Commercial momentum continued in the second quarter of 2018 , being characterized by strong lending growth for ING Bank Romania, attracting more customers and volumes across all business lines while maintaining the bank’s acceptance criteria.
The number of active clients increased by more than 155,000 in last 12 months, adding up to more than 1,2 million. Number of salary customers increased by more than 145,000, reflecting a +23% evolution, outpacing the active customer base increase of +15% yoy.
Bank’s lending book boosts to RON 23.1 billion at the end of June 2018, a 16% growth over the last 12 months, reaching a market share of 9.4%, a +0.8 p.p. increase since June 2017. The customer lending distribution remains stable between corporate (43%) and retail clients (57%). SME lending increased with 26% yoy, while the new lending production for individuals increased by 10% yoy.
The bank’s market share reached 8.9% on customer funds due to organic growth of corporate and individuals portfolio. Net inflows from customer in last 12 months of RON 6.0 billion which lead to a customer funds volume of RON 29.3 billion, 26% higher than in June 2017.
The strong business growth led to an increased Profit before Tax of RON 389 million, up RON 86 million on the same period last year, benefiting from income growth of RON 177 million and RON 2 million lower risk cost, which more than compensated the RON 93 million increase in expenses. Underlying net result at RON 345 million.
Total income is up by 25% yoy, to RON 875 million, with a balanced growth in both interest, benefiting from favorable market rates environment, and non-interest income, as result of higher volumes and transactions.
Operational expenses rose to RON 445 million, an increase of 26% against same period last year, determined by non-recurring costs with our new head-office, changes in the operational model announced at the start of the year, stepping up the investments in IT developments to continuously improve the customer experience and service and to support the business growth, regulatory and staff costs.
Risk costs remain well under control at RON 41 million, reflecting a decrease of 5% versus same period last year. ING’s prudent risk policies maintained over the years resulted in a NPL ratio well below market average, reaching 2.8%, down 0.6 pp versus 1H 2017.
“ING Romania continues to strengthen its position on the market increasing its market share through a constant organic growth. We are committed to keep a responsible and sustainable loan policy in the future for all business lines in order to maintain the low NPL rate, a balanced risk profile and a responsible support for the economic development in Romania.
The high pace of customer growth, especially among salary clients, is a confirmation that clients appreciate our services and the differentiating experience ING brings for financial services. Our aim is to empower our clients to stay a step ahead in their personal and professional objectives with simple, fast and safe services,” stated Michal Szczurek, CEO ING Bank Romania.
Less is more: Mobile payments and automatized verification for credit lines
In the past months ING has launched two new services, one for small companies and the other one for individuals.
ING paves the way for a new style of verifying a small company, with the instant credit line ING SRLeu. For the first time, clients no longer have provide the entire documentation, as ING makes automatized cross checking in data bases from ANAF, Risk Credit Central, Payment Incident Central and the Credit Bereau (for associates), but also other sets of verifications made instantly in any ING Office. The product is currently available for businesses with turnover between RON 100,000 and 9 million, registered as SRLs in Romania, whether they are ING clients or not.
Retail clients have now the possibility to pay using their phone using the ING Pay service. It can be easily activated directly from the Home’Bank application after the application is updated. Once the service is activated, a free of charge virtual card is issued instantly and all the client needs to do is tap their phone, with the screen turned on, to the POS. Launch of ING Pay, the service that allows payments with mobile phone, confirms our focus on new and accessible payment solutions to contribute to a cashless society. Together with this launch, ING also announced free of charge push notification services for all its clients.
The ING Home’Bank mobile application usage is significantly increasing compared with the usage of the desktop version. Currently there are more than 646,000 active Home’Bank users, out of which 453,000 access it from their mobile device, logging in on an average of 15 times per month. The frequency of desktop logins is half of that, confirming our clients’ need for flexibility and mobility in their day-to-day interaction with baking services.
The last months also brought changes in the management team. After 4 successful years with us, Ronald Oort was appointed chief risk officer (CRO) of ING in Spain and Thomas Bernert took over the CRO position in ING Bank Romania. Serge Offers was appointed as the chief financial officer (CFO) of ING Bank Romania, succeeding Sven Foos, who now heads up the SME segment in Germany.