Wednesday,28 February 2024

ING to expand wholesale banking operations in APAC

5 min read

Interviewed By Foo Boon Ping

The bank will expand its worldwide wholesale banking business through its Asia Pacific network, concentrating on industry knowledge, sustainability, and innovation

 ING Bank, based in the Netherlands, has set its sights on Asia Pacific (APAC) countries to boost growth in global wholesale banking. According to Anju Abrol, CEO and head of wholesale banking for APAC at ING, the APAC region’s impressive growth trajectory stands out, as numerous nations within the region are experiencing solid economic growth, which creates prospects for ING.

“Asia Pacific is an important market on two counts,” Abrol explained. “First, its growth trajectory; the gross domestic products [GDP] of several countries are growing quite robustly. Second, the Asia Pacific market’s sheer size and scale.”

This region is home to 65% of the world’s population and contributes 35% of global GDP. ING hopes to blend into this vast environment. The bank’s global network of 40 countries, including 11 in APAC, will serve as the basis for delivering its portfolio of financial offerings.

Abrol said: “We are aspirational about our growth in the APAC region as a meaningful contributor to the overall growth of the wholesale bank globally.” She went on to say that this vision exemplifies the bank’s goal of leveraging its strengths and skills to encourage growth and wealth creation.

Strategic markets should be prioritised

She explained ING’s strategy, with the power of its broad network serving as the first pillar. Australia, China, Hong Kong, Japan, Korea, Singapore, India, and Taiwan are among ING’s target markets.

In Australia, ING’s expanded and reinforced capabilities resulted in 20% business growth in 2022, with close to 30% growth expected in the first half of this year. China and Hong Kong account for one-third of ING’s APAC business and are expected to remain the region’s primary contributors. In November 2022, ING established a representative office in India.

ING has a long history of having a strong brand in the Philippines. Abrol added: “It provides us with a platform to enhance our offering to our clients, particularly in the advisory space.

“We’re in Taiwan, and we do a great job with our clients. Singapore, our hub market, is critical to us. Korea increased significantly last year, and we anticipate to expand our product offerings there as well.”

ING intends to use the power of its worldwide network to benefit and support its clients’ activities. Notable transactions included those with Vena Energy, First Street, and DBS Bank, for which ING served as joint bookrunner. The Goodman Group and Korea Ocean Business also completed long-term contracts.

The bank’s second pillar is strong industry experience, particularly in energy and transportation, which makes it a trustworthy financial partner. It also assists its clients in managing both sustainability issues and opportunities in their respective sectors.

Critical to implement strategies with precision

In difficult circumstances typified by rising inflation and interest rates, it is critical to implement strategies precisely. “Geopolitics has recently occupied the headlines, causing a shift in supply chains,” Abrol explained. ING’s approach is offering clients competent guidance and assisting them in navigating the intricacies of the financial world.

With a well-established framework, China has dominated supply chains. More countries may be able to build good supply chains, but this will require major government backing and ongoing momentum. To achieve successful supply chain creation, political and regulatory will are required.

According to Abrol, supply chain dynamics are changing as organisations diversify and de-risk their operations. ING assists clients in establishing businesses and manufacturing facilities in several countries, but a quick response is required. In the face of geopolitical uncertainty, the bank’s wide network and experience helps clients to optimisie their supply chains.

Ramping up to meet ISO 20022

Regulations and industry norms also make strategy execution difficult. ING is prepared for the ISO 20022 year-end deadline of 2025. Managing regulatory changes while promoting innovation and growth necessitates a careful balance of resources and expertise.

Abrol is one step ahead: “We do have the 2025 year-end deadline in mind, and in our institution, we are ramping up to meet that deadline.”

The bank’s commitment to innovation, sustainability, and strategy execution demonstrates its proactive approach to overcoming obstacles. Abrol observed: “Innovation is, I guess, part of ING’s DNA. We innovate in a variety of ways. We are either leading or participating.”

In February, ING announced the spin-off of Loan Optics to vc trade, the largest digital platform for private placement and promissory note loans. Loan Optics technology, developed by ING, enables syndicated loan market participants—banks, borrowers, attorneys, consultants, and agents—to collaborate on a single central platform to originate, organise, record, and negotiate digitally-native loans.

Loan Optic’s functionality will be integrated into vc trade’s platform, and ING will become a shareholder in vc trade as part of the acquisition. Its patented know-your-customer (KYC) platform optimises document procurement, capital transfer tax filing, and KYC data. The Komgo platform is used in trade finance to improve efficiency and secure trade finance businesses.

Artificial intelligence and robotics have an impact on efficiency, delivery, and time-to-market in legal work or operations. Abrol said: “We simply love the idea of being more and more digitalised internally and externally, client-facing.”

Supporting sustainability —just say no

The third pillar, sustainability, emerged as the strategic heart of ING. Abrol emphasised the bank’s pioneering role in the field of sustainability, evidenced by its execution of the first sustainable financing loan in 2017.

“Sustainability is ING’s global strategic priority,” she stated. “We’ve set a goal of reducing our own carbon emissions by 75% by 2025. And we encourage our employees to embrace the 2050 net zero goal, which we accomplish through our own internal Terra strategy.”

Steering their portfolios entails assisting their clients in making the transition to lower carbon emissions and saying no to things they will not do.

“We said we will not finance coal-fired power plants and will actually bring our portfolio to zero by 2025,” Abrol explained. “In addition, we just stated that we will not fund new upstream oil and gas installations.”

To define the Terra approach portfolio for 2050 aspirations, intermediate 2030 milestones are being set. ING has identified nine polluting industry sectors and is committed to assisting clients in reaching a common objective of net zero emissions by 2050. The Terra method focuses on climate routes for each industry, with the purpose of assisting clients in achieving this goal.

Other peer banks play an important role, with ING participating in numerous partnerships, such as being a founding signatory to the Poseidon Principles. Abrol explained: “We are leading the sustainable steel finance body, and more than a year ago, we were leading a similar body for aluminium financing and sustainability in that industry space.”

The bank’s emphasis on internal collaboration, competences, and communication has aided its growth trajectory. In the second quarter, ING recorded a net income of EUR 2.155 billion ($2.34 billion), boosted by high income growth and low risk costs.

ING CEO Steven van Rijswijk stated that the bank generated solid profitability in the second quarter amid geopolitical worries and inflation. He said: “The current interest rate environment has driven income growth in both retail and wholesale banking, with continued deposit inflows across our retail markets. Despite the fact that economies are cooling, we saw another quarter of lending growth and stronger fee income.”

Due to careful capital management and higher income over risk-weighted assets, wholesale banking had a solid quarter. The current interest-rate environment has helped daily banking and trade finance, with lending and global capital markets earning more fees. However, lending increase was countered by lower volumes in trade, commodity finance, and working capital solutions as a result of weaker commodity prices and economic activity. 


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