ING Luxembourg Posts Net Profit of €90m for 2020

ING has published the 2020 financial results of its Luxembourg branch, which posted a net profit of €90 million. 

ING noted that despite the unprecedented circumstances related to the COVID-19 pandemic, its Luxembourg branch "delivered solid commercial and financial results" last year. Throughout the crisis, ING has provided its clients with a total of 2,000 payment holidays and over €250 million in new loans and leasing contracts for business customers.

Despite the economic situation, which put continued pressure on net interest income, ING’s results in Luxembourg remained resilient throughout 2020. Diversification of income to compensate the weakened demand for consumer and business loans yielded an income level of €300 million, in line with expectations given the low interest margin in foreign currency deposits. ING recorded an underlying net result of €90 million (down 22%) after increased risk costs given the pandemic (€8 million, up 5% compared to 2019) and after paying taxes in the amount of €30 million. Careful cost management kept the cost-income ratio at 57%. ING’s solvency remained strong at 21%.

The bank’s strategy to deliver a differentiating customer experience materialised in a continued increase in primary bank clients: 49% of clients chose ING as their main bank. To safeguard the health and safety of its customers, ING enabled them to do their banking and payments at a distance through digital and contactless solutions. In 2020, 86% of ING’s customers had adopted "My ING" and 42% of active customers only interacted with the bank using the mobile application. 

In addition, 2020 saw ING establish a new business segment called "Business Banking" that works to provide business clients "frictionless banking with an entrepreneurial spirit". 

Despite a very low interest rate environment, the pandemic and lower credit demand, Retail Banking activity delivered higher income than in 2019, driven mainly by the growth of the mortgage portfolio (up 7%). 

ING won "Best Private Bank in Luxembourg" at the Global Private Banking Awards 2020 (Professional Wealth Management and The Banker). The strong performance of mortgages and asset management in 2020 led to higher income than in 2019 in Private Banking. ING is also a signatory of the Principles for Responsible Investment and in Luxembourg, this responsible investment approach was recognised in 2020 by the “Towards Sustainability” label of FEBELFIN and the renewal for another year of LuxFLAG's prestigious environmental, social and governance (ESG) label for the fund “ING Aria Sustainable Bonds”.

Moreover, ING Solutions Investment Management (ISIM), the Luxembourg management company of ING, reached a record €17 billion in assets under management last year. It currently manages out of Luxembourg funds that are distributed in five European countries. ING Lease, a subsidiary of the bank, managed to keep a stable portfolio throughout 2020 despite the reduced economic activity.

The financial result in Wholesale Banking suffered from the evolution of exchange rates (USD and GBP), partly compensated through fee income, and lower lending demand of corporates. Nonetheless, in 2020, the lending activity of the bank was again driven by Capital Call Financing granted to local investment funds, a start product of ING.

With a stable balance sheet of €18.6 million, ING remained resilient throughout 2020. The increased costs linked to the pandemic were largely compensated by savings in other areas and the level of risk costs of ING in Luxembourg remained reasonable when compared with the sector.

“It has been a rollercoaster year. The way our people continued to deliver for our customers during this Covid crisis, has been fantastic. Seeing colleagues supporting one another and helping each other to be successful has been a source of pride,” commented Colette Dierick, CEO of ING Luxembourg, pointing out that ING in Luxembourg was certified Top Employer in 2020 and in 2021 for the third year in a row.

Although the bank could not paint Luxembourg City orange as it is used to do for the 15th edition of the ING Night Marathon Luxembourg, it made its mark on the community through other initiatives such as volunteering for the Fit For Life programme of Jonk Entrepreneuren and the Money Week coordinated by the ABBL just before the lockdown. ING supported financially its long-term partner UNICEF and the Luxembourg Red Cross’ social grocery stores that saw demand increase sharply during the pandemic. The bank also supported local musicians in collaboration with its partner, Rockhal, with a series of concerts streamed online. Moreover, as the National Library of Luxembourg (Bibliothèque nationale du Luxembourg - BnL) opened its doors following its refurbishment, ING donated a painting by artist Joachim van der Vlugt, a Dutch painter who lives and works in Luxembourg.

ING currently counts 134,000 clients in Luxembourg.