head of IPR & client execution services at ING.
Ravesteijn, who has been with ING in a variety of roles since 1996, will head the IPR team, while the corporate equity derivatives solutions offering will be under Guido van Ingen, head of corporate sales for Western Europe & Americas.
ING also announced that it is moving the risk trading for its leverage products, the ING Sprinters, to London. Sprinters sales and marketing, together with the new IPR team and client execution services, will continue in Amsterdam, according to a spokesperson. "All global sales activities, sprinters or other, remain in Amsterdam," the spokesperson said.
The fact that ING no longer offers certain services, specifically the sales of structured notes to external financial intermediaries, has also had an impact on the bank's employees, with a number of people leaving the bank. In May, Alain Flas, global head of sales for products for private investors left ING to join Finvex, where he started a new role as chief executive officer, while Marcel Pronk, director, sales of structured products for private investors left the bank in August.
In its results for the second quarter of 2017, ING reported that the wholesale banking division delivered an underlying profit before tax of €778m, up 2.6% on the second quarter in 2016. The result reflects strong performance in general lending and transaction services and industry lending, while income in financial markets held up despite low volatility, according to the bank.
Financial markets posted an underlying result before tax of €63m, down from €116m in the second quarter of 2016 and €98m in the previous quarter. The result in the current quarter included minus €39m of credit value adjustment (CVA)/debt value adjustment (DVA) compared with minus €57m of CVA/DVA a year ago and €36m in the previous quarter, according to the bank.
Income for financial markets, excluding CVA/DVA, decreased 14.8% year-on-year, mainly due to lower income in equities and rates: rates was affected by the lower volatility in the market. Sequentially, income excluding the effect of CVA/DVA was resilient and rose 0.6%, supported by higher income in the structured rates, corporate finance and securitisation businesses. Operating expenses increased 7.2% year-on-year due to higher regulatory expenses. Excluding regulatory costs, expenses increased 0.5% year-on-year, reflecting higher investments in IT infrastructure. Compared with the first quarter of 2017, expenses decreased 14%, due to lower regulatory costs.
Click the link to view the ING 2Q2017 results.
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