On the day we meet he is announcing INGÆs entry into Formula One û as the lead sponsor of the Renault team. He believes this will help to promote INGÆs brand globally û and also hopes it will raise the firmÆs profile in Asia. The Dutch asset management, insurance and banking conglomerate views Asia as a key engine in its growth plans. Here Tilmant discusses the region and his æracing visionÆ.
How important is the Asian business for INGÆs global P&L?
It is around 10% of our P&L, but it has to go higher. We have high targets. Our Asian business is growing by about 25% per year.
There are many people in Asia who perhaps do not understand the scale of ING. Could you perhaps convey it in a few numbers?
Our market capitalisation is Ç75 billion, our balance sheet is Ç1.4 trillion, and we have 120,000 people in 50 countries and 60 million clients; and we are the largest online bank worldwide.
Do you view Asia as an engine of growth for ING?
It is. Since I became chairman, I have said we have three growth engines: retirement services, direct banking, and Asia. Asia offers so much potential, as its population is growing older and the appetite for retirement services is growing fast. All the products we are now building around life insurance are not for the people who are afraid to die early, but to live too long. It is all about saving, and this is where Asia is very important. We are spread across Asia, and are very happy with our development in the region.
Why did you decide to de-emphasise investment banking in Asia?
First of all, we have changed our profile and business mix by concentrating on what we thought ING could do well and not trying to compete with the worldwide global investment banks. To some extent, we are a global retail institution, and on the wholesale banking side, we decided to choose areas where we could develop better. We are concentrating on areas such as specialised finance, project finance, leveraged finance, financial markets, bond issues and M&A. The image in Asia of ING Barings, was mostly an equity story. And we believed we could not compete in the equity world against firms such as Goldman Sachs and Merrill Lynch. So we decided to go back to our core businesses; and since then we have been much more stable, profitable and seen higher growth. The thing is to build a business on which we can deliver results, rather than pursue a dream to which we were not suited.
What would you describe your China strategy as being?
In China we have a very strong strategy because we are convinced that China will be one of the worldÆs leading countries. We have to be present in China, to secure our future. We feel like China is a place where you have to be prepared to evolve at the speed of the environment, and this is moving very fast. So we have a presence in every ING business in China û which means insurance, banking, asset management and real estate.
On the insurance side, we have acquired a large presence in the life insurance business. In banking, we have a stake in Bank of Beijing, and we are very happy with this investment. In asset management we have a very attractive joint venture û it is one of the largest and strongest asset management JVs in China. We are also active in real estate, which is a booming market in China.
In India you bought a stake in Vysya Bank. How has that performed and how does it fit into INGÆs overall India strategy?
Our approach to India is similar to that in China. We bought a large participation in Vysya Bank, which we bought progressively over the years. We decided last year to transform it into a modern retail bank, and have reinforced the management team. We are the world leader in direct banking û and we asked one of those who developed direct banking in Australia, to move to India, to develop it at Vysya Bank.
We also have an insurance company in India, which we are trying to grow quickly, plus an asset management business. So, as with China, a multi-facet approach.
Can you discuss your acquisition of ABN AMROÆs asset management business in Taiwan?
In Taiwan we are now the leading foreign asset manager in the country. We wanted to acquire critical mass in a market where we thought there was enormous potential. This acquisition made this possible.
Is your main focus in Korea on the insurance side?
In Korea we do have a stake in Kookmin Bank, and that has proven a very good investment. But our core ING business in Korea is insurance and it has proven a very successful business. We have good client reach there, and are distributing through agents. However, we are also developing television and internet distribution, which is quite exciting.
Where has ING focused in Australia?
ING Direct, our direct banking business has been extremely strong. We are the clear leader here, and our name is well known. In fact, we will be the new sponsor of the Australian Grand Prix in Melbourne. And apart from attracting deposits, we have also developed our mortgage business nicely in Australia, in spite of it being a very competitive market. We also have a major real estate business in Australia, which forms part of our global business. We develop properties, sell them to third parties and manage them û essentially we do this by creating real estate funds.
Is that real estate business also doing well for ING in the rest of Asia?
It is, but starting from a low base. It is clear that the potential for real estate in Asia is fantastic. The prices of real estate in Asia have already gone up quite a lot. The price of real estate has grown quite a lot everywhere. The reason is that property has been seen as a quality alternative asset class, and you have seen insurance companies and pension funds worldwide increasing the amount of real estate on their books. This is an ongoing trend and brings a fuel of investment to the sector. Those funds donÆt seem to have reached their desired allocations; and until they do they will continue to fuel global property markets.
The other trend is that companies that used to invest only locally, are now investing globally. We see big demand from North American funds wanting to buy property in Europe and Asia, for example; and Australian funds wanting to buy in North America.
We are ideally placed to see this, as this is a business that ING has viewed as fundamental for a long time. We are one of the biggest players in the property asset management business û I could say without immodesty that we are definitely in the top five globally.
Private banking is another area that financial institutions are chasing aggressively in Asia. What do you see as INGÆs point of differentiation from say, the big Swiss houses?
Our brand, our size, our financial strength are key. But in private banking the other important thing is that we have the ability to manage good teams of people without having a huge infrastructure. We are attracting a lot of good people on the private banking side, who are attracted by the way we manage the business and feel comfortable in the environment we offer. And on the product side we have strengths, such as our expertise in offering advice on emerging market bonds.
What is the relevance of INGÆs sponsorship of the Renault Formula One team, and what does it mean for Asia?
A year ago when we looked at our brand and our customer reach we decided it would be necessary for us to align our brand awareness with our customer reach. So we did a survey and looked at all sorts of platforms, and it became clear that Formula One was the best global platform to reach û in one shot û a billion people. We were operating in 15 of the 17 countries where races take place. In Asia this included China, Japan, Malaysia and Australia; plus it radiates around the whole region û for example, there are a lot of Indian fans of Formula One.