ING Bank Romania continues to show strong commercial performance in 3Q18, attracting more customers and volumes due to a diversified lending and savings proposition.
The number of active clients increased by 155,000 in the last 12 months, reaching 1.25 million. Number of customers with recurrent income increased by more than 126,000 reflecting a 19% increase, which outpaced the 14% growth of the active customer base.
Market share on lending increased by +0.9pp YoY, reaching 9.8% in 3Q18. The Bank’s lending book reached RON 24.6 billion in the third quarter of 2018, a 17% growth during the last 12 months. The customer lending distribution remains stable between corporate (43%) and individual clients (57%). SME lending increased by 23% YoY, supported by the launch of the new instant loan product in June. On the individuals side, the online personal loan launched last year and extended in the last quarter with the option of online refinancing has seen good feedback from our client base. Non-performing loans ratio continued to decrease to 3.0%, down from 3.2% last year, and remains well below market average.
The bank’s market share on customer funds reached 9.0% due to organic growth of both the individuals and corporate portfolio. Customers funds increased by RON 4.6 billion, or up 18%, in the last 12 months to RON 29.6 billion.
Profit before tax was RON 603 million, up by 31% as compared to the same period last year. Continued strong organic growth led to 28% higher income than last year, surpassing 1.35 billion RON in the first nine months, as a result of higher volumes and number of transactions. Operational costs were up 23% to RON 656 million influenced by the higher staff costs, new office building costs and investments in digitalization. Risk costs increased 48% YoY, due to portfolio growth and developments as well as regulatory related changes implied by IFRS9 implementation as of January 2018, totaling RON 96 million. Underlying net result was RON 529 million.
“Next year ING will celebrate its 25 year anniversary in Romania. During this period, we have organically grown our franchise to more than 1.25 million active clients and are ranking as the 6th national bank in terms of size. I want to thank our customers and employees for their trust and support, which made this achievement possible. I am proud that we have always been a frontrunner in providing easy, simple, and fair products that serve our clients’ needs and support the Romanian economy. After introducing Self’Bank units and the online platform Home’Bank, we are now the leading bank in mobile. The success of the recently launched products ING Pay and ING SRLeu support our digital strategy to further grow based on a differentiating customer experience,” said Michal Szczurek, CEO ING Bank Romania.
Exponential digital growth
As compared to three months ago, the number of log-ins increased by 12% and the number of transactions by 5%. When comparing the first nine months to the same period last year, the two figures grew by 64%, respectively 33%. ING clients continue to prefer mobile usage, having 83% of logins done through mobile, compared to desktop. Overall, ING Home’Bank reported 680,000 users active as of September, while almost 55% of these are using digital.
The preference in instant service and mobile usage is clearly seen in ING Pay rate of adoption. Launched in July this year, the service allowing you to pay with your phone, activated easily through two steps in ING Home’Bank, is already responsible for over 1 million transactions.
Also, after the instant online loan for individuals was launched last year, ING updated the product with the option of refinancing their loans online, in ING Home’Bank, as a complementary option for the original offer.
In 3Q18, ING also made a comeback on the local capital market, with a successful new bond issue placement organized together with BT Capital Partners and BRD for International Investment Bank.
After being first announced in February, ING Business, the omni-channel internet banking platform for Mid-Corporate Banking clients, is updated with new functionalities. ING Business now has a fully functioning tridimensional scope, allowing not only transactions, but self-service management and a direct and personalized communication channel. Features will gradually be made available to users in the following months.
ING clients want fast, easy, simple and safe products and the products launched in the past few months and the good customer response validates our strategy. This summer ING launched the instant loan addressed to small SMEs, ING SRLeu, making the full product offer available online, and only in three months the number of newly offered instant loans is now half of the gross new loan production.
The bank’s activity in this quarter was also highly influenced by the new business model implemented starting 1st of November. ING Bank Romania becomes the first local bank to operate without cashiers, keeping its territorial offices only for more complex products and consultancy made by its employees, and also for the Self’Bank area which is updated with more machines and services.