ING Groep N.V. Q3 FY2025 earnings call

• Capital Allocation: Strong commercial momentum fuels growth, with capital generated from commercial growth, income diversification, and cost measures. Deployed capital to support shareholder returns, including share buybacks and cash dividends.
• CET1 Ratio Target: Revised CET1 ratio target to around 13% due to regulatory changes, providing a buffer above the MDA threshold.
• Shareholder Returns: Announced EUR 1.6 billion distribution, including EUR 1.1 billion share buyback and EUR 500 million cash dividend in January 2026.
• Business Growth: Added nearly 700,000 mobile primary customers, on track for 1 million annual growth. Fee growth revised higher, total income outlook increased. Focus on prudent expense management with operational efficiencies and digitalization, including GenAI integration.

Retail Banking: Added nearly 200,000 mobile primary customers in the quarter, with net core lending growth of EUR 8.6 billion driven mainly by residential mortgages. Core deposits declined slightly due to promotional campaigns and seasonal spending. Wholesale Banking: Delivered a strong quarter supported by trade finance services and lending, with strong deposit inflows in payments, cash management, financial markets, and cash pooling. Loan book expanded significantly. Customer balances: Grew at an annualized rate of 7% in the first 9 months of 2025, on track to achieve the 4% annual growth target. Fee income: Continued an upward trend, with year-to-date growth of 12% and full-year 2025 outlook raised to over 10%. ROE: Fourth quarter rolling average ROE stands at 12.6%, with full-year ROE outlook revised upwards. Sustainable finance: Volumes up 29% compared to the same period last year.

• 2025 outlook: Added nearly 700,000 mobile primary customers, fee growth expected over 10%, total income outlook around EUR 22.8 billion, ROE expectation over 12.5%.
• CET1 target: Revised to around 13%, with capital above target returned to shareholders.
• Future updates: Provide first quarter 2026 results update.

• Regulatory Changes: Impact on CET1 requirements.
• Macroeconomic/Geopolitical Uncertainty: Potential impact on business performance.
• Deposit Outflows: Seasonal and campaign-related outflows in Retail Banking, offset by Wholesale Banking inflows.
• Credit Risk: Stage 3 provisions in Wholesale Banking, but risk cost below through-the-cycle average.

Q: On capital, CET1 requirements, deposits, and Q4 trends A: Steven van Rijswijk addressed capital pressure, noting no additional immediate pressure, discussed deposit outflows (Retail outflows due to campaigns and seasonality, offset by Wholesale inflows), and Q4 expectations Q: On lending margins, AI initiatives, M&A A: Tanate Phutrakul and Steven van Rijswijk responded on lending margin outlook, AI integration across markets, and M&A strategy focusing on relevant market segments Q: On NII, fees, CET1 target A: Tanate Phutrakul commented on NII guidance, fee growth confidence, and CET1 target implications Q: On Board appointments, FTEs, NII dynamics A: Steven van Rijswijk discussed Board appointment reasonings and skill sets, Seamus Murphy's questions on FTEs and NII dynamics were addressed with focus on growth and efficiency