Strong performance of investment products give ING a boost

ING Group has posted a net result of €1 billion for the first quarter of 2021 – an increase of 50% compared to the equivalent quarter in 2020.

The fee generating business was boosted by the continued growth of investment products, particularly in Germany and Belgium, according to CEO Steven van Rijswijk (pictured).

Some €284m fee and commission income was generated from investment products during the quarter (Q1 2020: €227m) while the total fee income, at €854m, was up 9.1% year-on-year (YoY). 

Complex instruments are offered only to customers with appropriate knowledge and experience

ING’s core fee generating business comes from well-diversified funds, portfolios and ETFs, aimed towards long term investments solutions, a spokesperson for the group told SRP.

“In addition, many of our customers benefit from access to other instruments like shares, bonds, as well as more complex products such as structured notes and sprinters […] complex instruments are offered only to customers with appropriate knowledge and experience,” the spokesperson said.

In its home market of the Netherlands, ING issued 15 private placements in Q1 2021, down 29 YoY. Of these, 14 were barrier phoenix notes, which put full capital at risk. They were linked to either the Eurostoxx Select Dividend 30 (eight products) or Eurostoxx 50 (six). The sole (partially) capital-protected structure was tied to Stoxx Global Select Dividend 100 and returns minimum 86.5% of the nominal invested after seven years.

In Belgium, the bank launched 6Y EUR Coupon Notes 02/27 and 6Y USD Participation Notes 02/27 –two subscription-based products linked to the Stoxx Global ESG Leaders Select 50 EUR Index and Stoxx Global Select Dividend 100 USD, respectively. The former offers a potential annual coupon of 2.20%, with a minimum return of 90% while the participation notes are fully capital-protected and offer 100% of the rise in the index, capped at 25%.

ING also issued just under 9,000 open-ended leverage certificates in the first quarter of 2021 (Q1 2020: 13,387). Some 7,388 were targeted at retail investors in Germany, the country where it registered its strongest growth in fee income on investment products, with the remaining 1,558 certificates aimed at investors in the Netherlands where they are marketed as ‘sprinters’.

Underlyings for the group’s leverage products, which are listed in Frankfurt and Euronext Amsterdam, ranged from single indices (4,646 products) and shares (2,426) to commodities (1,492), FX rates (292) and interest rates (90).

The Dax was the number one underlying of the German investor, seen in 2,646 products during the quarter, followed by gold (595) and DJ Industrial Average (482) while in the Netherlands the local AEX index was the preferred underlying (587).

Total income for the quarter, at €4.7 billion, included ‘other’ income (€296m), which was up 44.4%, supported by positive valuation adjustments and improved results from most trading desks. In contrast, 1Q 2020 had been affected by market volatility due to uncertainty caused by the Covid-19 pandemic.

During the quarter, ING closed a record of more than 50 green deals in a growing number of sectors as clients increasingly focused on making their businesses sustainable and linking their efforts in this area to their financing.

As of 31 March 2021, debt securities in issue stood at €90 billion (end-December: €82.1 billion). Financial liabilities at fair value through profit or loss in the group’s consolidated balance sheet, at €91.9 billion, included trading liabilities (€29.7 billion) and non-trading derivatives (€2.86 billion).

Click the link to view the ING Group first quarter 2021 results and the presentation.