Feb 16, 2015
Executives
Ralph Hamers - CEO Patrick Flynn - Executive Board Wilfred Nagel - Executive Board
Analysts
Anton Kryachok - UBS Andrew Coombs - Citi David Lock - Deutsche Bank Ashik Musaddi - JPMorgan Martin Leitgeb - Goldman Sachs Omar Fall - Jefferies Guillaume Tiberghien - Exane Kiri Vijayarajah - Barclays JP Lambert - KBW Benoit Petrarque - Kepler Steven Haywood - HSBC Max Le Gouvello - Credit Suisse Tarik El Mejjad - Bank of America Merrill Lynch Matthew Clark - Nomura Geoffroy de Penagos - BNP Paribas
Operator
Good morning. This is Kirstin, welcoming you to ING's Q4 2014 Conference Call.
Before handing this conference call over to Ralph Hamers, 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 a 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 statement 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 a solicitation of an offer to buy any securities.
Good morning, Ralph. Over to you.
Ralph Hamers
Thank you very much. We welcome everyone to ING's Fourth Quarter 2014 Results Conference Call.
I will take you through today's presentation and with me are Patrick Flynn and Wilfred Nagel from the Executive Board for the Q&A session. If we turn to page 2 of the presentation the key points.
2014 was an important year as we know on the restructuring side but it was also a very successful year. We made significant progress on the restructuring.
The Dutch state fully repaid ahead of schedule and then listed successfully. The Voya deconsolidation and further fell down to 19%.
And on the Think Forward strategy that we launched in 2014 and we embedded throughout the organization we see already the success in the growth in the number of customers. We have welcomed more than 1 million individual customers and 0.5 million of primary customers.
And this all transferred into -- was all transferred into strong full year results reflecting higher interest results, strict expense controls and lower risk costs. The fourth quarter itself was 783 million and the result before tax, that was impacted by negative CVA/DVA redundancy provisions and the Dutch bank tax and we will elaborate on that.
And then I think we are all delighted that we can announce that we are reinstating dividend payments on ordinary shares with a proposed cash dividend of EUR0.12 a share which translates in to a payout ratio of around 40% of the fourth quarter group net profit. That said those are the key points of today’s presentation.
Turning to page 3 the market results of '14. You were there when we launched the Think Forward strategy with one clear purpose empowering people to stay a step ahead in life and in business.
And the core of our strategy was to create and is still to create a differentiating customer experience it's really all about the customer. Now following the launch of Think Forward strategy we have introduced a steady stream of improvement in 2014 most recent being the biometrics technology that we're using in Belgium through which people can actually access their mobile app using their fingerprints.
Thus we have introduced many more of these new technology driven customer experience improvements. And on the back of that the constant focus on the improvement of the customer experience we have welcomed more than 1 million new customers and more importantly as well 0.5 million of primary bank relationships with a particular strong growth in the [indiscernible] and growth countries and putting in line with our strategy.
Now that translated then again into strong commercial growth both on the deposit side as well as on the lending side. Turn to page 4, the P&L.
We posted strong results in 2014. The underlying net result in banking increased 8.5% from 2013 and is up at 3.4 billion now.
Excluding CVA/DVA which was negative throughout 2014 and excluding the redundancy provisions the underlying result actually increased 22.6% on a like for like basis. And that was on the back of continued volume growth, better margins and lower risk cost.
And that results if you would translate that result and of course pro forma return [FD] would be 11.3% in 2014. Now all of this as indicated was in the back of healthy income growth and higher NIM, flat cost throughout the last couple of years and lower risk costs.
And slide 5 shows you that we're basically moving into the right direction in all of our key metrics. Slide 6 shows you the expense developments that we promised to cost [flat] in 2014 and we did.
And that is despite higher regulatory cost, higher pension cost and investments in future growth. And actually if you really look through this we were able to keep cost flat while growing and assisting in the business because there is certain elements in the business that we are growing and investing as you know, so it's quite an accomplishment on this one.
The threshold cost will continue from a regulatory point of view. Regulatory cost in 2015 will increase further as the Dutch DTS and the contribution to the single resolution fund are expected to be implemented in 2015, so that’s why we further compression on our cost from that prospect.
In addition to that we will continue to selectively invest in the business for further growth given the fact that we can actually show that we’re growing and that we’re showing that we’re growing the business we feel comfortable and continuing to invest. However, we also see on the other side further efficiency gains in the areas of IT procurement so that we can reach our targeted costing per ratio of 50% to 53%, 2017.
Talking about IT investments and as you remember in November we announced further investments in the digitalization of our [this] business and that would result in further improvement of the customer experience, but also it would result in additional cost savings and we have also taken in the fourth quarter now additional measures in the gross Groep Bank and those are measures that are related to the ongoing transformation program of the commercial bank, that is so called CB TOM. We do foresee incremental savings and there as well and as a consequence of which we have announced a pretax provision of 39 million for the commercial bank in fourth quarter.
Now the incremental savings of all of these programs are now amounting to 300 million by 2018 and that’s on top of the 950 million that announced earlier. So to conclude we posted a strong result in 2014 and at the same time we will continue to invest in our strategic priorities for future revenue growth while maintaining a competitive cost base.
Let’s dive into the fourth quarter results, and I am turning to Page 9 now, so if you take a closer look at the fourth quarter result, we posted a solid fourth quarter result. First, it was -- the underlying pretax result was impacted couple of one-offs and volatile items such as the CVA/DVA, the redundancy provisions as already mentioned the bank tax as well as the deconsolidation of Vysya.
And if you would adjust these items the pretax results would actually be up 20.5% from the fourth quarter of 2013 and as driven by higher net interest income and lower risk cost. Then looking at the growth, net interest results rose 10.9% mainly due to higher results on customer lending that what’s page 10 shows you.
Since the end of last year, net lending of our core lending businesses increase by 18.5 billion and that’s a 3.8% driven by retail banking outside the Netherlands, the commercial bank in structured finance and transaction service in particular. So that’s basically this is a growth number that is consistent with this strategy as set out at the Investor Relations day that we had in March, so we do see the growth in the right area that we focused on where we think we can make a difference.
Then turning to Slide 11 and net interest result, we see a continued upward trend, increasing 8 basis points from the fourth quarter last year and stable at 153 basis points from the previous quarter despite lower net interest results in financial markets. And really we see the margins increasing we saw them increasing in comparison to the third quarter of 2014 in retail Benelux as well as structured finance.
And the average savings margin although declined slightly from the third quarter in 2014 and we’ll go into that now in the next slide. So in the fourth quarter, we did reduce our client savings rates in Netherlands, Belgium, France, Poland, and Romania but despite these reductions we saw a slight margin decrease because the reinvestment yields are decreasing a little bit faster than first move into savings rates down, but we continue to move these savings rates down and in first quarter we already announced further decrease in Spain, and we continue to review all our client rates in order to protect our NIM from this cycle of the balance sheet.
Then looking at the risk costs, risk costs are down from the fourth quarter 2013 but they’re up from third quarter in 2014 and that was basically because of the release that we had in the third quarter of 2014. So the results, the actually risk costs in fourth quarter were 400 million and we see the retail risk costs trending down now as well over all.
Then we go to Page 14, the NPL, the NPL ratio increased to 3% in the fourth quarter and that was mainly caused by higher NPL amounts and retail banking mortgage portfolios, and that’s following implementation of the EBA forbearance the definition which requires a forborne loan to remain and that will be all throughout a 12 month probation period that is actually moving the NPL ratio up specifically also on the Dutch mortgages. Now then the question is, is this itself a worrying development.
No it's an adjustment of definitions it was on page 4 or 15; we actually see that if we would look at the NPL ratio in Dutch mortgages in the third quarter we would be at the same percentage. So the impact of the forbearance definition on actual risk cost is very limited.
The risk costs were actually down in the Netherlands in comparison to last year, but also in comparison to the third quarter this year. In addition to that the 90 plus days arrears decreased to 1.4% from 1.5% in the third quarter of 2014 and that actually reflects the improvement of the Dutch economy and the housing market there.
So although the NPLs are going up because of the definition change, the underlying trend is actually positive -- slightly positive. And looking at the Dutch economy, we continue to see positive momentum in the Dutch economy as well as the housing market and we've seen home sales reach the highest level in the last six years.
House prices have continuously increased and house prices have actually moved up 5% since the third quarter of 2013 when they basically were reaching an all-time low. So that's actually a good development there as well, it shows confidence and we know that this is a prerequisite for further economic growth in the Dutch market itself.
So all of that led to a further improvement of our capital position. Page 17 ING Bank's pro-forma Core Tier 1 on a fully loaded basis now increased to 11.4% and that's principally due to retained earnings as well as higher revaluation reserves.
The group Core Tier 1 phased-in ratio increased to 13.5% from 13.2% in the third quarter of last year. That ratio is well in excess of the regulatory guidance of 10.5% for the group despite a partial reduction of the carrying value of the insurance stakes.
Now following the dividends of insurance stakes the group Core Tier 1ratio on a fully loaded basis will be 13.1% and that will be well in excess of the bank's ratio and the regulatory guidance. And taking a closer look at the results on group level page 18.
Strong capital position at bank and group level as well as the strong result in group level actually enabled us to start returning capital to our shareholders ahead of schedule. And therefore we're pleased that we can announce today the redemption of dividend payments with a 2014 dividend of EUR0.12 a share.
And as you can see from the slide the dividend was funded from the group rather than the bank although we have not yet fully paid down the group debt and that's a clear signal of our willingness to distribute capital from our insurance disposals back to our shareholders. Now going forward and it's our intention to pay a minimum of 40% of ING Group's annual net profit to the shareholders through dividend with effect from 2015.
And furthermore at the end of each financial year the Board will recommend whether to return additional capital to shareholders but that will be depending on financial, strategic and regulatory considerations at that time. Turning to slide 19.
Where are we in terms of our ambition 2017 that we plan to release and announced in March 2014? Actually we have already reached most of our goals but not all of them.
And sticking to some of these goals it's quite a challenge going forward and that's what we are managing. But if you just go through the list our capital position is strong with a Core Tier 1 ratio above 10%, our leverage ratio is around the 4% target based on IFRS.
As far as the cost income ratio is concerned we're making the right progress moving in the right direction. The cost income improved further if you compare it to 2013, but as I said there are some challenges ahead on regulatory cost and that we will have to offset.
But we remain committed to our 50% to 53% range as a target in 2017. The reported return on equity in 2014 was 9.9% up from 2013.
As I indicated early already if we would exclude CVA/DVA and the redundancy provisions for this year -- for this quarter return on equity pro-forma for the year would be 11.3% and that’s nicely within our target range. And finally if we come to the dividend payout -- that's what we have indicated also in March we will already start paying the dividend in 2014.
There will be a 40% dividend on the fourth quarter net profit of the group and as of 2015 we will pay a minimum 40% of annual net profit starting with interim dividend later this year. So to wrap up and I am sure you have a quite some question, what do you look at is from the restructuring perspective, whether you look at it from the commercial perspective utilizing development with the number of customers.
Already underlying development, if it comes to savings and lending growth, or what do you look at the results both in terms of P&L as well as capital position, 2014 has been a successful year and we’re very pleased that we can actually start paying dividends again after a six year of not having paid dividends. And with that, I would like to open the call for questions.
Operator
Thank you, sir. [Operator Instructions] Our first question comes from Anton Kryachok from UBS.
Please go ahead.
Anton Kryachok
Just two questions please, one on net interest margin, can you please comment on the sustainability of net interest margins that we saw. In Q4 financial markets was a negative drag on the Group margin this quarter.
And as that unwinds in Q1-Q2 would it be reasonable to expect even higher margins from this level or should we keep in mind various other factors that might keep pressure on net interest margin at the Group level? And the second question please on capital, in the slides you comment that your regulatory capital requirement might be around 10.5%.
This is slightly higher than the 10% number that we heard from the Dutch regulator, does it influence your own management core equity Tier 1 target of 11%? Is it 11.5% now?
Also, how should we think about excess capital that you will have over and above 11% or 11.5%? Would you look to distribute that as soon as the opportunity arise, or do you think you -- we might see a gradual buildup of capital requirements further down the road?
Thank you.
Ralph Hamers
Patrick will answer.
Patrick Flynn
On the NIM, as we try to guide on FM, it inherently volatile and we’re happy and pleased with the franchise and how it contribute in aggregate with the distribution between FM, NIM and trading income can be arbitrate -- let’s not manage specifically to contribute in each and every July [feat], prefer to look our NIM results, I think predicted from the guidance excluding FM, notwithstanding it is a solid contributor to earnings. So if we look at where we are in NIM, over the course of the year we’ve improved NIM by about 8 basis points to just over 150 within our guidance range.
It did increase in Q4 and total interest earnings were also improved also. This has come mainly from lending, it’s come mainly from what our strategy focused -- our strategically focus on structured finance and also we’re seeing good growth and margins from mortgages and other parts of the retail.
The lower rate environment and the dropping rates in the quarter has put further pressure on that company we try to contract, but it’s decreasing negative headwinds. Thus far we have been able with progressive rate cuts to whole margins on savings stable albeit slightly declined in the quarter.
And we still have more ammunition in the locker to offset the fall of rates going forward. On the assets side, we keep good discipline in terms of lending and as I said already that helped us in terms of margins with structured finance and mortgage in particular, but again as I mentioned on previous quarters, we’re seeing pressure in all the category short term lending products like trade finance and also general lending is under margin pressure.
So what is all mean net-net, I think what it says is that with the ability to curtail pressure on deposit margins, we think we can keep our net interest margin broadly at the level of where we are for full year and the 50 mark which is solidly within our targeted range for the next couple of quarters. Thereafter it’s a bit hard to call given the relative in certain environment at the moment.
Then onto capital ratios, the 10.5 is for the group level and that is right from review based in 2013 which was the last one when formally had a review. It reflects risk pertaining at that point which include some significant risks when you back in hindsight that we subsequently dealt with i.e.
the NN IPO which was not concluded that point. And that has subsequently been done so an add-on for that I think we would reasonably expect to be eliminated going forward, so I think we can manage that the piece that needs to the higher -- slightly higher group requirement above that of the bank which is unchanged going forward however it remains the same how the regulatory environment changes in the future?
So for now the bank target was to be about 10 as said previously, that’s got [altered] we are all on 11.4 slightly above where we guided to be and probably at the top end of the where we need to be and we're going to look very carefully at managing the bank capital ratio and consistent with previous continue guidance to be around 11.
Operator
Our next question comes from Andrew Coombs from Citi. Please go ahead.
Andrew Coombs
One question on just interpreting your commentary on your dividend policy, and the second question on loan growth. Firstly, if I look at slide 25, in your appendix to the presentation provided useful illustration of the capital of the Group pro-forma before divestment in insurance stakes; you talk about a EUR5.3 billion buffer relative to the Bank core Tier 1 ratio.
What I just wanted to clarify is given the commentary that you've made about recommending to return additional capital to shareholders at the end of each year, should we assume that that EUR5.3 billion buffer, is essentially likely to be returned to shareholders either if NM was to be spun off in that means or via means of a special dividend if you were to proceed with a sell-down going forward? That's my first question.
The second question is just with regards to loan growth, somewhat simpler question. But given the headwinds you have of mortgage pre-payments in the Netherlands; Russia de-risking; lower trade finance volumes, how feasible do you still think it is to grow the loan book by 4% in 2015?
Thank you.
Ralph Hamers
Patrick will take the first question on dividend policy and I'll take the second one.
Patrick Flynn
The 5.3 essentially reflects the surface value of an employer which is suitable with this launch before, made it possibly was likely a different performer, while it is the same number. As we've articulated in the bottom of the press release that you'll see we are willing to review structure capital at the end of the year with a view to seeing whether we return dividend more than the 40% and in taking out review we will look at our profits obviously we look at the regulatory environment we look at growth opportunities.
So we'll take a holistic view at the end of the year to see where conditions are supportive of listing our dividend payout ratio above 40% and potentially distributing some of the surface. I would also point out to you that the dividend we've just announced for the fourth quarter is from the group and it is pay our part of our surface.
But if you look to the left on the same slide, the 9.5 is coming from -- effectively from the group and therefore is a pay out of part of the surface so that’s done already.
Ralph Hamers
And then on the lending growth, clearly you know there are some areas where basically we see some headwind. Russia as we have indicated, we’ve indicated a bit of de-risking their mortgage pre-payment in the Netherlands although there are also more than the normal given the fact that we had the special situation with this tax holiday on gift in order to pre-pay mortgages and that’s the special situation of this falling away -- has fallen away as of the first year -- 1st January of this year.
Trade from them in the fourth quarter as particularly also because of the lower oil price but the volumes going through and same thing but the value to volume I suppose are going down. Now to come back to your real question we will be able to keep the 4% launch growth target.
If you look at where we are growing, we've grown our certified portfolio by around 7 billion in this year which is 16% over the year. We've grown legal banking international and in legal banking international specifically there are more mortgage lending we’ve been able to grow it by 3.5 billion which is 17% in 2014.
As exactly where we focus for our strategy. Now clearly as indicated we see some influence on Russia lower oil prices and we see a bit of lower growth in this quarter or may be next quarter.
But also if you look at the broader perspective and you look at where we can actually and we are actually getting the growth from which is through on the commercial bank through effective we work in 40 countries across the globe. So not overly dependent on the euro zone from that perspective.
But even within the euro zone we expect things to pick up with a weaker euro and lower interest so even there we expect further improvements and under retail banking side we have large activities in Poland and Turkey which are also growing faster than market. So it may not be smooth development of each quarter adding the gross that is exactly in line with the 4%.
But overall we feel that our franchise and our focus will deliver the 4% during the next year.
Operator
Our next question comes from David Lock from Deutsche Bank. Please go ahead.
David Lock
Good morning everyone. Two from me.
First one's on non-interest income. I think this was probably one of the areas of disappointment in the results.
Even if I add back the CVA charge, it was still a miss to where certainly I was and consensus was. I just wondered if you could call out any other one-off, or quantify any other one offs in that, and just help us in terms of how we should think about that line going forward, because it was clearly quite a weak quarter.
I just wonder if it's just a one-off and we should perhaps expect it to move more back towards the 800 level that we'd seen previously. The other question is just on costs.
Thank you for the update. Just wanted to confirm that the DGS and SRF costs are those coming in in line with what you're expecting?
And are those definitely within the 50% to 53% guidance going forward? I note that there was a DGS release in the quarter.
I find that odd that there was a release, given we know that costs should be going up in the coming years. If you could just comment on that, that would be helpful.
Thank you.
Patrick Flynn
We’ll both take these questions.
Wilfred Nagel
Yes other income in the -- so it did come down in the quarter and there was as I am afraid there was a number of sort of one-off type things that happen there. If you look at it -- the change you are talking about -- if I look at retail I see approximately 20% of the accrual is in retail and that's primarily or mainly attributable to what we call hedging effectiveness, where you have to mark to market the hedge swaps when they are ineffective from there like the rest of your non-hedging basis.
Most of this actually just increases the carrying values of the derivatives and you get it back later through time. The FM is seasonally low and in the fourth quarter and also we should point out this at bit [CDM] that was across 72 million, but that's seasonally low FM results.
And in other part well FM has been a third of it and then another part of it 40% comes from bank treasury where we had lower gain in the fourth quarter there was more in the third quarter and there was also some real-estate impairments as well some tidy-up impairments in there. So they are the main components of the other income line and they have brought in as you point out of other income.
And the second question was on DGS yes.
Patrick Flynn
Good question actually. What we're seeing on costs we have a commitment to flat costs and as Ralph pointed out we have delivered on the consistently over the past couple of years.
And going forward regulatory costs in total are likely to go up by next year to this year 2015 in the region of 240 million which is a combination of the single resolution mechanism about 120 Dutch CGF and I am afraid every other -- I have to be careful let's say every other area that is toping up as well on the [thesis] that we have had. So it's increasingly challenging to deliver flat cost with an ever increasing regulatory cost burden.
And I agree that's going to be around 650 and total regulatory costs in 2015. Ultimately we will swallow it but it becomes challenging to mitigate it perfectly every year because we're going to invest in the franchise or where have growth opportunities and we're not going to damage a franchisee that is growing simply to hold cost flat.
But yes within the 50-53 this if this is what the world is we will have to deliver it and we will have to absorb those costs if through a combination of the income or cost efficiency. And going back to DGS there are multiple components in this some of them will go back in time and through not further hard work and perseverance we managed to recover one, albeit I think our scope for covering the ones that are coming in is highly limited.
Operator
Thank you. Our next question comes from Ashik Musaddi from JPMorgan.
Please go ahead.
Ashik Musaddi
Thanks for the dividend that sure looks nice. Just a couple of questions.
One is basically on the deposit reduction. You mentioned that you have further cut the deposit rates in fourth quarter and in first quarter in Spain as well.
So how much of this is a lag effect that will come in next quarters coming result? You mentioned you're happy with the 150 basis points NIM for next couple of quarters.
What are we missing? Because this quarter you delivered 153 basis points without financial market benefit.
So what are we missing on that? That's the first question.
And second thing is on the risk cost. Can you give a bit more color on what's going on in Dutch retail and international retail, because it looks like the risk cost is coming down?
But how sharply can it come down in coming quarters? Can it really come down in like what happened in structured finance?
Or this is more of a gradual decline, as we have seen over past five quarters on risk cost in the retail side? Thank you.
Ralph Hamers
So the deposit rate reduction. So clearly from the savings side -- on the savings side we try to manage a stable margin there.
And we have roughly gaining portfolio there so the reinvestment yields they go down every year given the lower interest rates and we managed this on a month-by-month, quarter-by-quarter basis and trying to keep the margins flat, so you’re not missing too much from the perspective but it is all matter of timing when is the right time from a customer’s perspective and from a competition perspective to decrease rates and that’s what we take into account as well. So that’s basically the thing on the NIM upon the same side, and the risk cost I would like to give that one to Wilfred.
Wilfred Nagel
Yes, so what we see is that the international business is generally are at or around their long term average in terms of risk costs and outlier a little bit and it has been for the few quarters is the Netherland where the recovery is very sluggish and we continue to see higher risk cost. And because the other units are either around the long term average given the economic environment which is obviously not average and has a lot of uncertainty, we don’t really expect for that to come down by much at this point neither do we really expect in major drop in the Netherland.
We’re seeing as Ralph said in his presentation a gradual improvement also in the Dutch environment, but it would be slow and we know that the recovery on NPL and risk cost tends to lag that by several quarter that’s been the case for a while now. So all-in-all our outlook for the coming quarters is generally for risk cost to be at around the levels that we’re seeing currency.
Ashik Musaddi
Thank you, just follow-up on that, given that you have changed your NPL definition, because of the new forbearance concept, will that put any sort of pressure on the stock of provision that you have, or both are totally unrelated?
Wilfred Nagel
No, it’s won’t because the once where we had to change their classification where loan had been properly provisioned according to the actual risk profit and that hasn’t changed, so there is the direct link between the two.
Operator
Thank you. Our next question comes from Martin Leitgeb from Goldman Sachs.
Please go ahead.
Martin Leitgeb
Two questions from my side as well. One is a follow-up on your earlier comment on deposit pricing and here, the opportunity to cut rates further.
I'm just wondering what you think the opportunity is here in countries where you are mainly represented via online banks, for example, in Germany? Do you also see there the opportunity to cut rates more, because I think if I look at the latest flow data, this has been a significant source of increase at deposit funding for the Group?
I'm just wondering whether you can keep growing the deposit base there whilst at the same time, cutting rates, given that you're only an online bank there. And the second question is just in reference also to your loan growth comment made earlier.
If I recall right, I think your acquisition ban is going to end latest this November. I was just wondering, given the capital position where you are now and where you're progressing to, in the potential that there would be subdued growth on the back of a more lackluster performance of the European economy, would you also consider potential focused acquisitions or is that something, which is further out of perspective at this time?
Thank you.
Patrick Flynn
Thank you very much for the question on deposit pricing and just to go back, I think part of the success of our direct franchise is the fact that the client experience is much better than the client experience they have with our competitors. There is no country in which have a competitor deposit rate, we’re not allowed to have a competitor deposit rate in any of the country given the fact that we still have a pricing band.
So the fact that we still grow a number of customers and still grow in funds entrusted on the saving side is truly because of the strong brand and a truly differentiating client experience that actually gives us room to further decrease the rates if and when we think this can be done. And if you take a look at the same slide that in country like Germany and other courtiers we’re still paying around 80 basis points.
The underscore for further reduction without necessarily influencing growth on one side anything new customers coming in on the other side because we’re focusing on the experience. So they’re somewhat related but not fully related and we have shown that over the last couple of years because we can’t price competitors to be begin with.
On the growth side and as we have been able to show the growth this year starting the strategy, we know what’s the in the pipeline, we feel comfortable with the focus areas in which we’re growing. We’re actually investing in these areas also this area by hiring more people in these areas.
So we do comparable that the organic strategy -- the organic growth strategy that we launched a year that we can fulfill that one. And then from the perspective to conclude that we can’t get to the growth and we don’t see those singles, yes, that’s one.
Secondly, we also set the two way acquisition band and therefore from any perspective concluding on the running growth but also form a band perspective it’s a pretty mature to talk about any other strategy than the organic growth strategy.
Operator
Thank you. Our next question comes from Omar Fall from Jefferies.
Please go ahead.
Omar Fall
When you think of capital return to the Group, particularly when you think of returning the excess, so you mention above the 40% payout on odds, how do you think about revaluation reserves through shareholders' equity, please? They're now pretty sizeable, EUR3.6 billion, if I take debt and equity.
Would you be stripping out a chunk of that when you think of returnable capital? Second question on Bank of Beijing.
What is the point of maintaining the stake please? I think its worth about EUR2 billion.
It doesn't make much sense strategically, but would be a nice capital gain for you, especially with the prospect of an Asian macro slowdown. And then finally, just on your slide 25, you'll just have to excuse my math or being able to rebuild this, but how does the pay-down of the Group debt fit into this waterfall chart?
Would it essentially be once the holding company is collapsed in, it would come out -- that EUR1.5 billion would come out of the surplus or buffer? Thanks a lot.
Wilfred Nagel
I will take the question on Bank of Beijing and the other two questions will be taken by Patrick. So on Bank of Beijing as we have indicated when we launched the strategy, we treat all of our activities including a participation in Bank of Beijing in exactly the same way if we see scope to make a difference as we feel that the customer position and the market position is right if our activities generate the right investment and finance themselves in a balance way then we support those and all we have an improvement plan.
That’s what we've done for all business lines in every country and Bank of Beijing is not different from that we treated it like that as well. Now so we will continue to see how our corporation with Bank of Beijing develops and we have indicated already and we have signed a memo of understanding to develop internet banking in China which is something we are working on with them at this moment.
So on one side we have the stake on the other side we have a strategic operation agreement which is exactly going in the direction where we can actually had a lot of value. So from that perspective we feel comfortable with what we’re doing there.
With that I would like to give to Patrick.
Patrick Flynn
Yes I think what we're seeing is we're pointing the improvement in the Core Tier 1 ratio in the quarter and about two third of that is due to the appreciation of this rate and Bank of Beijing and the remainder, the 500 billion profit. Now the way we look at is more in our sensitivity of that core Tier 1 ratio to move to the interest rate.
So that’s relatively limited so we look at that more in sensitivity base in terms of absolute amount and the computation includes definitely of our reserves for us is it for everybody else. How does the pay down of group debt in -- pay down of group debt is a regulatory requirement which would be see we do have to deliver on, we will deliver on that happens by [purchase] of monetization.
The way we've presented the slide is slightly difference and in the past we don’t spike it out in part it isn’t actually fit into the competition regulatory capital. But it is a tough requirement so we haven’t forgotten it and as we monetize the surpluses in Voya and believe those monetize our spin, we will then pay it down the leverage of a total quantum available to shareholders if the somehow the value in Voya -- residual value of Voya at an end minus the bit of double leverage.
Operator
Our next question comes from Guillaume Tiberghien from Exane. Please go ahead.
Guillaume Tiberghien
I've got two questions, both of them on RWA. So the first question relates to regulatory RWA inflation.
Can you give us maybe a feel as to where we should expect RWA to be after regulation is changed or improved this year on the computation of RWA for operational risk, credit risk, etc.? The second question relates to Belgium.
There seems to have been a strong increase in RWA during the quarter, and I was wondering whether there was any change in models or whether it was only due to the volumes? Thank you.
Ralph Hamers
Wilfred will take both questions.
Wilfred Nagel
On regulatory developments obviously this is early days is a lot of discussion in Europe and there has been for the past two years about communization of risk wage and there is definitely going to be development there. But we can't quite see where that is going to land I think we have in the past provided you a bit of a feel for it the sensitivities that we have regarding a floor in mortgages we for example look at the Dutch book and if you were to introduce the Swedish-style floor of 25% of risk weight and that would in our case lead to additional risk related asset to about 9 billion.
And it would be given effect that the risk wage of course different through Europe also in our portfolios would have different impact on different portfolios and we had a big one and that we have apart from Belgium is Germany, there the impact would be lot loss because the risk rates are already higher. And so we're awaiting the developments there, but it's hard to predict.
I don't think we are overly sensitive but clearly as a bank that has a lot of its portfolio on advanced models and relatively low risk profile this is something that we're watching very closely. And on Belgium I am aware of some model updates that have impacted risk weighted assets modestly I don't think it was that sharpened increase.
Operator
Thank you. Our next question comes from Kiri Vijayarajah from Barclays.
Please go ahead.
Kiri Vijayarajah
Just a couple of questions. Firstly, going back to the dividend, you said you'd look at the 40% payout ratio when you get to the end of the year depending on the surplus.
But I wondered if you would consider paying some of that out in an interim dividend in the summer, because I remember if you go back pre-crisis you guys did used to pay interim dividends part way through the year? And a second question, just quickly on the commercial bank, you've announced some extra redundancies there.
I wonder if you could tell us which products, which geographies you're downsizing there in the commercial bank? Thanks.
Ralph Hamers
[indiscernible] commercial bank, but we're going back on the dividend. On the commercial bank the actual redundancies.
As you know we have been transforming the commercial bank according to the CB TOM which is a transformation program and what you normally see in these transform programs as you see while you are transforming you see more and more opportunities and we see that here as well. So basically what you see in terms of the net redundancies is that the gross redundancies are little bit higher plus we see a scope for a reduction of the appraisals side and on the technology side, given the factor we further simonized our processes than our technology.
However at the same time we're also hiring people and that's more on the commercial areas, so it's a net number. But basically it is just we see the opportunity to generate more savings on the back of actually an improving client experience going to standup products and standup technology across all the geographies in which we are active.
On dividends and maybe we haven't been clear enough. But the policy is for an interim and a final, so two dividends.
And what we do is pay the 40% in the interim and at the final we will take a look at the holistic picture as I said already around growth opportunities, have a lot of profitability, regulatory environments even at the generally lay of the land and at that point at the end of the year and also by that point we will have a better view of where we are in terms of realizing the value crystallizing value in terms of Voya and so we know how much we physically have payable to potentially distribute. So we will take a holistic view at the end of the year and that's only at the end of the year then we will form a view whether paying above the 40% is the right thing to do.
Operator
Thanks. And our next question comes from JP Lambert from KBW.
Please go ahead.
JP Lambert
The first question is related to acquisitions. If I look at Belgium where there's some concern about potential acquisition, in this -- because there's a bank on the block and at some point, it doesn't make sense really, because you're in the process of making IT simplification, to add another bank would create quite a complex situation again.
In fact, you've been reducing branches, so why add branches? So to me in a stable market such as Belgium it doesn't make sense.
What is your point of view outside of a core market? What would be of interest to you, in theory, in terms of gain of clients or branch network, just to understand the logic?
The second question is oil and gas, no negative developments in the short term. What would a trigger for additional provisions in your view?
What event could be triggering additional provisions? Thank you.
Ralph Hamers
Well acquisitions as I said earlier you know our strategy is [run] for calling for organic growth and improve efficiency around that. So we don't necessarily talk about core markets either from that perspective.
We're actively in what we call the market leaders area which is the Benelux, the challenges in growth countries. And we basically see -- even in Belgium we see customer growth actually quite rapidly by taking the challenger attitude.
But also in all the other challenger countries we see customers coming on board; volumes growth coming through and we see the same in the growth market. So in the growth markets like in Poland, Romania and Turkey we actually are growing faster than the market and the market is growing fast itself.
So in all of these markets our strategy is an organic growth strategy. And as you know I can continue to repeat that we are not considering any specific acquisitions to add to the strategy and if at all it would be completely in line with the strategy, but it's premature to talk about it given effectively we're showing the organic growth and in fact that was an acquisition band anyway, although oil and gas I will give the word forward to Wilfred.
Wilfred Nagel
So on oil and gas, if you look at page 33 of the presentation you see a bit of breakdown of the portfolio and the types of exposures that we have there and what you will notice about 12% of the portfolio is more directly export to oil prices directed on the indirectly obviously where the sensitivity would be in that part of the portfolio would be low oil prices for much longer. We’ve look it up, we have stress-tested particularly that part of the book at oil prices well below where we’re today and also with them staying low for longer, we don’t see for the next 2 and 2.5 years any major issues in that book if it were to last a lot longer than then obviously pressure would increase and that would indirectly also effect some of the other exposures and this would be particularly the case if somebody or majors would become under pressure because that’s where directly or indirectly a lot of the rest of the exposure is.
So short term effect we’re not too concerned, I would also argue that if oil stays low from much longer that would have a beneficial effect on other parts of our portfolio. So whether it would really impact the overall risk costing in our total book remains to be seeing.
Operator
Thank you, our next question comes from Benoit Petrarque from Kepler. Please go ahead.
Benoit Petrarque
The first one will be on the financial market division again. It looks like the bit on the net interest income comes from the financial markets.
Could you just explain us a little bit what is going on in the again, other income line? The other income line is down 600 million year-on-year in 2014.
I know there is a drag from CVA of 200 million, but have you changed anything on the income allocation between other income and net interest income, which will actually explain the bit this quarter? Second question is on the loan growth, very strong in Belgium.
If you strip that out we have actually negative loan growth in the quarter. I know we cannot look only at one quarter, but what do you expect in the coming quarters in terms of loan growth, especially on the oil and gas sector?
Do you see a significant lower exposure coming in, in 2015? And do you see also a pickup in credit demand in the Benelux, especially on the SME side?
And then just, I was wondering when you pay the dividend from the Group and not the Bank, is that a timing issue or is there other reasons for that? Thanks.
Wilfred Nagel
Okay, I will the one on the loan growth and, yes on the quarter, I think that what you’re indicating is right, so for the quarter specifically we saw two developments, Belgium we see continued growth actually everywhere we see continued growth; however, we also saw an overall negative growth because of subdue demand in Netherland in business lending. The increasing prepayments of mortgages in the Netherlands on the back of the as I said already is the final kind of months in which people could actually use this tax holiday to take €100,000 kind of gift tax free in order to prepay mortgages, so we saw an acceleration there.
And then we saw clearly a decrease in exposure on Russia which we’re managing down as we have indicated to you. And we see lower volumes -- value volumes on the trade finance side because of the PCF side because of the lower oil price.
And so basically we see this more like this is kind of the result of the one quarter. For us it is important to look at the underlying engines in the direction of our strategy and which I have indicated, we see real loan growth in the structured finance areas across and we see a real loan in both mortgages outside of the Benelux as well as the loan mortgages outside of the Benelux.
Then specifically two to Benelux we would -- in Belgium we see demand and growth as normal economies developing average. In Netherlands, we actually hope the economic growth that has to come this year that, that will actually support a bit of loan growth on SME side as well, and we should know that Dutch economy is an [open] colony, so the lower euro should help most of the exporters to see some volume growth.
And the lower interest rates and the lower oil price should also help because you euro spending as well. And there most of the real structure reforms that any country needed to be done, has been done in the Netherlands.
We expect also on the back of that the economic growth will be back in the Netherlands and therefore we will support for the SME business and there is also for increase in demand. And the other two questions, I’ll ask Patrick to comment on.
Patrick Flynn
Yes, other income, I mean I think the moving factors in Q4 are broadly the same for the course of the year and the other thing you need to remember then when it was a big relief in the last year with shapes the delta in respect of the our idea remember when we got, the exit I doubt there was a benefits to, but that’s nonrecurring -- and so that’s another factor. But in terms of moving the pieces within other income is it’s same as the hedging effect that was fees it’s the lower for financial markets, which is lower year on year and some volatility and bank treasury as I mentioned.
Benoit Petrarque
And on the dividends?
Wilfred Nagel
By within from the group and well ultimately the group will under -- the bank would become the group and else we are we execute on our sell down and how we are spin of NN and Voya is that what’s what it will be. And also would be pay dividend is strong in the group physically and also the regulator are into a lot more of the group for all those regions I think make a sense to focus on the group.
Operator
Our next question comes from Steven Haywood from HSBC. Please go ahead.
Steven Haywood
You've previously commented that a 60% payout ratio isn’t too high. Now on your normal dividend and excluding any additional capital returns, is this comment still true to form?
And also, if you could give us clarification on when the closed period ends, the sell-down of stakes in NN and Voya please? Thank you.
Patrick Flynn
Okay I don’t remember ever saying anything was too higher or too low. I mean we're seeing minimum 40%, we will not excess whether at the end of the year whether it's appropriate to pay more given the conditions that I mentioned.
It was me and most of had in metal block when I said 60%, but I don’t remember ever saying that so you have to point me where I said if I did. Than in terms of NN and Voya they both have results this week and after that we are free to that.
Steven Haywood
Okay. I'm just following up from a comment you made at the Investor Day last year, so quite a while ago, on the dividend, 60%.
Wilfred Nagel
I know whether it comes from. So basically on the strategy day we indicated that if the strategy works out where we wanted to go.
That at the end of the year this is pure from the bank and you're going to growth in the bank and this not looking at the services of the group at that moment in time. We indicated that basically if you look at the capital generation of the bank has as of the end of the year basically we would look at 30% of the group profit to support and prove Cather of the bank profit to support better cap ratio in the bank 30% to support the growth in the bank and 40% to be paid as a dividend at a minimum that’s what we indicated, at a minimum.
And at being much more than that would either infringe on organic growth or capital build up. Now that was a year ago and that was completely unrelated to servers on the group level and at the moment we had basically some execution risk still ahead of us we haven’t fully repaid the state at that moment in time.
We had an IPO with NN group we didn’t know the value there exactly and how the group structure and the group surface would look like and whether there would be a surface at all on group level and therefore at that moment we were cautious on our statements there. Clearly were we continue now is first we say well it's a 40% pay out of distributable profit and bank group where we removed to the group because the regulators looking into a bit more at group now at the end of the year based on the financial results based on the strategic developments and based on regulatory considerations we see when a recap pay more out of the surplus of group level if monetize there as well.
Operator
Our next question comes from Max Le Gouvello with Credit Suisse. Please go ahead.
Max Le Gouvello
Credit Suisse. Two questions; the first one is regarding structured finance in the Q2 presentation you provided us a very interesting slide giving us the lending gross by segment, would it be able to have the same data, please?
The second question would be regarding a follow-up of Guillaume Tiberghien's question regarding RWA inflation. As you mentioned that most of your activities are under advanced methodology, which means more exposed to rating changes.
If we have some downgrade, due to the oil crisis, how long you will take to reflect into your RWA inflation? Thank you very much.
Ralph Hamers
Intends of just providing data, I'd prefer if you will and by our [indiscernible] and but we can focus now on more strategic stuff.
Patrick Flynn
So your question was how oil prices translate into our WA is that correct.
Max Le Gouvello
Well it's the drop of the oil price will have some impact on some of your corporates, in term of ratings. As you told us that most of your divisions are on the advanced methodology, it means that potentially those ratings are going to be at risk; so potentially at the end, increasing RWAs.
With your experience how long does it take, when you start to have the beginning of the crisis to see the inflation of the RWAs?
Patrick Flynn
Well we typically update models twice a year. So that means there is always one or two quarters lag.
But frankly, I think we should read too much into this potentially effect because there will some impact on the ratings and the collateral will tell you some of the credits. At the same time I don’t expect in the typical rating area where we are with these clients a one-notch difference either way it doesn't have a massive impact on risk rates.
And secondly we shouldn't forget the secondary effect of lower oil prices on the rest of this book. So frankly, if I would hazard a guess I would say the chances of risk rates purely based on this coming down are probably higher than them going up.
Operator
Thank you. Our next comes from Tarik El Mejjad from Bank of America Merrill Lynch.
Please go ahead.
Tarik El Mejjad
I have two questions; one on loan growth and one on capital. First on loan growth, if I look at slide 29, clearly your core lending business for the quarter was nil.
And if I focus on the structured finance it was 800 million. That's still positive but much, much lower than the quick start you had done in the first half of last year.
I know that there was all these headings about Russia, oil and gas and so on, but what are the new sectors or segment that you will be targeting to offset this lower activity from these segments, because I think it is there to stay? Secondly, how are you confident that actually you will still be able to grow faster your commercial banking than your retail banking, because I guess you still have in mind all this strategy of shifting to higher-yielding assets to boost your margins?
My second question is on capital and I think Omar asked the question about the revaluation reserves that are quite high. How do you think about capital distribution?
Do you, in your mind, net off that or do you keep that? I'm sorry if you answered the question, but I didn't feel that you did.
And still on capital, AT1s, are you planning to go to the market soon and what will be like sort of the timeframe to issue, I think, 4 billion or 5 billion AT1s if you have to? Thank you very much.
Ralph Hamers
Okay. Thanks for the question.
Yes so I think you are right in coming to the conclusion that the growth in the CP for the quarter and CCBs such as finance at 800 million is lower because we are always de-risking on the Russian side, and so that's one. We do so growth in all segments and structured finance also in things related to oil even.
And so that's we don't see that we really have to focus on other activities in other segments. All segments are growing, we feel that we can grow faster in CB by adding to some of the franchises that we have and even diversifying little bit more geographically which is exactly what we're doing sort of building up teams in the Americas as well as in Asia in order to support the growth of those that franchisee on the back of 25 years of knowledge in all of the sub segments.
So we feel comfortable that we can grow faster there by adding some more people. You should realize that although we're a large player in the end we have a 3% market share.
So it kind of shows that we could still -- we still have room to grow there. On the [reval] reserves and the alternative capital issuance I guess they work to, but you can see in our press release -- we’ve given every quarter there is, the breakdown of the capital position.
You can see there the quantum of the rebound reserve both for equity and for debt would have been an equity of 1.6 for interest rate and I think we're roughly insensitive to falls in interest rates which means I am not so worried about that from a dividend perspective. And also relative to the size of the surplus we have at the group potentially in the slide shows the residual surface, growth 5.8 approximately comes down because we want to take some of that out, but 500 it's still substantially higher than that.
Therefore in terms of the strategy of looking at the distribution of surplus capital to the extent it's there every year, I think the bigger number is the surplus of the group and ongoing bank capital ability to generate capital there are two more important factors I think in my thinking then a concern around the interest rate which I think is roughly modest sensitivity to this. So hopefully that is a better answer and if you want to pursue it more we're happy to do so.
And in terms of AT1 issuance, AT1 is a core part of our capital stack and we have not been able to issue it up to because of the tax deductibility issue which has been resolved so we are now in a process of looking at having restructured what we would do and we will put structure type whatever to take and when we're ready to come back with more specifics we will do so.
Tarik El Mejjad
Okay. Just a quick follow-up on long-growth please.
On the margin thing, how confident [indiscernible] to still grow in this year commercial banking with higher asset yield faster than in a sense retail Belgium or even Germany?
Patrick Flynn
As I indicated we're investing in this area or adding even more people. We started to add people about a year and a half ago in these areas, we see this production going through we are very disciplined in pricing no matter what, whether it’s in the CB area or in the retail area, so the strategy is focus on higher margin segments both in CB area as well as in the retail area.
And that’s exactly where we see the growth. As indicated, we see a 17% growth in structured finance over the year and we see a 14% growth in non-mortgage growth in retail banking international over the year as well.
So in both in higher margin areas for example in Germany we’re growing fast in the consumer finance side in our model, so this is that shows also a growth in higher margin and with the business. And we see healthy margin also on the mortgage side by the way.
Operator
Thank you. Our next question comes from Matthew Clark of Nomura.
Please go ahead.
Matthew Clark
Two questions; first is on the strategy for the Asian banking stakes at TMB Bank of Beijing. Could you just update us on your thinking there?
Why is that a good use of shareholders' capital to keep those stakes? Then second question is on the negative derivative revaluation impact in the commercial bank.
Could you just give a bit more light on what that was? What were the external movements that drove that?
And why we should be comfortable that that's not going to be a recurring feature? Thank you.
Patrick Flynn
Well, as I elaborated upon common to agent stake we don’t treat them any different from any other activity that we have. And we have this, what we call a sustainable share framework all of our activities business lines or geographic focus we have taken through the framework.
We basically look at the customer positioning, we take a look at the market positioning of our activities. We take a look at returns, returns on equity as well as these activities as well as whether they have a sustainable balance sheet development, so both at the liabilities.
So regards of where the activity is whether its’ Europe or Asia or whether we’re 100% owner or a smaller owner, if we fulfill this and we see an improvement plan that is promising and a good use of shareholders value. We will do so.
If we can actually accelerate the return on shareholder value and improve our franchise, we do so as well as what we did in India. For example for Vysya we took -- we had our own plan strong organic improvement plans, but we also saw the opportunity to engage into a merger discussion with the Kotak Mahindra.
And as a consequence of which we could accelerate some of the improvements in Vysya area and you’ve seen that has been a good decision from a shareholders perspective in terms of the share price coming up, a very good merger partner for us also with the capabilities on both side, getting a better scale in the country, focusing on the digital banking which will come from our perspective, having a better offer for our international clients in India as well. So this [forks] up with one of those decisions that we took that we could actually improve beyond from where we were and then we do it and you can expect that from us in every activity and that is not necessary only for the Asian activity.
So we’ll do the same for any other activity. If we think we can do it better in a different way, we will do so.
If we feel we’re doing well this way and we can improve ourselves, we will do so as well. But you know we’ve taken tough decisions on setting ING direct in Canada where we saw -- basically felt that the next stage of development of ING direct was better when it would be in the hands of another banks, so we did and that was a tough decision and in India we took a different decision as well.
So that’s the way go by it. Sorry I think there was one question on negative derivatives impact, on negative derivatives impact.
And it is irritating the accounting noise we get from hedging effectiveness and that something we’re looking to try and dampen because it does create some noise; however, economically the vast book of this is simply accounting noise. We have solid economic hedges however some of the details descriptive level and technical parts of IAS-39 require you to test for hedging effectiveness.
And where we have hedging effectiveness it simply after write-off the carrying value of the derivatives and you get back overtime. So economically hedging effectiveness per se is not an economical concern it is from accounting reporting perspective, appreciate that but you should be aware that we had it all year and not spending that, which is being negative.
We still deliver very good results including the fact that we effectively scroll way to money for the future. That said we’re looking to try dampens this to the extent we can and we’re -- perhaps in Q1 we can give some further updates, we’re looking to try and see if we can make this little bit quite structure we say.
Matthew Clark
Is this hedging of the mortgage portfolio? And if so, should we be thinking of it's a pretty long time to unwind in a 5 to 10 years, rather than it will unwind over period of quarters?
Patrick Flynn
Partially that’s but it’s more complicated this nothing against in fact treasury against deposits as well.
Operator
Our next question comes from Geoffroy de Penagos with BNP Paribas. Please go ahead.
Geoffroy de Penagos
I have two questions. The first was on H1, but you already answered it.
The second one was on TLAC and if you have any specific comment to make on this topic. Also, in the context of TLAC, are you considering using your holding company to issue a debt instrument?
Thanks.
Ralph Hamers
Okay I'll give the answer on TLAC on TLAC I think there are proposals their they're asking banks to react for most proposals it's not completely clear as to where we're going on this one and there is a couple of facts and parts of TLAC that we don’t necessarily support. For example we are supporting tester rebuilding over contractual billing in our strategy the prepositioning in TLAC although understandable concept doesn’t make sense within the SSM otherwise there is no SSM necessary anymore because it will not just give any added value.
So as a bank and to benefit from European banking union that TLAC is specifically degree of positioning part of it would not be very good. Than as we have already indicated we do have a bank halting in the group and although when we started the restructuring into group we indicated that in the end probably the group and the bank could [submerged] clearly we now have an option depending on where TLAC goes and we also have the option to use the group as the halting and see whether a different structure works better for us going from there.
As said TLAC discussion are moving in different directions these are three points that are specifically goes earning our position with durational we support statutory bill in over contractual billing we don’t like to repositioning elements specifically not within the SSM because it basically defines the whole purpose of the SSM and the third one their if it happens then at least we do have an option to works through a halt -- through a holding company.
Geoffroy de Penagos
Thank you.
Ralph Hamers
With that we have come to the moment to this call. Thanks for your questions as you may still have more questions readings for the material that we have release that our team investor relations team is happy to take you through more details and give you more comments for now I'm very happy that you participated in the call and ask all these questions 2014 was an important year for us and it has been a very successful year for us on the restructuring end of things prepaying the state early coming out with the dividend at the end of the year.
On the commercial side of things the strategy is working we see that in the growth of customers like more than 1 million customers we've seen in the growth on the saving side as on the lending side. So with that we're quite happy with the results so far.
Thanks for interest and wish you good day.
Operator
Thank you. Ladies and gentlemen, that concludes today's ING's Q4 2014 Conference Call.
Thanks for your participation. You may now disconnect.