ING Groep NV Q1 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Raul Sinha - JP Morgan Chase & Co, Research Division - Analyst : Ralph, I've got maybe two. One, a very long-term question for you, given we might not get another chance to ask you this. How do you think, Ralph, the riskiness of the loan book at ING has changed since the GFC? I'm sorry for such a long time duration, but it'd be useful to get your perspective just in terms of where do you think the risk concentration might be given the sort of crisis we are seeing? And what are the areas that you're closely managing, particularly if you could touch upon how you think the oil book will react given you had very limited losses in 2015. So how should we think about that, its past and your guide to the future when it comes to your risk costs? And then the second one is just around capital and the moving parts, perhaps some detail there. Could you -- maybe, Tanate, could you give us some more detail around what are the positive driving factors maybe later in the year that might help your capital ratio? I'm thinking about smaller things like the SME supporting factor, the software deduction. Is there anything else you can do in terms of managing the loan book? And if you'd like to flag perhaps the credit risk migration, which was a positive in this quarter, does that become negative going forward?

Question: Omar Fall - Barclays Bank PLC, Research Division - Analyst : Can you hear me?

Question: Omar Fall - Barclays Bank PLC, Research Division - Analyst : Great. Just a couple of questions. Firstly, on commissions, could you give us a sense of what you think is sustainable versus what's more a function of the Q1 volatility given the number was extremely strong. I know there's seasonality, but should we basically be looking at the EUR 50 million sequential improvement as a pretty good guide of that? Otherwise, maybe another way to look at it would be how much growth the 170,000 in new investment accounts in March and April represents in percentage terms? I don't know what the base is. And then the second question is just a clarification. Sorry, if I may have missed this, but could you give us the actual amounts of payment moratorium across the entire group? As of today, would be even better. I know you mentioned 100,000 accounts, but just the absolute loan amounts would be helpful. And since I'm last, I'll be cheeky and try and fit in a third. But I didn't really get the answer from the -- one of the first questions as to what the actual GDP assumptions were that you used at end of March based on consensus. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 08, 2020 / 7:00AM, INGA.AS - Q1 2020 ING Groep NV Earnings Call

Question: Omar Fall - Barclays Bank PLC, Research Division - Analyst : Great. And just as a follow-up for Steven, maybe a stupid question, but how do you define direct oil price risk in your oil and gas book? I only ask because some of the high-profile trade finance companies that have encountered difficulties recently, I'm guessing, would be in the no direct oil price risk as per Slide 32 of your slides. So I'd be interested in exactly how this is defined.

Question: Kirishanthan Vijayarajah - HSBC, Research Division - Analyst : Just a couple of questions from my side. Firstly, coming back to RWAs, clearly lots of moving parts. But in terms of the underlying, I mean, what's the organic growth rate in RWAs we should really be thinking about for the rest of the year, if we park a lot of that regulatory noise to one side? And then just linked to that, coming back to the credit facility drawdowns in wholesale, I think you said that started to reverse after the quarter end. So could we have a sense of magnitude? Do you think most of that EUR 11 billion, I think you said, drawdown, does that fully reverse, you say, by the end of this year? Steven J. A. van Rijswijk - ING Groep N.V. - Chief Risk Officer, Member of the Executive Board & Member of Management Board Banking I think on the RWA, I mean, typically, if you look at our RWA density, that's around 60%. So if you project a certain growth, and I think we alluded to what Ralph said, what we thought about Wholesale Banking and what we thought about Retail Banking, then that's basically the calculation that you could make. If you look at drawdowns of -- maybe I should add in RWA that if you look at retail growth compared to Wholesale Banking growth that density of RWAs in retail is lower than in wholesale. So I think that gives you some pointer also of how to calculate it. If you look at the drawdowns, how much has it come back? Yes, let's say, half of the normal level that we see. So the levels that it increased with, half of it came back. And we have disclosed in the presentation how much the loan book in Wholesale Banking grew, especially in general lending, and half of that came back already.

Question: Anke Reingen - RBC Capital Markets, Research Division - Analyst : Just following up on Martina's question. On your $20 stress test, a little bit higher, is that on top of what you've already provisioned? Or is that gross of what you have already provisioned? And in that context, would it be possible when you talk about the 2.4% Stage 3 ratio in oil and gas, what the coverage ratio is? And then secondly, just on net interest income. In the past, you've talked about a flattish outlook. Is that still achievable given the many moving parts? Or is it just too uncertain? Steven J. A. van Rijswijk - ING Groep N.V. - Chief Risk Officer, Member of the Executive Board & Member of Management Board Banking The $20 stress test, that is gross because in the end, you look at -- also at what you already provisioned in your Stage 2. The second question was focused on...

Question: Anke Reingen - RBC Capital Markets, Research Division - Analyst : That would be the -- I mean... Steven J. A. van Rijswijk - ING Groep N.V. - Chief Risk Officer, Member of the Executive Board & Member of Management Board Banking Oil coverage ratio, yes, yes, I see it. No, the coverage ratio, we do not disclose. But the 2.4% is for the oil and gas book as a whole. So again, I want to stress [that](corrected by the company after the call) the oil and gas book that is under attention, at least under my attention, is the directly exposed risk to oil and gas price, like we also discussed on one of the previous questions. The 2.4% pertains to the whole of oil and gas book, which is EUR 35 billion. We do not disclose coverage ratios. Ralph?

Question: Anke Reingen - RBC Capital Markets, Research Division - Analyst : But just to clarify, that's the gross number pre any provisions taken? Steven J. A. van Rijswijk - ING Groep N.V. - Chief Risk Officer, Member of the Executive Board & Member of Management Board Banking Yes.