ING Australia reports business boom as challenger bank takes business from rivals

ING Australia has paid its Dutch parent a large dividend after posting an 11 per cent profit bounce.

ING Australia has not been immune to the troubles sweeping the sector, with the local arm of the Dutch banking giant warning of an increase in customers seeking hardship arrangements amid a spike in borrowing costs.

This comes as ING revealed an 11 per cent bounce in profit after tax to $654m for 2023.

The profit boom comes after ING reported a $589m profit for 2022.

Unveiling its 2023 results on Monday, ING revealed the lift in profit amid a 17 per cent jump in its operating results to $978m.

ING Australia chief executive Melanie Evans said there were plans to further grow the local business, with the bank investing in customer service.

But Ms Evans said ING was seeing distress from some customers, noting “2023 has been a tough year”.

“Throughout the year, we saw a slight increase in the number of people requesting support through our hardship arrangements and continue to do all we can to help,” she said.

ING upped its gross loan loss provisions in its latest set of accounts, taking the buffer from $121m in 2022 to top out at $160m, amid concerns over bad borrowers.

Ms Evans said ING was continuing to invest in upgrading its core banking platforms, including digitising processes and modernising technology environments.

ING has plans to continue strengthening its position in Australia after recording solid profit. Picture: Paul Miller

This has seen ING bring online a new data platform and shift core technologies to the cloud.

The bank also revealed in its annual report it had concluded its enforceable undertaking with Austrac, after signing a deal with the regulator in November 2022 in a bid to avoid enforcement.

ING agreed to uplift its compliance with anti-money laundering rules and counter terrorism financing laws in response to the Austrac deal.

Ms Evans noted ING wrapped up its enforceable undertaking with Austrac “ahead of schedule” as the bank “continued to make investments in our ‘Know Your Customer’ (KYC) and Anti-Money Laundering (AML) initiatives and technology to ensure we’re well placed to combat the risks of serious and organised crime”.

ING, best known for its orange branding, said it had seen continued growth of customer numbers as savers piled into its accounts and borrowers tapped lines of credit to fund a home buying splurge.

ING reported a 3.9 per cent increase to its lending book, hitting $73.9bn.

This came after a $3.3bn lift in ING’s mortgage book, which surged at 1.3 times overall system growth as the bank outpaced its rivals.

The red hot competition in the mortgage market has seen several bank heavyweights overawed as their market positions receded in 2023.

The Dutch bank, which launched in Australia in 1999, said savings also increased in the period, up 3.7 per cent to $50.4bn.

ING reported a 42.1 per cent cost to income ratio.

The bank paid its Dutch parent, ING Bank N.V a $654m dividend.

Originally published as ING Australia reports business boom as challenger bank takes business from rivals