ING Direct 2008 Annual Report Download - page 48

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ING Group Annual Report 2008
1.2 Report of the Executive Board
46
PRIVATE BANKING
Private Banking reported a decline in asset accumulation to EUR 62
billion from EUR 68 billion at the end of 2007. Costs were well
contained. Underlying profit before tax fell 57.8% to EUR 111
million. Loan loss provisions in Asia were made as a result of the
exceptional market circumstances in 2008.
Private Banking aims to grow its assets under management by
focusing on gathering assets and building a strong foundation for
future revenues when the market recovers, while keeping a close
eye on margins and expenses. The uncertain economic situation
has stimulated many investors to move their assets into more
conservative products. ING benefited from its conservative profile
and from being the third largest savings bank in the world.
In the Netherlands, capitalising on the integration of Postbank and
ING Bank, Personal Banking was introduced. This is a new service for
clients with investments of between EUR 75,000 and EUR 500,000.
The service combines the investment advice strengths of both banks
and gives clients access to investment specialists. ING sold its
Curaçao Private Banking Business in 2008 in line with its strategy
to concentrate its activities on Europe and Asia. The focus for 2009
is on this region and offering more competitive products.
In January 2009, Private Banking announced it would transfer
the ownership of its investment business to ING Investment
Management Europe. This effectively means the European business
will become the investment management service provider of
choice for ING Private Banking globally. Despite this move, open
architecture – providing a wide range of third-party funds for
portfolios – remains one of the cornerstones of Private
Banking’s strategy.
The financial sector will continue to face market volatility, limited
liquidity and intensified competition for deposits. Private Banking
therefore expects its margins to remain under pressure. Private
Banking has been one of the most attractive businesses in
the banking industry, and although an economic downturn may
restrict growth in the short term, Private Banking expects its average
growth rate to remain above that of retail banking businesses
in general.
Asset management (continued)