ING Luxembourg has announced that it has held its own during the first half of the year thanks to solid growth in sales, despite a very difficult economic environment for the banking industry (low or negative rates, weak economic growth, etc.).
Despite this context, there was an increase in client balances (+14%) and a growth in revenue (+1.6%), while net income was down at €48 million (-10% compared to the first half of 2015). This was primarily due to new regulatory costs of €4.1 million in the first half of 2016, of which there were none in the first half of 2015.
While securities deposits increased (+32%), cash deposits were down (-6%), although loan activity grew strongly (+16%), moving the ING Luxembourg loan to deposit ratio from 39% to 48%.
Evolution for each business line Despite the drop in the interest margin, Retail Banking, which combines the bank’s retail businesses, saw its revenue remain at a level similar to that of the previous year, thanks primarily to an increase in loan activity. However, profits declined, essentially as a result of the accounting of all 2016 regulatory costs for the creation of the deposit guarantee fund.
Private Banking profit was down, notably due to the Brexit outlook which weighed on the securities activity at the end of the semester, resulting in an overall decrease in transaction volumes.
Despite the difficult environment, Wholesale Banking recorded a slightly higher than expected profit in the first semester. Negative interest rates and their impact on margin were offset by good sales activity.
This good performance was tied to growth in all assets (deposits, loans and securities) and to a significant increase in payment transactions (+30%). The number of new account openings continued to increase satisfactorily (+4%).