On paper, 2010 was a poor year for ING Direct. The group's home loan portfolio grew by just 2.6 per cent and its retail deposit book shrank by 1.7 per cent. Not many other banks performed as poorly on both the asset and liability sides of the business - even as customer numbers increased three per cent to 1.4 million.ING Direct's executive director of savings, Brett Morgan, said the performance had to be viewed through a wider lens. "Our household deposits grew very strongly in late 2009. It proved to be hot money and it ran off in early 2010."Our deposit growth in the second half of the year was in line with the market."Traditionally, ING Direct has relied for deposits on one hero product - Savings Maximiser, a high-yield, online, at-call account that has been a price leader in the field for a number of years.Morgan said the bank changed its strategy last year, aiming to build a more diversified and sustainable deposit base.The strategy worked well in business deposits, where the bank picked up an extra A$1.9 billion of deposits and grew the book by 62 per cent. The business deposit book, at $5.1 billion in December, is small compared with the retail deposit book, which stood at A$17.5 billion in December.On the retail side, the bank did some development work on its term deposit capability, increasing the number of terms on offer from five to 10 and adding a loyalty bonus for customers rolling over, and a "name your own maturity date" facility (which was launched this week).The plan was to shift the balance of retail deposits, so there was a better mix between Savings Maximiser and term deposits.Morgan said: "Term deposits make up 45 per cent of the household deposit pool. You can't keep growing if you are only in the variable space."ING Direct picked up new term deposit business, but Savings Maximiser inflows flattened. Morgan conceded that the execution was not as good as could have been hoped for. The bank's systems were not ready to support the new strategy in the early part of last year.ING Direct stopped offering an introductory rate on Savings Maximiser for several months last year, but Morgan said this did not affect inflows.On the mortgage side, the bank took a conservative view on risk and put the brakes on. As it turned out, mortgage sales slowed more than the bank had planned for.Morgan says the system issues on the savings side have been dealt with and the bank is back on track. In mortgages, the bank is taking "a slightly more aggressive approach"."This bank has a low cost base and this has allowed it to offer good rates. This does not change. Last year we made some changes to the business mix and we are getting a better understanding of what attracts different customers."Yesterday, ING Direct denied an unsourced report in the Australian Financial Review that its Australian banking operation was on the market.