ING Groep N.V. (ING) Earnings

Management highlights

• Continued commercial momentum in 4Q with over 350,000 mobile primary customers added, loan growth robust with absolute growth doubling vs prior year and 8.3% increase since start of year. • Retail Banking had EUR 10.1 billion net core lending growth in 4Q, Wholesale Banking had EUR 10.3 billion. • Core deposits rose EUR 38.1 billion full year, 5.5%. • Fee income grew 15% full year, 20% of total income. • Invested in growth and diversification while leveraging new technologies, reduced customer friction by increasing manual intervention-free customer journeys, introduced chatbot in retail markets for cost savings and better customer experience. • Maintained strong NPS positions, retail banking #1 in 5 out of 10 markets, wholesale banking NPS 77. • FTE over customer balances ratio improved over 7% since 2023.

Guidance

• 2026: Expected total income around EUR 24 billion, supported by continued volume growth and 5%-10% fee income increase. Total operating expenses (excluding incidentals) projected EUR 12.6 billion - 12.8 billion. CET1 ratio target around 13%, ROE 14%, ROTE higher than 14%. • 2027: Expect total income to exceed EUR 25 billion, fee income expected to exceed EUR 5 billion, operating expenses (excluding incidentals) around EUR 13 billion, ROE 15% and ROTE more than 15%.

Segment performance

Retail Banking: Added over 350,000 mobile primary customers in Q4, with net core lending growth of EUR 10.1 billion in Q4, driven mainly by residential mortgages. Core deposits rose by EUR 11.3 billion in Q4. Fee income in Retail Banking benefited from customer growth and cross-sell. Wholesale Banking: Added EUR 10.3 billion in net core lending in Q4, supported by strong demand in lending and working capital solutions. Had a small net outflow of core deposits in Q4 mainly due to lower short-term balances in cash pooling activities. Fee income in Wholesale Banking saw a sequential decrease but still had solid results in Financial Markets and Corporate Finance. Overall, commercial NII was strong at EUR 15.3 billion, fee income increased 15% for the full year with fees accounting for 20% of total income, and investment products performed well with growth in customer numbers, assets under management, and trades.

Risks & headwinds

• Treasury expected less income from foreign currency hedging due to lower interest rate differential. • Risk costs EUR 365 million in Q4, net addition to Stage 3 provision EUR 389 million mainly due to individual Stage 3 provisioning for some funds in wholesale bank, with Stage 3 ratio slightly increasing. • Operational risks related to various processes and potential impacts on business if not managed properly.

Analyst Q&A

• Q: On guidance of EUR 25 billion total income, what type of assumption on growth?

  A: Assumed 5% volume growth, but Q4 shows more growth, and replication momentum continues to accrete.

• Q: On liability margin assumptions in 2027?

  A: No specific outlook given but replication on Page 30 continues to accrete in 2026 and 2027.

• Q: On Wholesale Banking risk-weighted assets growth plan?

  A: Continue to do SRTs, expect positive impact on CET1 of 15 - 20 basis points in 2026 and beyond.

• Q: On loans vs deposit growth?

  A: Long term want balanced growth, 1 year can have loan growth higher, balance sheet will be balanced over longer period.

• Q: On costs and incidentals?

  A: Continue to work on cost discipline, incidentals should be smaller going forward, and positive jaw expected to continue.

• Q: On M&A?

  A: Will look at M&A to accelerate growth if it fits, add scale and diversification, and be accretive to shareholders.

• Q: On AI and tech investments?

  A: See benefits from AI in various areas like onboarding, approvals, customer lending without manual intervention, and will continue to invest in AI and tech with reskilling of staff.

• Q: On deposit campaigns?

  A: Continue to have deposit campaigns, make them more bespoke and data-driven.

• Q: On business banking rollout in Germany?

  A: Germany has good growth in business banking customers, deposits from business banking customers, and it will become a sizable business over time.

• Q: On FTEs and '27 and '28?

  A: Expect FTE over balances to fall as focus on growth with less marginal cost through digitalization and AI.

• Q: On lending volume growth in 2026?

  A: Good growth across board with macroeconomic fundamentals like shortage of housing supporting mortgage growth, and pipelines are good.

• Q: On EUR 25 billion target for 2027?

  A: Confident about growth and '27 target, focus on return in Wholesale Banking.

• Q: On hedging tailwinds and quarterly pattern?

  A: Hedging tailwinds due to combination of factors like short end pressure decreasing, rate cuts materializing, and 55% of long end positive.

• Q: On working capital lending and deposits?

  A: Working capital lending in wholesale due to large deals, seasonal pattern, and not necessarily linked to deposit changes with lower margins but not big impact on lending margin