From strength to strength
Dutch lender ING's Asia operation expects robust economic growth and increasing cross-border investments in its region, and hopes to maintain its strong annual revenue growth in the medium term.
Vaughn Richtor, chief executive of ING's banking in Asia, said the lender had achieved an annual revenue growth of 20 per cent to 25 per cent over the past few years in the 13 markets in which it now operates, which include India, Hong Kong, the mainland, Japan, Thailand and Mongolia, among others. He expects his operation to achieve the same level of growth over the coming years.
'We have adopted a back-to-basics approach and it has worked well,' he said. 'ING now focuses on banking and we aimed to be a leading European retail and commercial bank with strong growth potential in Asia and other parts of the world.'
Richtor said ING's international network is a selling point to Asian clients since they can use the bank to invest in the European market. Likewise, European customers can also invest in Asia through the lender.
Asia commercial banking business revenue stood at Euro495 million (HK$5.47 billion) in 2010, representing 10 per cent of total commercial banking business globally.
Key growth areas include India, the mainland, Hong Kong, South Korea, the Philippines, Japan and Mongolia.
The lender now has about 1,000 commercial banking staff in Asia and another 1,000 in Australia, where Richtor said it remains focused on profitable growth and has no plans to lay off staff, as other lenders do.
'We believe in the strong-growth story in Asia and we plan to focus on organic growth in the region,' he said. 'We will hire the right talent to fulfil our growth plan in Asia and we expect the headcounts in Asia will match our growth accordingly.'
Analysts say the lender, part of the ING Group, now will need a good Asian growth story to regain the confidence of its investors. The group, one of the victims of the global financial crisis, had to sell its insurance business after a government rescue in 2008.
ING agreed to split its bank and insurance operations in return for European Commission approval for Euro10 billion of state aid it received in the financial crisis in 2008.
Richtor said the operational separation was done in January and the group has repaid Euro7 billion and the rest is expected to be fully repaid out of retained earnings to the Netherlands by May 2012.
The group planned to sell its US, as well as European and Asian insurance businesses through two separate initial public offerings. The bank will retain the ING brand as well as the lion logo.
'One of ING's core focuses in Asia is the commercial banking business. For example, trade and commodity finance and structured finance, with focus on specific sectors including infrastructure, natural resources as well as technology, media and telecommunications,' Richtor said.
A key growth area would be India, where ING has a 44 per cent strategic stake in ING Vysya Bank, which conducts universal banking throughout the country and recorded 32 per cent growth in net profit last year.
In Australia, ING operates a direct banking operation. It has no branch network and uses the internet and mobile phones to make mortgages or other loans and banking services. It recorded a profit of A$275.9 million (HK$2.25 billion) last year.
On the mainland, it has a wholly owned branch in Shanghai, a representative office in Beijing and a 13.68 per cent stake in Bank of Beijing.
When asked about plans to incorporate the lender locally on the mainland, Richtor said the bank was evaluating all of its options but right now would focus on its existing platform.
'The European Union is China's largest trade partner today, while China is the EU's second-largest trade partner after the US,' he said. 'In the last two decades, ING has been playing a key role in facilitating trade flows between Europe and Asia. We are very committed to China and Asia business as we can see strong opportunities in the region.'