ING Australia CEO Melanie Evans
ING Australia regained momentum in the home loan market last year but is struggling to make headway with its push into the business banking market.
The bank released its 2023 annual report this week, reporting an 11 per cent increase in net profit to A$654 million on the back of an 18 per cent increase in operating income to $1.7 billion.
Active customer numbers grew 3.9 per cent to 2.2 million and 1.1 million of those customers used ING as their primary bank – an increase of 5.7 per cent.
In 2022, ING grew its home loan portfolio by 2.1 per cent, compared with system growth of 6.5 per cent. In the second half of the year, as interest rates rose and competition for home lending intensified, ING’s book fell by more than 2 per cent.
It returned to growth in mortgages last year. Home loan balances grew by 6 per cent to $58.8 billion.
The loan impairment expense was $41 million, compared with a $3 million benefit in 2022.
Wholesale banking loans grew by 2.9 per cent to $9.9 billion and consumer loans grew by 19 per cent to $442 million.
ING Australia chief executive Melanie Evans said the growth in consumer lending was the result of digital enhancements and credit policy changes.
But the business banking loan portfolio fell 13.5 per cent to $3.7 billion. The bank has been pursuing a diversification strategy in recent years but it is not making headway in this key segment. It is the second year in a row that its business loan portfolio has run off, declining by 16.8 per cent since 2021.
Deposits grew by 3.7 per cent to $50.4 billion.
Evans said the bank was working through a core banking upgrade and shifting core technologies to public cloud.
ING completed an enforceable undertaking, accepted by AUSTRAC, to improve its compliance with Australia’s Anti-Money Laundering and Counter-Terrorism Financing laws. The anti-money laundering watchdog reported in November 2022 that ING was not fully compliant with the rules of the AML/CTF Act and needed to take action to avoid contravening the Act in future.