ING Direct 2007 Annual Report Download - page 26

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ING Direct 6%
Rest 94%
U
nderlying profit before tax from
ING Direct declined 23.6% to EUR
530 million. Yield curves remained
flat or inverted in all currency zones,
while competition for deposits intensified,
as many banks faced tighter liquidity and
increased funding costs. The total client
retail balances grew to EUR 310.1 billion
at year-end. We continued to invest to
enhance commercial growth, through
geographical expansion and the roll-out
of new products. Underlying risk-adjusted
return on capital (RAROC) after tax
improved to 14.3%.
Launched in 1997, ten years on ING Direct
is the world’s leading direct bank and in
2007 reached the milestone of 20 million
customers worldwide.
In 2007 we continued to invest in long-
term value creation, with growth derived
from three sources: continued strong
increases in customer numbers in existing
countries, further geographical expansion,
and continuing to broaden and develop the
business through four product categories:
savings, mortgages, payment accounts and
investment products.
Expansion and acquisitions
ING Direct USA extended activities to
Miami, Seattle and Houston to add to the
ten US cities where we’re already actively
marketing. We’re also preparing to launch
on the EUR 4.9 trillion Japanese savings
market, where we’re in the process of
obtaining our banking licence.
Organic growth was complemented by
three acquisitions: USD 1.4 billion of
US-based NetBank retail deposits,
including 104,000 customers; purchase
of US ShareBuilder Corporation’s online
brokerage business, adding 744,000
customers and USD 2 billion assets under
management; and in Germany a mortgage
portfolio of EUR 3.9 billion from Hypo
Real Estate Bank AG.
Technology makes available so
much information that people
can reach information overload.
We want to ‘decomplicate’
people’s lives. Most people
don’t want to spend their free
time comparing different
products. So we aim to make
the choice easy for customers
by offering a select number
of good, simple and
straightforward products.
We started with savings
accounts and diversified into
mortgages, investment
products and payment
accounts. In 2007, our
mortgages did particularly
well, and we’ve become
major mortgage providers
in Germany and the US.
We’re continually
simplifying
procedures to make
sure our service is
fast and high
quality. That’s our
differentiator.
Profit and loss account (underlying)
in EUR million 2007 2006 change
Total income 2,196 2,233 –1.7%
Operating expenses 1,598 1,482 7.8%
Additions to loan loss provisions 68 57
Underlying profit before tax 530 694 –23.6%
Total profit before tax* 530 691 –23.3%
* Total profit before tax is defined as profit before tax including divestments and special items.
Dick
Harryvan
Underlying profit before tax
in percentages
Number of clients
in thousands 2007 2006
Canada 1,526 1,491
Spain 1,624 1,455
Australia 1,316 1,414
France 716 626
United States 6,524 4,629
Italy 937 792
Germany 6,124 5,703
United Kingdom 1,137 1,099
Austria 357 302
Total 20,262 17,511
24 Our performance
ING Direct