ING Group created the Bank Treasury department in June 2012. It is a functional division at Group level but has local departments - Bank Treasury is managed at each ING entity. The Bank Treasury department primarily manages the Bank’s balance sheet, i.e. cash, liquidity and ALM. Bank Treasury has no direct links with customers but organises quotes to the interest rate product segments on both the asset and liability side of the balance sheet. The department exists totally independently of the bank’s other segments but supports all the business lines and guides their strategies by identifying for each product the impact on liquidity and the balance sheet.
Relationships are conducted on the basis of a transfer price system between Bank Treasury and the bank’s segments. Liquidity provision or destruction costs are charged to the segment. Bank Treasury bears the interest rate risk of the segments by analysing only the sales margin and if necessary the behavioural risk of the relevant customers. The liquidity management policy organised within Bank Treasury is a full component of the Bank’s strategy.
The Bank Treasury department was created on the back of a need to manage the Bank’s balance sheet by identifying and managing all the associated risks. The department facilitates the development of the Bank’s credit and deposit business.
The department performs a range of tasks:
- Manages the bank’s balance sheet and distributes income to the various Wholesale Banking, Retail Banking International and Retail Banking Benelux branches.
- Manages the bank’s regulatory liquidity based on consideration of costs, risks and interest rates
- Manages and maximises the net interest margin, while complying with European regulations
- Reports to the local Management Board and the Group Bank Treasury management team on changes in income and the balance sheet throughout the year, working both at local and Group level on short- to long-term optimisation
Generally speaking, the objectives of the Bank Treasury department entail balancing the Bank’s books and managing regulatory requirements in accordance with all the criteria imposed by Europe’s CRD IV regulations.