ING Group has published its 2004 figures. The highlights include: operating net profit increases 33.0% to â¬5,389 million, net profit increases 47.6% to â¬5,968 million (â¬2.80 per share), operating net profit from Banking rises 55.6%, led by ING Direct, Wholesale Banking, operating net profit from Insurance rises 19.0%, led by Asia/Pacific, Americas.
âIn the past year we have seen some significant changes at ING,â said Michel Tilmant, Chairman and CEO. âThe new Executive Board took a critical look at the businesses within the Group and sold many units that either did not fit in our strategy, or did not meet our criteria for economic returns. That divestment programme is now largely completed. However, portfolio management is a continuous process, and the Group will continue to allocate capital with the aim of strengthening INGâs returns and
âIn all, the financial results in 2004 were encouraging. Operating net profit reached an historic high. Total operating income increased 10.6% excluding the impact of acquisitions, divestments, and currency effects. The insurance business lines posted strong growth in premium income, while productpricing was adjusted to increase returns on new business. The banking business lines continued to benefit from lower risk costs, and operating income showed a solid increase, despite pressure on interest rates in the past year. Although we saw some one-offs and non-recurring expenses in the fourth quarter, underlying costs were contained, except at Nationale-Nederlanden, where we continued to invest deliberately to meet the structural improvements required.â
âThe divestments enabled us to improve the debt/equity ratio to 9.9% at the end of 2004, in line with our 10% target. Sales completed in 2004 resulted in a release of EUR 1.5 billion in regulatory capital that will be invested to support the growth of businesses such as ING Direct, the activities in developing markets such as Asia and Central Europe, and the retirement services business such as in the U.S.â
âWith our capital position strengthened, we have decided to change to a full cash dividend, starting with the final dividend for 2004. In 2005, we will focus on execution to increase value creation for our shareholders.â
ING Real Estate
ING Real Estateâs total portfolio, including the real estate finance portfolio, increased by â¬7.9 billion to â¬50.1 billion, compared with year-end 2003. The increase was driven mainly by strong organic growth in real estate finance and investment management. The real estate investment management portfolio increased by â¬4.6 billion to â¬30.9 billion, mainly due to the introduction of ten new investment funds.
ING Clarion Global Real Estate Income Fund (U.S.), a listed fund which had â¬2.2 billion in assets under management by year-end, was the largest-ever initial public offering of a real estate fund in history. The acquisition of Rodamco Asia also added â¬800 million to property assets under management.
The real estate finance portfolio increased to â¬17.1 billion from â¬13.8 billion at year-end 2003. Roughly two-thirds of the increase stemmed from new business won in an extremely competitive environment, while the remaining third was the result of internal transfers. The real estate development portfolio was stable at â¬2.1 billion.
Development activities returned to a more normalised level. Prominent real estate projects were delivered in Belgium, Czech Republic, Italy and the U.S. Sales proceeds of completed projects amounted to approximately â¬900 million, which were re-invested in new projects.
Source: ING Group