ING Group Q4 Earnings Call Highlights

ING Group (NYSE:ING) used its fourth-quarter 2025 fixed income call to highlight strong commercial momentum in 2025, provide updated income and efficiency targets for 2026 and 2027, and outline capital, liquidity, and debt issuance plans for the coming year. Group Treasurer Jaap Kes and Head of Investor Relations Sjoerd Miltenburg led the discussion, pointing to customer growth, higher fee income, and continued capital generation alongside a stable funding profile.

Customer growth and balance sheet expansion in 2025

Miltenburg said ING delivered “outstanding commercial growth” in 2025, including more than 350,000 Mobile Primary Customers added during the fourth quarter. Total growth for the year exceeded 1 million, which management said was fully in line with targets set at the company’s Capital Markets Day.

ING also reported balance sheet growth above its stated targets. The loan book grew 8.3% in 2025, driven mainly by residential mortgages, while deposits increased 5.5%, primarily from retail banking customers. Miltenburg added that fee income rose 15% year over year, supported by customer growth and cross-selling.

On sustainability activity, Miltenburg said total sustainable volume mobilized reached EUR 166 billion in 2025, a 28% increase from the prior year, and reiterated ING’s commitment to supporting client sustainability transitions.

Income performance and operational efficiency actions

Despite a lower interest rate environment, ING’s commercial net interest income (NII) remained “very strong” at EUR 15.3 billion for 2025, according to Miltenburg. He attributed the performance to customer balance growth, disciplined repricing, and a “prudent deposit hedging strategy.”

Fee income growth was broad-based, and investment products were singled out as a particularly strong contributor. Miltenburg said fee income from investment products increased 21%, supported by growth in customer numbers, assets under management, and trading activity. Total income reached a record level for the third consecutive year, he said.

Management also pointed to initiatives aimed at improving operational leverage. Miltenburg cited efforts to reduce “friction” in key customer journeys by increasing the share handled without manual intervention and said the company introduced a chatbot in seven retail markets, generating annual savings and improving customer response times. He added that net promoter score (NPS) positions remained strong, with ING holding the number one position in five out of ten retail markets and ranking in the top three across all markets.

Miltenburg said these scalability efforts are translating into improved efficiency, noting the FTE-over-customer-balance ratio has improved by more than 7% since 2023.

Capital generation, distributions, and asset quality

Miltenburg said ING generated more than EUR 6.3 billion in net profit over the year, contributing almost two percentage points to the CET1 ratio. He added that risk-weighted asset (RWA) consumption was limited, with roughly 15% of net profit consumed by RWA growth in 2025. He also referenced the company’s “modest use” of significant risk transfer (SRT) transactions to optimize capital efficiency in Wholesale Banking, with the first two transactions completed in November.

Kes later said RWAs increased by EUR 4.5 billion in the fourth quarter, driven by business growth—particularly mortgages—and higher operational risk RWAs due to an update of the SMA model. He said the two Wholesale Banking SRT transactions provided first-loss protection on diversified corporate loan portfolios with total notional exposure of EUR 10.5 billion, contributing around 12 basis points to the fourth-quarter 2025 CET1 ratio.

On capital ratios, Kes said the CET1 ratio decreased to 13.1% as an additional distribution of EUR 1.6 billion announced in the prior quarter was fully deducted in the fourth quarter. He said the cash component of the additional distribution was paid in January and that the ongoing share buyback was “progressing well,” with almost half completed. ING also proposed a final cash dividend over 2025 of around 74 cents per ordinary share, subject to approval at the April 2026 annual general meeting.

On credit quality, Miltenburg reported total risk costs of EUR 365 million in the quarter, equivalent to 20 basis points of average customer lending and in line with ING’s through-the-cycle average. Net additions to Stage Three provisions were EUR 389 million, mainly reflecting individual Stage Three provisioning for new and existing files in Wholesale Banking, partly offset by releases tied to repayments, secondary market sales, and “structural improvements.” For Stage One and Stage Two, ING recorded a net release of EUR 24 million, which Miltenburg said reflected a partial release of management overlays and updated macroeconomic forecasts.

Outlook targets for 2026 and 2027

For 2026, management expects total income to grow to around EUR 24 billion, supported by continued volume growth and fee income growth of 5% to 10%. Operating expenses (excluding incidentals) are projected at EUR 12.6 billion to EUR 12.8 billion, with return on tangible equity (ROTE) expected to increase from 13.6% to more than 14%.

For 2027, ING expects total income to exceed EUR 25 billion, described as the upper end of its previous target range, and raised its fee income goal to exceed EUR 5 billion. Operating expenses (excluding incidentals) are expected to be around EUR 13 billion, translating into a return on tangible equity of more than 15%.

Miltenburg said income planning assumptions include customer balance growth of around 5% per year, a liability margin at the lower end of ING’s 100 to 110 basis point range, stable lending margins compared with the fourth quarter, “all other income” around EUR 2.8 billion (excluding incidentals), and fees growing 5% to 10%.

Funding, MREL/TLAC position, and 2026 issuance plans

Kes said ING is comfortably meeting its TLAC and MREL requirements with “sizable buffers,” though RWA-based MREL is the binding constraint for management purposes. He cited a roughly 2.5% delta between year-end 2025 actuals and 2026 requirements, representing a buffer of almost EUR 12 billion. To maintain that buffer, he said the company will need to access markets in 2026.

For 2026 issuance, Kes provided the following guidance:

• Holdco Senior: around EUR 6 billion to EUR 8 billion, in line with 2025
• AT1 and Tier 2: issuance driven by replacement needs and/or RWA growth; current ratios cited at 2.2% (AT1) and 3.1% (Tier 2)
• Opco senior: no significant issuance expected aside from potential local issuance in Australia, though this could change based on balance sheet developments
• Secured issuance: EUR 6 billion to EUR 8 billion across issuance entities, including RMBS

Kes also addressed market discussion around par call options, noting peers have increasingly called instruments at the beginning of call windows rather than at the first reset date. He said ING’s capital planning and “economic call policy” are based on the first reset date, and instruments with par call features have been priced, booked, and hedged accordingly. ING’s first Tier 2 instrument with a three-month par call option enters its call window in February, and Kes emphasized that not calling on the first day of the window should not be interpreted as a non-call event.

On liquidity and funding, Kes described ING’s liquidity profile as stable, with more than two-thirds of the balance sheet funded by customer deposits, mainly retail. He cited customer deposit growth of 4.5% in 2025, driven by customer acquisition and promotional campaigns, including in Germany. Kes also reported a liquidity coverage ratio (LCR) of 140% and said the company maintains “large pools” of ECB-eligible assets, including retained covered bonds, retained securitizations, and credit claims.

During the Q&A, one analyst asked about potential use of ECB operations such as MROs and LTROs as excess liquidity declines. Kes said ING does not want to rely on central bank operations structurally and aims to be self-sufficient, but added there can be economic reasons to participate, including favorable pricing or specific programs supporting the economy. He also said ING does not believe there is a stigma anymore attached to using such facilities.

About ING Group (NYSE:ING)

ING Group N.V. is a Dutch multinational financial services company headquartered in Amsterdam. Formed through the consolidation of Dutch financial businesses, ING operates as a banking and financial services group that serves retail, small and medium-sized enterprises, large corporates and institutional clients. The company is organized under a two-tier governance model common in the Netherlands, with an Executive Board responsible for day-to-day management and a Supervisory Board providing oversight.

ING’s principal activities include retail and direct banking, commercial and wholesale banking, corporate lending, transaction services and cash management, and a range of investment and savings products.