ING Direct 2013 Annual Report Download - page 38

WestlandUtrecht Bank continues to service remaining portfolios
within ING Retail Banking Netherlands.
RETAIL BELGIUM
FINANCIAL DEVELOPMENTS
The underlying result before tax of Retail Belgium increased 10.3%
compared with 2012 to EUR 663 million, due to higher income
supported by volume growth.
Underlying income rose 5.8% to EUR 2,321 million, from EUR 2,194
million in 2012, mainly reflecting higher interest results driven by
further growth in customer balances, while margins on current
accounts declined. In 2013, net production in funds entrusted was
EUR 3.7 billion. The net mortgage production was EUR 1.0 billion,
while other lending grew slightly by EUR 0.1 billion.
Operating expenses increased 3.6% compared with 2012 to EUR
1,476 million, mainly due to higher expenses for the deposit
guarantee scheme and inflation-driven cost increases, which were
partly offset by the benefits from the efficiency programmes. Risk
costs were EUR 183 million, or 89 basis points of average risk-
weighted assets. This is an increase of 8.9% on 2012, reflecting
higher additions for business lending and mortgages, though the
latter still remained relatively low.
BUSINESS DEVELOPMENTS
Following the 2012 recession, economic growth picked up in
Belgium in 2013, with gross domestic product increasing by 0.2%.
Private consumption started to recover in 2013, increasing by 0.6%
in real terms, and house price growth stabilised just above the
inflation rate. The improvement in household confidence implied a
slightly higher risk appetite. As a result, savings deposits increased,
but at a lower pace than in the years before 2013.
The ING investor barometer showed improved confidence among
retail investors throughout the year.
ING Belgium (ING BE), one of the largest retail banks in the country,
provides its 2,400,000 (year-end 2013) private and business
customers with a full range of banking products and services. It
continued to carry out its “direct if possible, advice when needed”
strategy. It maintained its leading position as a strongly customer
focused bank. This was evidenced by, among other things, winning
the 2013 “Bank of the Year – Belgium” award from The Banker in
recognition for “its solid financial and commercial performance”
and “its strategy for investing in new channels”.
The Bank continually responds to the fast-changing customer
behaviours and expectations and adopts new technologies to meet
their needs. It improved its direct channels, both for private and
business customers. It launched, for example, a new app for tablets
and, in September, ING BE became the first bank in Belgium where
business customers can sign and activate their business lending
contract online. ING BE’s specialist advisers were equipped with a
new computer device that enables customers to sign for advice-
related products such as investment or lending products outside
the branch, for example at home. This project, which started in
2013, will be further rolled out in 2014.
Over the past four years, direct sales of simple online products have
more than doubled, accounting for more than 40% of ING BE’s
total simple product sales. Coupled with the increasing number of
cumulated downloads of its mobile application since 2011
(448,000), this confirms the increasing use of direct banking by its
customers. Daily mobile transactions more than tripled year-on-year
in 2013.
ING BE also continued the transformation programme for its branch
network and 63 branches were renovated. By year-end, more
than600 out of 748 branches had been completely refurbished
intoopen and more customer-friendly branches. The branches are
atthecrossroads of advice and online banking in ING BE’s
distribution model.
Private Banking, which has a top three position in Belgium, was
awarded “Best Private Bank in Belgium” by the magazine World
Finance. The total amount of Private Banking funds entrusted and
assets under management in Retail Belgium was EUR 17.6 billion
(+ 4.9% since 2012).
The Bank’s continuous efforts to make banking easy paid off. For
the 7th year in a row, ING Belgium experienced a net year-on-year
growth of its customer base. The net growth of active customers
amounted to 62,000, to a total of nearly 500,000 active customers
since the introduction in 2007 of its “direct if possible, advice when
needed” strategy.
Moreover, for the first time, more than 100,000 ING Lion accounts,
the Bank’s free online current account, were opened in one year.
As a result of fundamental changes in customer behaviour, in
particular the greater use of online and mobile banking, ING BE
announced in early 2013 a plan to reduce the number of employees
between then and the end of 2015. While the number of
employees in Belgium decreased, mainly as a result of natural
attrition, the Bank continued to hire new people. In 2013, 314 new
FTEs were welcomed at ING BE. Given the external challenges, the
Bank raised its focus on cost containment. While continuing to
invest in innovative customer-oriented solutions, ING BE ensured
that other expenses were either frozen or reduced.
The new Collective Labour Agreement, which was signed at
theend of 2013, aims to moderate the rise in salaries until 2016.
Customer centricity
ING BE continued to offer products and services that best meet
customers’ needs and to improve access through new mobile
banking facilities. ING BE’s mobile banking app, Smart Banking,
was launched for tablets in 2013, providing a user experience in line
with customer expectations for a tablet device. With this app
customers can easily manage their income and expenditure with
the “My budget” tool, and make transfers to any beneficiary.
ING BE’s open guided architecture fund range regrouping high
quality funds from selected investment companies experienced a
consistent above-the-market performance. The open-guided
architecture fund offer was enlarged with the launch of the ING
Core Fund. This Fund, which groups a limited selection of funds
from several investment companies with a Morningstar rating of
three stars or more, witnessed the strongest increase in funds
entrusted of all funds over the past five years.
Since 2013, all branches have also been equipped with Wifi and
iPads, to help ING BE’s customers discover the multiple advantages
of online and mobile banking.
The Bank invested in new customer intelligence and lead-
management solutions, enabling it to offer the right product
totheright customer, at the right moment, and through the
rightchannel.
36 ING Group Annual Report 2013
Retail Banking continued