# ING Groep N.V. (ING) - Business, Risks and Management Discussion (fiscal Q2 2026) ING Groep N.V. reports in euros. Every money amount in this document is converted from euros to US dollars: flows over a period at that period's average rate, balances at the closing rate on their date. Percentage changes, ratios and margins are as the company reports them, measured in euros. Each NYSE-listed American depositary share represents one ordinary share, so per-share and per-ADS amounts are the same. **Two accounting bases.** ING files with the SEC under IFRS as issued by the IASB ("IFRS-IASB"), but manages the business and publishes its own results under IFRS as adopted by the EU ("IFRS-EU"). The only difference is the EU "carve-out" of IAS 39, which lets ING apply fair-value hedge accounting to its mortgage and savings portfolios. Under IFRS-IASB those hedges do not qualify, so fair-value swings on the related derivatives run through profit and loss, and the reported net result moves with long-term interest rates. The adjustment is booked in the Wholesale Banking segment. Segment figures, quarterly press-release figures and capital figures below are IFRS-EU unless stated otherwise; the SEC-basis statements are IFRS-IASB. ## Business *Source: Form 20-F for the fiscal year ended 31 December 2025, accession 0001628280-26-011979 (Item 4, Item 5 and Note 30 "Segments").* ING is a Dutch-based universal bank that makes most of its money from the spread between what it earns on loans (residential mortgages above all, plus business, consumer and wholesale lending) and what it pays on customer deposits, topped up by a growing stream of fees from payments, investment products, insurance and corporate advisory work. It serves nearly 41 million retail customers in 10 markets (the Netherlands, Belgium, Luxembourg, Germany, Spain, Italy, Türkiye, Poland, Romania and Australia) and large corporates and financial institutions from a Wholesale Banking network in 37 countries. The group has more than 60,000 employees. In 2025, on the IFRS-EU basis, total income was $26.04 billion, of which net interest income was $16.60 billion, net fee and commission income $5.20 billion and investment and other income (largely Financial Markets and Treasury) $4.24 billion. ING Groep N.V. is a holding company whose one main subsidiary is ING Bank N.V.; the bank in turn owns the Dutch and foreign banking subsidiaries. The retail model is digital-first: 87% of retail customers chose mobile as their main channel in 2025, the mobile primary customer base grew by more than 1 million to 15.4 million, and the strategy ("Growing the difference") aims to turn more customers into primary relationships (an active payment account with recurring income plus at least one other product) and to sell them investment, insurance and lending products. Total assets under management and e-brokerage reached $326.26 billion at the end of 2025, up 16%. In the Netherlands, ING's largest market, its main competitors are ABN AMRO and Rabobank; the 20-F also names fintechs, non-bank and big-tech lenders, digital banks and stablecoin-based payment systems as growing competition. The business is reported in six segments. Their 2025 total income and result before tax (IFRS-EU) show where the earnings come from: - **Retail Netherlands** - daily banking, mortgages, savings, investments and insurance for individuals, business banking and private banking clients. Total income $5.62 billion; result before tax $3.14 billion. - **Retail Belgium** (including Luxembourg) - the same product range in Belgium and Luxembourg. Total income $3.02 billion; result before tax $728.12 million. - **Retail Germany** - the same range in Germany, where mortgages, savings and investment products drive growth. Total income $3.38 billion; result before tax $1.65 billion. - **Retail Other** - the six retail markets of Spain, Italy, Australia, Poland, Romania and Türkiye. Total income $5.55 billion; result before tax $1.90 billion. - **Wholesale Banking** - lending, payments and cash management, working capital solutions, trade finance, financial markets, corporate finance and treasury for corporates and financial institutions. Total income $7.92 billion; result before tax $2.97 billion. - **Corporate Line** - capital management, foreign-currency hedging, the financial stakes in Bank of Beijing (about 13%), TMBThanachart Bank in Thailand (about 20%) and Van Lanschot Kempen (raised to 20.3% in 2025), and the effect of hyperinflation accounting for the Turkish subsidiary. Total income $547.22 million; result before tax a loss of $33.92 million. Capital and shareholder returns are central to the equity story. ING targets a common equity Tier 1 (CET1) ratio of about 13%, against a regulatory CET1 requirement (including buffers) of 11.03% at the end of 2025. Its policy is to pay out 50% of resilient net profit (net profit adjusted for significant items outside the normal course of business), mostly in cash, and to return capital above the target through additional distributions, mainly share buybacks. On top of the regular pay-out, ING made $4.07 billion of additional distributions in 2025. It also uses significant risk-transfer (SRT) transactions to free up risk-weighted assets ("capital velocity"). There were no significant acquisitions or divestments in 2023, 2024 or 2025. ## Risk factors *Source: Form 20-F, accession 0001628280-26-011979 (Item 3.D "Risk Factors"; Note 42 "Legal proceedings"; Capital management), with updates from the interim report on Form 6-K, accession 0001628280-26-050785 (Risk management; Note 19 "Legal proceedings").* The risks that matter most for ING's earnings and its capacity to keep returning capital: - **Interest rates and the European economy.** A large share of revenue comes from the Benelux and Germany, so a downturn there would hit loan demand and credit quality. Net interest income depends on pricing savings against re-pricing assets: lower rates compress the spread on deposits and can trigger mortgage prepayments, while higher rates raise funding costs, reduce the value of fixed-income holdings and push weaker borrowers into arrears. Rate moves also drive the IFRS-IASB hedge-accounting swings described above. - **Capital rules and distributions.** ING must stay above its CET1 requirement and its maximum distributable amount (MDA) thresholds; a breach would restrict dividends, Additional Tier 1 coupons and variable pay. The EU's CRR III, effective from 1 January 2025, constrains internal models and phases in an output floor through 2032. ING Groep is also subject to the EU resolution regime, including bail-in powers, and to MREL requirements (28.22% of risk-weighted assets at the end of 2025). - **Financial economic crime and compliance.** Since its September 2018 settlement with the Dutch Public Prosecution Service over customer on-boarding and anti-money-laundering failings, ING has faced heightened scrutiny from authorities in several countries, which can lead to findings and remediation. A Luxembourg court has referred alleged AML shortcomings at ING Luxembourg to the criminal court; ING does not expect a material financial effect. Investors claiming $688.90 million of damages over ING's past disclosures lost at first instance in November 2025 and appealed in February 2026, now against ING only; ING discloses no provision for the claim. - **Conduct and litigation in specific markets.** ING Poland faces suits over Swiss-franc-indexed mortgages (a portfolio provision is held; EU court rulings in 2026 were favourable to banks on recovering capital). ING Spain faces claims over mortgage formalisation expenses (provision held). ING Bank Türkiye is in disputes with the Turkish deposit insurance fund over predecessor banks' offshore accounts. In the Netherlands ING has been compensating customers for variable interest on revolving consumer credit that allegedly did not follow market rates, a process still ongoing. - **Russia.** ING still has a business in Russia and Russia-related exposure; sanctions, counter-sanctions and Russian court rulings against Western banks create credit, legal and loss-of-control risk, and Russia-linked entities have sued ING entities and in at least one case seized assets in Russia. The sale of ING Bank (Eurasia) JSC to Global Development JSC, announced in January 2025, was terminated in April 2026 because ING saw no realistic prospect of the buyer obtaining approvals. Offshore credit exposure to Russian counterparties was $456.68 million at 30 June 2026. - **Climate and ESG.** Milieudefensie (Friends of the Earth Netherlands) sued ING in Amsterdam in March 2025, alleging it contributes to climate change; ING filed its defence in February 2026. ING also faces transition and physical climate risks in its loan book and greenwashing and reputational risk. - **Operational, IT and cyber risk.** As a digital-first bank, ING is exposed to system outages, ransomware and other cyberattacks, failures at third-party providers and flawed outputs from AI models, and to tightening rules such as DORA, NIS2 and the EU Cyber Resilience Act. The ECB's 2024 cyber-resilience stress test identified areas for improvement in ING's response and recovery capabilities. - **Competition.** Fintechs, digital banks, private and big-tech lenders and new payment technologies compete for both retail customers and business lending, pressuring margins in largely commoditised products. - **Funding, ratings and the holding structure.** ING relies on customer deposits and capital markets for funding; large deposit withdrawals or a ratings downgrade would raise its costs. As a holding company, ING Groep depends on dividends from subsidiaries that are subject to regulatory limits on paying them. ## Management's discussion of 2025 *Source: Form 20-F, accession 0001628280-26-011979 (Item 5.A "Operating results", Item 5.B, Capital management).* **The two net results moved in opposite directions.** On the SEC (IFRS-IASB) basis, net result attributable to shareholders rose 56% in euros to $9.41 billion from $5.77 billion in 2024. The increase came from hedge accounting, not the business: fair-value changes on derivatives that hedge the mortgage and savings portfolios added $2.26 billion in 2025, against a $1.14 billion negative effect in 2024, mainly because of market interest rates. On ING's management (IFRS-EU) basis, net result was $7.15 billion against $6.92 billion in 2024: about 1% lower in euros, higher in dollars only because the euro strengthened. Resilient net profit equalled the IFRS-EU figure. **Revenue grew modestly on a shifting mix.** Total income rose 1.9% to $26.04 billion. Net interest income fell 2.3% to $16.60 billion, while commercial net interest income (lending and liability interest excluding volatile items) held at $17.32 billion: lending interest income rose $151.50 million as volume growth outweighed a lower average margin (partly from a growing share of lower-margin, higher-return mortgages), and liability interest income fell $313.18 million as deposit growth did not offset lower margins on retail deposits and Wholesale Banking's payments and cash management. Net fee and commission income rose 15% to $5.20 billion, driven by investment products, payment packages and Wholesale Banking deal flow. Customer lending grew $46.92 billion; net core lending growth (excluding currency effects, Treasury and run-off portfolios) was $64.33 billion, more than double the prior year, and net core deposits growth was $43.08 billion. **Costs and credit.** Operating expenses rose 3.8% to $14.23 billion, including $979.12 million of regulatory costs and $335.79 million of incidental items, mainly restructuring; excluding both, expenses rose 3.2%. Loan loss provisions were $1.47 billion, or 19 basis points of average customer lending, below the 20-basis-point through-the-cycle average; new Stage 3 inflows were limited and there were several recoveries. The effective tax rate was 27.8%. **Segments.** Net results by segment for 2025 were: - Retail Netherlands $2.31 billion (down 1.4%): income edged up on mortgage and business lending growth and higher fees, and costs fell slightly, but loan-loss charges of six basis points replaced a small net release in 2024. - Retail Belgium $526.87 million (down 22%): lower liability margins and higher deposit-guarantee contributions, plus restructuring costs from multi-year transformation programmes, despite fee income up 15%. - Retail Germany $1.11 billion (up 3.6%): fee income up 46% on investment trading and daily banking offset lower interest income. - Retail Other $1.20 billion (up from 2024): lending and deposit growth, especially in Spain, Italy, Poland and Australia, with risk costs concentrated in Poland. - Wholesale Banking $2.15 billion on the IFRS-EU basis, lower than 2024: fee growth of 9% only partly offset margin compression in payments and cash management and negative currency effects, while higher investment spending and $101.76 million of restructuring provisions lifted costs. Financial Markets income rose 6.7% to $1.71 billion. Including the hedge-accounting adjustment, the IFRS-IASB segment result was $4.41 billion. **Capital.** The CET1 ratio fell to 13.1% from 13.6% as ING distributed capital towards its ~13% target and risk-weighted assets grew $7.91 billion, partly offset by two SRT transactions executed in November 2025. The Tier 1 and total capital ratios ended the year at 15.3% and 18.4%. CRR III and other model changes had a negligible net effect on the CET1 ratio. ## Current quarter: 2Q2026 and the first half *Sources: ING Press Release 2Q2026, Form 6-K Exhibit 99.1, accession 0001171843-26-005044 (IFRS-EU, quarterly and six-month figures); condensed consolidated interim financial information for the six months ended 30 June 2026, Form 6-K, accession 0001628280-26-050785 (IFRS-IASB statements and IFRS-EU segment discussion).* **A strong quarter on the management basis.** In 2Q2026 net result was $2.26 billion, up 16% year on year in euros (19% in dollars) and 25% on 1Q2026, and profit before tax was $3.40 billion, up 23% year on year. Net result per share rose faster, 21% year on year in euros to $0.79 (from $0.64; 24.5% in dollars), because buybacks cut the share count. Return on tangible equity, the profitability measure ING adopted from 1Q2026, was 17.0% (14.5% on a four-quarter rolling basis), and the cost/income ratio was 49.1%. **What drove it.** Total income rose 10.2% in euros (13% in dollars) to $7.31 billion: - Commercial net interest income rose 10.7% year on year to $4.86 billion, and 2.8% on the previous quarter. The average liability margin improved to 1.07% from 1.04% in 1Q2026, reflecting a continued tailwind from hedging on replicated deposits partly offset by higher campaign-related deposit costs, and liability interest income rose $112.83 million quarter on quarter; lending interest income rose $18.61 million as strong volume growth offset a 2-basis-point decline in the average lending margin to 1.24%. The commercial net interest margin was 2.26%. - Net fee and commission income rose 14% to $1.49 billion, broadly across investment products, daily banking, lending and insurance; retail fees were up 16%. - Other income recovered from 1Q2026, when market volatility after the outbreak of war in the Middle East had caused hedge-ineffectiveness and valuation losses in Treasury. The quarter also included a $29.08 million gain on revaluing ING's existing stake in Goldman Sachs TFI in Poland when it bought the rest, a $25.59 million gain on selling an equity stake in the Netherlands, $20.94 million of one-off gains in Wholesale Banking and a $30.24 million dividend from Van Lanschot Kempen. Year on year other income was lower, mainly because of reduced foreign-currency hedging income in the Corporate Line. **Volumes.** Net core lending grew $17.68 billion (8% annualised) and net core deposits $18.49 billion. Retail Banking contributed $14.07 billion of the lending growth, including $8.26 billion of residential mortgages (especially in the Netherlands, Germany, Italy and Australia), and $19.43 billion of deposits, helped by savings campaigns and holiday-allowance inflows. Wholesale Banking grew lending while cutting its risk-weighted assets 3.6%. Mobile primary customers rose by 377,000 to nearly 16 million. **Costs, credit and tax.** Operating expenses were $3.59 billion, including $90.73 million of regulatory costs and $53.51 million of incidental items (mainly restructuring at Interhyp in Retail Germany, the Corporate Line and Retail Netherlands). Excluding both, expenses were $3.44 billion, up 4.2% year on year on salary increases, marketing and the consolidation of TFI. Risk costs were $324.53 million, or 15 basis points of average customer lending. The $109.99 million management overlay booked in 1Q2026 for the war in the Middle East was released in full and replaced by updated macroeconomic forecasts and a new sector-based overlay; ING also partly released its overlay for Dutch interest-only mortgages and sold non-performing retail loans. Retail Banking risk costs were 10 basis points and Wholesale Banking 27 basis points. The effective tax rate was 30.9% (26.7% a year earlier, when a prior-year tax refund helped), including the effect of Poland raising its corporate income tax rate for banks from 19% to 30% from 1 January 2026. **Segments in the quarter.** Retail Banking produced $2.60 billion of result before tax and a 27.0% return on equity, and Wholesale Banking $935.20 million and 12.5% (both on equity allocated at a 13% CET1 ratio of each segment's risk-weighted assets); Wholesale Banking's income over average risk-weighted assets was above 500 basis points; the Corporate Line a loss of $137.26 million. **First half on the SEC basis.** For the six months, IFRS-IASB net result attributable to shareholders fell 19% in euros (13% in dollars) to $3.71 billion from $4.28 billion, and earnings per share were $1.29 against $1.41. The decline reflects hedge accounting: the IFRS-IASB adjustment was a $372.15 million charge, against an $860.11 million gain a year earlier, because long-term interest rates fell during 2026. On the IFRS-EU basis, first-half net result rose 12% in euros (19% in dollars) to $4.09 billion from $3.43 billion and total income rose 6.8% to $14.12 billion. Net core lending growth for the half was $35.23 billion and net core deposits growth $26.95 billion; first-half risk costs were $729.13 million (17 basis points). **Balance sheet and capital at 30 June 2026.** On the IFRS-IASB statement of financial position, total assets were $1.33 trillion, loans and advances to customers $869.18 billion, customer deposits $882.88 billion and shareholders' equity $62.01 billion; IFRS-EU shareholders' equity, which ING uses to manage capital, was $57.37 billion. The CET1 ratio was 13.1% (up 8 basis points on the quarter), against a requirement of 11.10%, and risk-weighted assets fell to $390.40 billion, helped by $1.16 billion of relief from another SRT transaction and a partial reduction of the TMBThanachart stake. The total capital ratio rose to 18.7% after a $1.16 billion Green Tier 2 issue, and the leverage ratio was 4.2%. Liquidity coverage averaged 137%, the net stable funding ratio was 128% and the loan-to-deposit ratio 0.98. From 1Q2026 ING reserves all net profit outside CET1 capital and finances additional distributions from those reserves, in line with EBA guidance; reserved profit not included in CET1 was $3.11 billion at the end of June. During the quarter Moody's cut ING Bank's long-term issuer and senior unsecured ratings to A2 from A1, which ING attributes to EU-wide full depositor preference under the CMDI package rather than its fundamentals, and Fitch raised ING Bank's long-term issuer rating to AA from AA-. **Corporate actions in the quarter.** - On 24 April 2026 ING Bank Śląski bought the remaining 55% of Polish asset manager Goldman Sachs TFI for $110.15 million in cash; TFI has been consolidated since then and contributed to assets under management of $367.63 billion, up 27% year on year. - In April 2026 ING terminated the agreement to sell its Russian business (see Risk factors). - ING sold part of its TMBThanachart stake into TTB's 2026 share buybacks for gross proceeds of about $354.65 million, reducing its holding to 19.5% while keeping significant influence. - The final 2025 cash dividend of $2.46 billion was paid, and a share buyback of up to $1.17 billion was launched on 30 April 2026. **Outlook.** With the 2Q results ING raised its 2026 and 2027 targets for total income and fee income. It now expects return on tangible equity above 15% for 2026 and above 16% for 2027, with the CET1 ratio kept around 13%. The outlook excludes the potential impact of the intended exit from Russia and other one-off items. ING declared an interim dividend for the first half of 2026 of $0.47 per share, about one third of first-half resilient net profit. ## Subsequent events *Sources: Note 21 "Subsequent events" of the interim financial information, accession 0001628280-26-050785; Form 6-K filings from July to October 2026 as cited.* The interim report's subsequent-events note names one post-period transaction, the Singular Bank investment, and states there were no others. Later filings add the capital actions and results below. - **Singular Bank, Spain (announced 6 July 2026; accession 0001171843-26-004462).** ING agreed to acquire a non-controlling stake of about 40% in Singular Bank, a Spanish independent private bank with about $21.71 billion of client invested assets, from Warburg Pincus, which holds 93%. The purchase price was not disclosed. ING expects minimal impact on its CET1 ratio; closing is expected in the first quarter of 2027, subject to regulatory approvals, and the parties may later revisit the ownership structure, with a possible increase in ING's stake. - **Buyback completed (27 October 2026; accession 0001171843-26-006831).** The programme launched on 30 April finished with 34,954,008 shares repurchased; ING's cost was capped at the programme maximum, with the executing broker funding purchases above it. Weekly progress notices were filed throughout July to October. - **Debt and capital redemptions.** ING called two series of SEC-registered senior notes due 2027, totalling USD 1,750 million, on 11 September 2026 (accession 0001171843-26-005519), and will redeem USD 1,500 million of 5.750% perpetual Additional Tier 1 securities on 16 November 2026 (accession 0001171843-26-006079). - **Management and supervision.** An extraordinary general meeting on 31 July 2026 appointed Andrea Cesaroni to the Executive Board as chief risk officer (accession 0001171843-26-005100); Supervisory Board member Alexandra Reich stepped down effective 1 September 2026 (accession 0001171843-26-005722). The ECB's 2026 SREP left ING's Pillar 2 requirement at 170 basis points, keeping the fully loaded CET1 requirement at 11.12% and the total capital requirement at 15.37% (accession 0001171843-26-006879). - **3Q2026 results (29 October 2026; accession 0001171843-26-006947).** Net result was $2.13 billion, up 3.5% year on year, with return on tangible equity of 16.3%; profit before tax rose 5.7% to $3.11 billion and fee income 9.3% to $1.46 billion. Other income was held back by interest-rate volatility, and risk costs included a management overlay. Two more SRT transactions gave $3.45 billion of risk-weighted-asset relief, the CET1 ratio rose to 13.3%, and ING said it is refocusing and simplifying Wholesale Banking ahead of a Capital Markets Day on 14 June 2027. - **New distribution (29 October 2026; accession 0001171843-26-006948).** ING announced a further distribution of up to $2.13 billion: a share buyback of up to $1.85 billion running from 29 October 2026 to no later than 26 April 2027, and a $279.98 million cash payment on 14 January 2027. The ECB has approved it, and its roughly 56-basis-point CET1 cost is already reflected in the 13.3% third-quarter ratio.