Deutsche ING is expanding its workforce by 14%

By Christian Kirchner and Heinz-Roger Dohms

How’s it going at Germany’s largest direct bank, ING Diba (we correct: ING Germany)? We already presented the most important figures for the third quarter to you yesterday morning. Here is a little analysis:

Diagnosis 1: The ING is still adding staff

Oops, would you have thought that? At ING Germany, the number of full-time positions has grown by 14% within twelve months, both in the retail sector and in corporate banking (which ING calls “wholesale banking”). This is astonishing in an environment in which (see also the latest Helaba figures on the Frankfurt banking job market) the headcount is falling or will be falling on the right and left.

Now you have to add: The Dutch ING (as I said: these and the following figures refer to Germany, but come from the mother’s reporting) determines the number of positions a bit differently than the local subsidiary does in its own balance sheets. The Austrian business is also included. However: a “plus” is also a “plus” in Amsterdam …

… and what is particularly noticeable: In “Wholesale Banking” growth came to a standstill in Q3, whereas in the retail business (+191 jobs) things continued suddenly. So where do the new jobs come from?

1. At the subsidiary Lendico, a digital broker of business customer loans, which is added to the retail sector in terms of figures (more about Lendico job structure here)
2. At Interhyp, which is also part of ING’s Germany business (more on Interhyp growth here)
3. This and that. ING Diba is currently waving around at various nooks and crannies, for example in the account area

Diagnosis 2: The corporate customer division is on the brakes …

We have told the story of the long, exorbitant growth of the wholesale banking division on various occasions (for example here). Between the beginning of 2017 and the beginning of 2019 alone, the volume of loans granted rose by more than 50%.

But now the following is not true: The peak of the volume was apparently already reached in Q2 / 2019. At the time it was EUR 35.9 billion. Since? It’s ticking down. And that in a growing market, mind you, because across all banks across Germany the volume is increasing by around 4% to 5% per year.

ING is therefore on the brakes in corporate banking, similar to (see our lightning analysis from this morning) Commerzbank. The more Corona, the more selective the lending, it seems. When asked, the German ING said that it had already announced in the spring that it would concentrate on business with an acceptable risk-return profile. “In addition, in connection with the global corona pandemic, the worldwide willingness to invest and, accordingly, the demand for credit has decreased,” said a spokesman. Since various global competence centers for corporate customer business are located in Frankfurt, this reluctance to invest globally is in turn reflected in the volumes.

Diagnosis 3: … and now also delivers less result

How much pre-tax profit did the wholesale banking division generate? In Q3 it was 106 million euros. That is still impressive, especially when measured against the manageable headcount of 429 full-time positions. But let’s put it into perspective: In the first quarter of 2019 it was already 141 million euros or 41% of gross profit in Germany. The signs here are apparently no longer pointing to growth (by the way, the miserable result in Q2 2020 is due to the unfortunate Wirecard loan).

Is it all a bit defensive? Might be. On the other hand: As the figures presented yesterday also show, the German ING practically did not have to set up any risk provisions in the third quarter. Maybe a lot was done right after all.

Diagnosis 4: ING doesn’t know (anymore) what to do with the money either

A little look back:

Any questions?

Customers simply do not stop wearing their insoles to ING Diba – but the ING Diba no longer knows (see the second diagnosis) what to do with them.

Diagnosis 5: Mei, what kind of luxury problems are these …

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