ING Direct manages minimal mortgage growth in 2011

ING Direct managed mortgage growth of just 1.9% in 2011, with its mortgage book increasing from $36.7 billion to $37.4 billion during the 12 months to December 31, 2011, its annual results show.

This is well below the 5.4% annual aggregate mortgage growth recorded by the RBA.

According to January 2012 APRA banking figures, ING Direct’s mortgage book shrunk in first month of the year to $37.2 billion.

The lender reported net profit after tax of $304.3 million, a 10% increase on the previous year.

Executive director of delivery Lisa Claes said mortgage growth had fallen well short of "aggressive expansion" targets made early in 2011.

The bank had forecast a 20% increase in mortgage lending in 2011.

Despite the lacklustre growth, it remains the sixth biggest lender in Australia behind BankWest (owned by the Commonwealth Bank), which has a loan book in excess of $45 billion, according to January 2012 APRA banking figures.

The seventh biggest lender is Suncorp, which has a loan book of around $29 billion, according to APRA figures.

During the course of the year the bank deleveraged significantly, with its ratio of total deposits to loans up from 57% to 64%

Risk cost (the funds a bank needs to set aside to cover for loans that might default) dropped to 18%.

ING chief executive Don Koch says 2011 was a year where the balance sheet strengthened, underpinning plans for long-term growth in the Australian market.

“We saw very strong growth in business deposits reflecting a strong desire of SMEs to look beyond the big four.

“We also continued to diversify our funding mix, which is a key plank to facilitate future growth.

“Our customers are keen for us to expand our offerings in the Australian market and we see opportunities in a number of areas,” Koch says.

The bank has more than 1.5 million customers.