ING Australia well positioned for growth on back of record $311m profit

ING Australia (INGA) is well positioned for future growth after announcing a record after tax profit of $311 million for the period ended 30 September, 2007, on the back of strong sales and revenue growth.

The 28% increase in profit after tax was driven by net income growth of 16% against expense growth of 7%.

Speaking at an analysts’ briefing held in Sydney today, CEO Paul Bedbrook said ING Australia was performing strongly across all business units and was well positioned for sustained future growth. 

"INGA’s profit value of new business growth is above the average of our peers, and we expect this to continue in the immediate future."

Performance highlights of the year to September 30 included:

• Very strong  inflow into core funds management products, with Funds Under Management (FUM) growing 18% over the year driving funds management income growth of 13%
  
• Oasis Asset Management, INGA’s 73%-owned badged platform subsidiary, performed strongly, with 41% growth in FUM since it was acquired in May, 2006
  
• Total in-force premium grew by 26% over the past 12 months; substantially ahead of the industry average. INGA grew its market share to 12.5% for in-force premiums in the 12 months to June, 2007, ranking it No. 3 in the industry
  
• Life Risk retails sales (ranked No. 2 in the industry) have largely been maintained at the much-increased levels achieved in 2006 due to the continued success of INGA’s OneCare product
  
• Risk income increased 21% driven by strong growth in premium income in term life and consumer credit
  
• During the year INGA’s Corporate Super product was ranked No.1 among employer super providers by Herron Partnership
  
• Aligned adviser numbers increased by 189 to 1,334 compared to 2006. INGA now has the third largest number of aligned advisers in Australia

Mr Bedbrook said all of INGA’s key business units – Personal Investments, Employer Superannuation, Life Risk and Direct Insurances - performed strongly in terms of sales and operational profit. 

"Personal Investments has performed well in a favourable environment, and our Life Risk business continues to be a stand out performer, with INGA being rated Australia’s top-performing group risk provider. Life Risk is growing market share and Personal Investments is holding share in a very competitive environment.

"INGA is one of the most trusted names in super, and our Corporate Super and Integra Super products are well placed in the medium large and SME segments. We have recently launched new product features and member services in these segments.

"The Direct Insurances business is continuing its high growth, high profit momentum, with increasing sales through ANZ channels and the open market, particularly via online sales of life and general insurance products. In future, we will increasingly leverage the ING brand as part of our growth strategy, including partnerships with ING Direct."

Looking ahead, Mr Bedbrook said INGA was responding to the key challenges of margin squeeze in investment and the need for greater efficiencies by launching ‘Project Refresh’, a 2-year transformation programme designed to reduce costs, reduce complexity in systems and processes, and increase speed to market.

"A key objective is to reduce our current cost to income from 53% to 43% by 2010."

Mr Bedbrook added: "During 2007 ING Australia has consolidated its position as one of Australia’s major wealth managers and insurers. We maintained our strong growth momentum, upgraded our product offerings, improved operational effectiveness and continued to develop a strong performance and service culture.  We have also begun a major transformation programme to address future competitive and cost challenges.

"Half-way through the 10-year joint venture between ING and ANZ, ING Australia continues to have one of the strongest brands in the market for wealth management and protection. This is a wonderful business in an industry underpinned by strong superannuation flows, but where customers are benefiting from fierce competition and even greater efficiency."