ING posts record results: underlying net profit up 24.3% in 2006 to EUR 7,750 million
• Results demonstrate the solid earnings capacity of ING’s business portfolio
- 4th-quarter underlying net profit rises 37.4% to record EUR 2,124 million
- Net inflow of EUR 43.8 billion in 2006 brings assets under management to EUR 600.0 billion at year-end
- Full-year net profit increases 6.7% to EUR 7,692 million, or EUR 3.57 per share
- Total dividend proposed at EUR 1.32 per share, up 12% from EUR 1.18 in 2005
• Strong momentum continues at ING’s three key growth engines in 4th quarter
- Life insurance in developing markets post 23.5% increase in sales to EUR 530 million
- ING Direct adds EUR 5.4 billion in mortgages and maintains level of profitability in challenging environment
- Retirement Services accumulation product sales in the U.S. increase 21.7% in fourth quarter
• Strategic Focus for 2007: emphasise growth while maintaining high returns
- Returns are at attractive levels in all lines of business, with a RAROC of 20.4% and IRR at 13.3%
- Priority for 2007 is continued focus on profitable growth across all six business lines
- Continued attention for expense control while investing in growth opportunities
“Over the past three years we have consistently focused on growing our businesses, increasing returns, and improving the execution of the business fundamentals in order to create more value for our shareholders. Our results for 2006 show that this strategy continues to pay off,” said Michel Tilmant, Chairman of ING Group. “We have improved returns in all of our business lines by releasing capital from divested businesses and investing where we can generate growth at solid returns. Our growth engines continue to show strong business momentum.We have kept costs under control while investing in growth opportunities, improving operations in mature businesses, and strengthening compliance overall.”
“Our strong profit growth in 2006 demonstrates the solid earnings capacity of ING’s portfolio of businesses. While the current interest rate environment is challenging, particularly for our banking businesses, the interest margin stabilised in the fourth quarter. At the same time we have benefited from rallying equity and real estate markets, a benign credit environment, a favourable underwriting cycle in non-life insurance and lower taxes. The bulk of our businesses have shown a strong performance, although Japan and the U.S. individual life business require management attention, and we are actively addressing those.”
“Against that backdrop, ING produced record earnings. Our capital position is strong, allowing ING to raise the annual dividend by 12%, providing an attractive yield to our investors while retaining EUR 4.8 billion to invest in the continued growth of our businesses.”
“With returns at attractive levels, ING will emphasise growth in 2007 by seeking profitable growth across all six business lines. Our three growth engines – life insurance in developing markets, retirement services and ING Direct – will continue to be key drivers of growth. In addition, we will invest in new greenfields to create the next generation of growth engines.”
“In mature markets we also enjoy businesses with strong profitable growth segments, such as savings and mortgages, private banking, ING Real Estate and leasing. We will further leverage our strong position to achieve growth by sharpening our focus on the customer, enhancing product innovation and growing market share. At the same time we will work to improve execution, including efficiency, risk and compliance.”
“Looking forward, risk costs and non-life claims will trend gradually to more normalised levels,
however we do not anticipate a significant shift in the market environment over the coming
period. We are confident that ING is well positioned through our portfolio of businesses to
capture growth opportunities and continue to create value for our shareholders.”
Press Conference : 15 February, 9.30 a.m. CET
ING House, Amsterdam
Analyst presentation: 15 February, 11:15 am CET, ING House, Amsterdam
Analyst Conference Call: 15 February, 4 pm CET.
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Analyst Presentation: 16 February, 11:15 a.m. UK time
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Certain of the statements contained in this release are statements of future expectations and other forward-looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements due to, among otherthings, (i) general economic conditions, in particular economic conditions in ING’s core markets, (ii) performance of financial markets, including developing markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations, and (x) changes in the policies of governments and/or regulatory authorities. ING assumes no obligation to update any forward-looking information contained in this document.
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