ING Direct 2011 Annual Report Download - page 43

1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
41ING Group Annual Report 2011
Commercial Banking continued
grow our German franchise, focusing on multinational companies
that benefit from our international network, in particular our
franchise in Central and Eastern Europe.
BUILDING THE PREFERRED BANK
Commercial Banking’s strategy supports ING’s ambition to be a
preferred European bank with a global reach and an uncompromising
dedication to customer centricity and operational excellence.
Customer centricity
ING Bank was voted ‘Best Bank in the Netherlands’ by The Banker
and named ‘Best M&A Financial Advisor of the Year’ in the Benelux
region by the Financial Times and Mergermarket. These awards
demonstrate the strength of ING’s relationships with its clients,
aswell as the importance of its international network.
Our international networkprovides an effective platform from
which to service our multinational clients, especially those from the
US and Western Europe, and particularly their operations in Benelux
and Central and Eastern Europe.
To further enhance our emphasis on customer centricity we
launched the International Business Initiative, aimed at providing
clients with excellent cross-border service. We have continued to
simplify our processes (for example, for international account
opening, indirect bank guarantees and standby letters of credit)
and created several tools to facilitate the provision of these services
in order to increase client satisfaction.
A Net Promoter Score methodology was also adopted by
Commercial Banking to assess customer loyalty and requirements
and to improve our products and services. Initial surveys in the
Netherlands and Belgium have provided valuable insights into
customer priorities and our services.
Structured Finance (SF) maintained its client-centric approach,
receiving many external awards. These included The American
Power Deal of the Year from Project Finance International for the
USD 800 million financing for the CPV Sentinel gas-fired power
plant, and Asia Pacific Petrochemical Deal of the Year Award from
Euromoney for the USD 1.6 billion financing for Jurong Aromatics
Corporation. In commodity finance, SF was assessed as number 1
in the FImetrix Client Satisfaction Index.
In SF, the record level of non-interest revenue reflected fees on
structuring new transactions, as the business helped many clients
to refinance in the first half of the year.
Operational excellence
We have continued to strengthen our operations by further
integrating our activities and standardising the way in which we
work. We have made significant progress towards optimising our
balance sheet and legal entity structure, across regions and
functions, better aligning our asset generating capabilities with
ourability to raise customer deposits.
Other steps were also taken to optimise our balance sheet,
including the structural transfer of assets from more funding
constrained entities to those where liquidity is available.
Approximately EUR 3.5 billion of such transfers were made in 2011,
with a significant amount already planned for 2012.
in2011, partly compensated by higher income from Structured
Finance. Underlying operating expenses were 4.4% lower at
EUR 2,527 million driven by lower impairments on real estate
development projects. The underlying cost/income ratio was
50.3%, slightly up from 49.4% in 2010.
Risk costs decreased to EUR 476 million compared with EUR 489
million in 2010. Declines in Structured Finance and General Lending
were partly offset by higher risk costs in Real Estate Finance and
Leasing. In 2011, risk costs were 35 basis points of average
risk-weighted assets up from 33 basis points in 2010.
The underlying return on equity, based on a 10% core Tier 1 ratio,
decreased slightly to 11.2% from 11.6% in 2010, due to the decline in
results, partly offset by lower average risk-weighted assets supported
by positive risk migration. At year-end 2011, however, risk-weighted
assets were 3.5% higher than in 2010, due to the implementation
ofCapital Requirements Directive III in December 2011.
BUSINESS DEVELOPMENTS
ING Commercial Banking supports the banking needs of our
corporate and institutional clients and is an integral part of ING’s
One Bank ambition and strategy, originating high-quality assets
that earn attractive returns in which to invest both Retail and
Commercial Bank customer deposits.
We aim to be a trusted adviser for the long-term, byproviding
solutions to clients’ financial challenges and flawlessly executing
the services we offer. By fulfilling our clients’ needs, we have
become one of Europe’s leading commercial banks in our core
markets and an important partner for clients internationally.
We are a full-service commercial bank in our home markets in the
Benelux, as well as in Germany, Central and Eastern Europe. In
addition to the basic banking services of lending, payments and
cash management and treasury, we provide tailored solutions in
other areas, including specialised and trade finance, derivatives,
corporate finance, debt and equity capital markets, leasing,
factoring and supply chain finance.
Our clients include mid-sized enterprises, large corporations, major
multinationals, financial institutions, governments and
supranational organisations. We assist them by financing their
growth, managing their day-to-day banking needs and by
providing a full range of banking solutions to help them manage
their risks and achieve their business goals.
We are building on our strengths in Industry Lending, covering both
Structured Finance and Real Estate Finance, franchises with
recognised origination, structuring and risk management skills in
selected industries on a global scale.
Our global Financial Markets platform continues to focus on clients
and products in home markets and in emerging markets.
The Transaction Services organisation has been created to be a new
pillar within Commercial Banking, in which core payments, trade
and other flow products are offered to our clients.
In Germany, we completed the merger of the Commercial Banking
branch with the retail subsidiary ING-DiBa AG. This combined
entity, having a very strong local balance sheet, positions ING to