ING Direct 2011 Annual Report Download - page 44

42 ING Group Annual Report 2011
Commercial Banking continued
Major deals
Despite the subdued market conditions, Commercial Banking
continued to support its clients through many transformational
transaction mandates.
In each instance, we worked closely with our clients to deliver
highly tailored solutions. For example:
• Lead advisor to Jumbo Group Holdings on its acquisition of
Dutch supermarket C1000. This transaction strengthened ING’s
mergers and acquisition (M&A) track record and demonstrated
our excellent financing capabilities, expertise in tailor-made
subordinated debt and equity-like products, and strong
relationships with Jumbo and other stakeholders.
• ING advised Couckinvest in its successful public (to private) offer
for all outstanding shares of Omega Pharma N.V., one of
Belgium’s largest listed corporations. ING also acted as a
lead-arranging bank for the acquisition facilities needed for this
landmark transaction.
• Full-scope financing solution for VimpelCom to support its
merger with Wind Telecom and transforming it into a top-five
global telecommunications player. This multi-faceted transaction
incorporated the largest ever eurobond offering placed by a
non-sovereign Russian issuer.
• Four-year appointment by the Flemish government in Belgium,
to cover all incoming and outgoing payments, as well as
short-term placements and lending by the Flemish Government.
ING secured the mandate from previous incumbent Belgian
banks. The deal is expected to incorporate a payments volume
of EUR 90 billion per year, 10,000,000 transactions per year,
600 accounts and 200,000 salary payments per month.
GENERAL LENDING AND PCM
GENERAL LENDING
Lending is a core element and anchor product in building and
supporting client relationships in our target markets creating a
position from which we are able to provide other services.
Volumes gradually increased throughout the first half of 2011 and
while margin pressures have increased, our average margin remains
far above pre-crisis levels. ING has maintained its position as (co-)
market leader in the Benelux market, and selectively increased its
franchise within Central and Eastern Europe and other Western
European markets.
In the second half of the year, market conditions significantly
deteriorated and cost of funding increased. Anticipated increases
incapital requirements under Basel III led to a number of
competitor banks withdrawing from international markets and
focusing on their home country franchises. ING has sustained its
presence throughout this time and our relative market positioning
strengthened as a result. We are beginning to see a positive
re-pricing in our portfolio with further opportunities to improve
thequality of our business and our relationships.
PAYMENTS AND CASH MANAGEMENT
Payments and Cash Management (PCM) is one of our most
important product lines. Alongside General Lending, we consider
it a pre-requisite for customer acquisition and retention. During
2011, ING re-defined its PCM strategy. Our ambition is to gain a
leading position in the European market and we have launched a
multi-year investment programme to this end. In the coming
years, we will significantly improve our payments offering to
support these goals.
The year also saw significant steps taken to identify and address
non-core businesses, while increasing our focus on core markets
and client franchises. We prioritised the allocation of resources
across our business lines and streamlined our operations in response
to growing regulatory demands and economic uncertainty.
Examples of this include the sale of the ING Car Lease business to
BMW Group in September for EUR 696 million and the divestment
of ING Real Estate Investment Management for EUR 770 million
(approximately USD 1.0 billion), the majority of which was sold to
CBRE Group, Inc. In addition, we took steps to realign our General
Leasing business with our core Commercial Banking franchises,
which will result in ING’s exit from non-core activities in several
countries outside our home markets. Meanwhile, we have
continued to narrow our legacy Real Estate development and
investment portfolio, reducing our residual exposure.
All of these steps have enabled us to sharpen our focus on our
corebusiness and reallocate the capital required to achieve our
future ambitions.
MARKET LEADERSHIP
In addition to recognition by the industry experts previously
mentioned, Greenwich Associates client research states that
among large corporations we maintained our strong position as
number 1 bank inthe Netherlands both in terms of penetration
andlead relationships.
Global Finance named ING the Best Investment Bank in the
Netherlands and ‘Best Trade Finance Bank in the Netherlands’.
ING has also retained its number 1 position as book runner
forsyndicated loans in the Benelux by volume and value and
number 2 position as Merger & Acquisition adviser in the Benelux
byvolume and value.
Financial Markets was able to demonstrate its strength in various
areas in 2011:
• Corporate investment grade bonds (Benelux): 8th by value and
4th by deal volume.
• Europe sovereign investment grade bonds: 8th by value and 6th
by deal volume.
• US Private Placements: 1st by deal volume Benelux and 3rd
bydeal volume in Continental Europe. ING was involved as
Bookrunner in USD 1.8 billion from a total value of USD 3.6
billion in Benelux US Private Placements transactions.
ING Equity Markets was named Leading Equity Brokerage Firm in
both the Benelux and Central and Eastern European markets in the
annual Extel Pan European survey 2011. We scored top positions in
areas such as Research, Sales and Trading, both on a company and
individual level, reflecting the strength we continue to have in our
home countries.
Payments and Cash Management (PCM) was ranked second by
volume in Euro Banking Association’s clearing and settlement
systems (Euro1/Step1).
Greenwich Associates client research confirms PCM’s strong position
in the Netherlands and that ING is the most often used cash manager
for Dutch companies in Central and Eastern Europe while being equal
first in Belgium for services in Central and Eastern Europe. In the
Netherlands, PCM is market leader in the domestic factoring market.