Ingenico Group SA (NYSE:ING) Q2 2020 Earnings Conference Call - Preliminary Transcript

Aug 06, 2020 • 02:30 am ET


Ingenico Group SA (NYSE:ING) Q2 2020 Earnings Conference Call - Preliminary Transcript


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Good morning. This is Patricia Klosov Norton. Welcoming you to ING's Second Quarter 2020 Conference Call. Before handing this conference call over to Steven Van Rijswijk, Chief Executive Officer of ING Group. let me first say that today's comments may include forward-looking statements. Such as statements regarding future developments in our business, expectations for our future financial performance, and any statement not involving an historical fact. Actual results may differ materially from those projected in any forward-looking statements.

A discussion of factors that may cause actual results to differ from those in any forward-looking statements is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission, and our earnings press release as posted on our website today. Furthermore, nothing in today's comments constitutes an offer to sell or solicitation of an offer to buy any securities.

Good morning, Steven, over to you.

Steven Van Rijswijk

Thank you very much. Good morning, everyone, and welcome to our second quarter 2020 results call. I hope you are healthy and well. I'm happy to take you through today's presentation in my new role, CEO.

I'm joined by [Technical Issue] sorry, I'm joined by our CFO and our interim CRO, Tanate Phutrakul, as well as, Karst Jan Wolters, currently responsible for the day-to-day risk activities. At the end of the presentation, we will, as always, have time to take your questions. With COVID-19 affecting many, also, the second quarter was far from standards. We continue to support our customers, employees, and society during this time. At the same time, as countering financial and economic crime remains a priority, we continue our efforts to increase the effectiveness of our KYC activities. However, the current operating environment reinforces our belief that we are on the right strategic path with our digital model being a clear strength in continuing operations and uninterrupted service.

Pre-provision results proved resilient, as we keep focus on pricing discipline. We also saw some of the negative valuation adjustments from last quarter reversing as financial markets somewhat normalized again. Combined with cost control, this largely countered the margin pressure on customer deposits and goodwill impairments.

Over to risk costs. In the IFRS 9, we took substantial collective provisioning in Stage 1 and Stage 2 to reflect worsened macroeconomic indicators. When these remain unchanged, we believe that we have already taken the majority of provisioning for this year. And for the second half of 2020, we expect the risk costs to be below the level recorded in the first half year.

The CET ratio improved from 14% to 15%. This ratio was supported by lower RWA due to several management actions and CRR amendments. Regularory -- regulatory capital also increased. I'll come back to this later in the presentation. We are confident that we are well-positioned to face headwinds with a strong capital position, a strong funding base, and a low Stage 3 ratio.

Also this quarter, we provided support to our employees, customers, and