NN Group reports solid 2Q14 results

Robust capital position further strengthened; strong sales growth

  • Successful IPO of NN Group, and subordinated debt issuances of EUR 2 billion in total
  • Operating result ongoing business of EUR 257 million, down 6.2% from 2Q13 on lower operating income at Netherlands Life, partly compensated by a reduction of holding expenses and funding costs; year-to-date operating result ongoing business is up 22.4%
  • Net result improved significantly to EUR 252 million from EUR 39 million in 2Q13, driven by positive hedge results at Japan Closed Block VA and higher revaluations
  • Capital position further strengthened; IGD ratio at 272% and holding company cash capital increased to EUR 1,156 million
  • Cost reductions drive total administrative expenses down; on track to achieve EUR 200 million expense reduction target by 2016
  • Strong commercial performance reflected in year-on-year sales growth in Japan Life and Insurance Europe, as well as higher pension contract renewals in Netherlands Life
  • Assets under management at Investment Management EUR 177 billion, up 5.4% compared with the end of 1Q14, driven by market performance and net inflows

Statement of Lard Friese, CEO

“Today we announce our first set of results after the successful listing of our company. The IPO of NN Group on 2 July was a major milestone, and represents the final step in our journey to become a standalone company. The success of our IPO reflects investor appetite for our business, a committed management team and an attractive investment proposition with a focus on capital generation and earnings improvement. NN Group delivered a solid performance and will continue to focus on delivering its strategic objectives.

Our cash capital position at the holding company substantially improved over the quarter due to dividend received from operating entities and a pre-IPO capital injection. In addition, the successful issuance of EUR 2 billion of subordinated debt in April and July, together with strong capital generation in the first half of the year, mark important steps in further strengthening our robust capital position.

Strong new sales growth was driven by Japan Life, Insurance Europe and higher pension contract renewals in Netherlands Life. Our continued client focus is increasingly being recognised. Nationale-Nederlanden has received the ‘Keurmerk Klantgericht Verzekeren’, a quality mark for customer focused insurance in the Netherlands.

At the same time, we have reduced expenses. We have made encouraging progress on the cost reduction programme in the Netherlands as so far this year we have realised EUR 75 million savings of our 2016 EUR 200 million expense reduction target. We are well positioned to achieve our strategic and operational objectives.”

NN Group Profile

NN Group is an insurance and investment management company with a strong, predominantly European presence in more than 20 countries. With around 12,000 employees the group offers retirement services, insurance, investments and banking to more than 15 million customers. NN Group includes Nationale-Nederlanden, ING Insurance Europe, ING Investment Management and ING Life Japan, and is listed on Euronext Amsterdam (ticker: NN).

Financial calendar 2014

Publication 3Q2014 results: Wednesday, 5 November 2014 (this date is provisional).

Press conference and webcast

A press conference will be held at 9.30am CET on Wednesday 6 August 2014 at NN Group’s head office, Amstelveenseweg 500, Amsterdam. The press conference will also be webcasted live. You can join in listen-only mode on + 31 20 531 5863 or watch the webcast on www.nn-group.com.

Investor conference call and webcast

Lard Friese and Delfin Rueda will host an analyst and investor conference call to discuss the 2Q14 results on 6 August 2014 at 12:00p.m. CET. Members of the investment community can join the conference call at+31 20 531 5865 (NL), +44 203 365 3210 (UK) or +1 866 349 6093(US) and via live audio webcast at www.nn-group.com.

Additional information

The following documents are available on www.nn-group.com:

(download the full press release)

NN Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS-EU”).

In preparing the financial information in this document, the same accounting principles are applied as in the NN Group N.V. condensed consolidated interim financial information for the period ended 30 June 2014. All figures in this document are unaudited. Small differences are possible in the tables due to rounding.

Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in NN Group’s core markets, (2) changes in performance of financial markets ,including developing markets, (3) consequences of a potential (partial) break-up of the euro, (4) the implementation of the EC Restructuring Plan, (5) changes in the availability of, and costs associated with, sources of liquidity as well as conditions in the credit markets generally, (6) the frequency and severity of insured loss events, (7) changes affecting mortality and morbidity levels and trends, (8) changes affecting persistency levels, (9) changes affecting interest rate levels, (10) changes affecting currency exchange rates, (11) changes in investor, customer and policyholder behaviour, (12) changes in general competitive factors, (13) changes in laws and regulations, (14) changes in the policies of governments and/or regulatory authorities, (15) conclusions with regard to accounting assumptions and methodologies, (16) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, (17) changes in credit and financial strength ratings, (18) NN Group’s ability to achieve projected operational synergies and (19) the other risks and uncertainties detailed in the Risk Factors section contained in the most recent annual report of ING Groep N.V.

Any forward-looking statements made by or on behalf of NN Group speak only as of the date they are made, and, NN Group assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.

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