ING Australia faces profit crunch amid tech spend, hot competition

ING Australia has handed its parent bank only $479m in dividends, down $175m on its 2023 returns, in a sign of the hot competition and the cost of tech transformations.

ING (L-R) head of wholesale banking Andrew Hector and CEO Melanie Evans. Picture: Jane Dempster

ING Australia has seen its profits slip 19 per cent to $532m as the European challenger bank pours cash into a major tech transformation.

Publishing its 2024 results on Tuesday, ING Australia revealed its aggressive growth into the mortgage market as its business and wholesale banking lines retreated.

ING Australia chief executive Melanie Evans said the bank was showing the impact of its investments in transforming its core banking platform, alongside a rebuild of its retail banking app.

“In 2024, we made significant investments to position our business for scalable, sustainable growth while continuing to meet evolving customer expectations,” Ms Evans said.

“While this strategic investment impacted profit, this was in line with our forecast for the 2024 financial year and will allow us to accelerate growth in coming years.”

ING is one of a string of challengers to the dominance of Big 4 banks NAB, ANZ, CBA and Westpac.

It launched into the Australian market 25-years-ago.

Alongside the profit slump, down $122m from last year, ING cut the dividend to its Netherlands’ headquarters.

ING paid a $479m dividend, down from $654m in 2023.

Ms Evans, who was unavailable for interview, said the bank had seen strong retail savings and loan growth over the year.

ING reported its residential mortgage book grew 8 per cent over 2024, or tracking at 1.5 times the broader system growth for home lending, topping $63.4bn.

This came as ING’s deposits also lifted 6 per cent over the year to $53.2bn.

The major banks have called out the impact of competition in driving down the returns on home lending.

This has come alongside a race for deposits, with banks seeking to nail down cheaper funding costs.

ING’s net interest income was down slightly from $1.59bn to $1.54bn over the year.

“Our ongoing diversification efforts saw us lay the foundations to launch digital-led business products for small to medium sized businesses,” Ms Evans said.

ING has expanded its appetite for small business lending, allowing operators to borrow up to 80 per cent of a property value.

But, ING’s business banking arm saw its deposits tumble over the period, while loans went backwards, with red hot competition in commercial lending weighing on the bank.

Business banking loans were down $283m over the year to $3.37bn.

ING continued to grow its consumer lending operation, up 23 per cent over the year, hitting $543m.

The bank continued to grow headcount, adding 93 staff over the year, taking it to a total of 2023 employees, alongside 533 contractors.

But, ING has grown its headcount over the year, adding 93 staff, taking the bank to a total of 2023 employees, alongside 533 contractors.

Originally published as ING Australia faces profit crunch amid tech spend, hot competition