ING Group Aktie

Good morning. This is Laura welcoming you to ING's 1Q 2026 Conference Call. Before handing this conference call over to Steven J. van Rijswijk, Chief Executive Officer of ING Group, let me first say that today's comments may include forward-looking statements such as statements regarding future developments in our business, expectations for our future financial performance and any statement not involving a historical fact.

Actual results may differ materially from those projected in any forward-looking statements. A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission and our earnings press release as posted on our website today.

Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities.

Good morning, Steven, over to you.

Thank you very much, Laura, and good morning, and welcome to our results call for the first quarter of 2026. I hope that you're all doing well, and thank you for joining us today. Sitting next to me is our new CFO, Ida Lerner. Ida joined us on the 1st of April, and we're very happy to have her on Board. Welcome, Ida. And next to Ida, I'm also joined today by our Head of Risk, Andrea Cesaroni.

We have started the year strongly. The first quarter of 2026 unfolded against the backdrop of geopolitical and macroeconomic uncertainty. However, our performance demonstrates once again the resilience of our business and of our clients. And we have continued to deliver strong and diversified growth, and we're well on track to achieve our full year financial outlook. In today's presentation, I will talk about the resilience of our growth strategy and how the consistent execution thereof is delivering increasing value. After that, Ida will walk you through the quarterly financials. And at the end of the call, we will be happy to take your questions.

And with that, we now start on Slide 2. This slide highlights our continued commercial momentum going into '26 with solid growth across all key areas. And as you will remember, we had ended 2025 with very strong volumes, including some seasonal inflows. And we have managed to maintain that strong positive momentum also across the first quarter, more than absorbing the seasonal effects and continuing to push volumes even further up.

Mobile primary customer growth, for instance, is seasonally lower in the first quarter. However, we managed to grow by another 125,000, and we continue to be on track to achieve our 1 million growth target also entering '26. Loan growth was again strong at an annualized pace of more than 8%. In retail banking, we've grown by 9.4% in the first quarter. And besides continued momentum in mortgages, we also saw strong growth in business banking, where we continue to expand the franchise.

In Wholesale Banking, we grew the loan book by EUR 5.6 billion, while keeping its risk-weighted assets broadly stable. We also saw solid inflow in deposits at an annualized rate of 4% despite seasonal outflows from current accounts in the first quarter and despite conversion into investment products. Fee income rose by 13% year-on-year, supported by our growing customer base, by higher customer trading volumes and by strong deal flow in Wholesale Banking. And all of this translated into a return on tangible equity of 13.6% for the quarter. And finally, our sustainable volume mobilized has increased by 11% year-on-year as we continue to support our clients in their sustainable transitions.

Now let's move on to the next slide to take a closer look at the fundamentals of our continued commercial growth. Slide 3 summarizes how the resilience of our business supports our growth strategy also in a more challenging environment. And let me start by saying that the main driver of ING's commercial growth is the superior experience that we provide to our customers. With a leading Net Promoter Score in most of our retail markets, we continue to attract new customers, and we see even stronger growth in the conversion into mobile primary relationships as more customers choose ING as their primary bank. And this deepening of the relationship with our customers is furthermore supported by the broadening of our product offering.

And here, we see strong momentum across all of our businesses, helping to further diversify our revenues across a growing range of capabilities. We've recently launched business banking in Italy. And in the Netherlands, we are rolling out an insurance broker model to further integrate insurance capabilities into our mobile app. We are achieving most of our lending growth in mortgages. And as the leading European mortgage bank, we benefit from continued strong market fundamentals. The strength of our largest mortgage market is supported by constant low unemployment rates and a resilient market outlook.

And our Wholesale Bank is well positioned to support Europe's strategic resilience with deep expertise in key focus areas, including in infrastructure and TMT and as a top 3 MLA and book runner in Europe and with our strong DCM franchise. Our Wholesale Bank is ready to support the investment initiatives that are needed to strengthen Europe's position in the global context.

And with that, we move to Slide 4. And on this slide, you can see how the consistent execution of our strategy is driving value, supported by rising profitability and by our consistent deployment of share buyback programs. Our EPS has improved by 11% on a 12-month rolling basis. And with EPS and return on tangible equity clearly on a rising path, we have set firm direction towards our profitability targets by 2027.

We see a wide range of strong catalysts that will support further value creation. First of all, we continue to grow our mobile primary customer base by 1 million per year. And this means that we're not just growing the number of accounts, this is growth from customers who actually use ING as their primary bank. And this is the core engine of our growth strategy. This is where our growth, income diversification and superior cost to serve, all come together.

In addition, as number two, we continue to expand our business and develop new business streams. We are further rolling out our successful business banking franchise into several countries. We're building our Private Banking and Wealth Management as a third retail banking pillar in our existing markets. We're continuously developing new insurance propositions to make insurance a relevant revenue stream. And in Wholesale Banking, we're making strong progress to further diversify our capabilities in capital-light revenues.

And thirdly, when it comes to growth, growth becomes powerful only when it is truly scalable. And our continued focus on operational excellence is increasingly enabling us to achieve growth in a truly scalable way. Combined with our capabilities to scale AI solutions quickly, we see a powerful improvement in growing commercial value and volumes at a much faster pace than our cost base.

And finally, number four, we continue to improve our already strong level of capital efficiency, supported by continued capital velocity measures, both in Wholesale Banking and in Retail Banking. And all of this is not a journey that we will start tomorrow or in the years to come, but one that is already well underway and one where we see its strong results already clearly today.

Now let's zoom in for a minute on that topic of scalability, moving to Slide 5. On Slide 5, we demonstrate how we're increasingly enabling scalable growth. And first, I want to touch upon what drives our ability to achieve scalable growth. Now ING has a long track record of digitalization. And as a result, the vast majority of our key customer journeys are already fully straight through without any human intervention, and this is a key ingredient, not only for superior customer experience, but also for achieving through cost efficiency.

And in addition to a high level of digitalization, we also have built strong foundational capabilities that enable scalability. For example, we have our global hubs network and that houses 27% of our tech employees and 40% of our operational workforce and a fully integrated and scalable network organization supports improved productivity and operational resilience, but also our scalable tech platform, which includes core infrastructure components such as our global private cloud and our global technology platform that provides reusable shared services for product development.

And when you add these 2 ingredients together, digitalization and a scalable tech and operations organization, then you have a very strong starting point to deploy AI solutions. And that is why we have been able to already roll out many AI solutions at scale quickly. More than 90%, 9-0 percent, of our AI pilots have successfully been moved into production. More than 75% of our customer checks are fully resolved by AI without human support. More than 7 million customers have already received hyper-personalized marketing campaigns with agentic mortgages live in production in the Netherlands and soon rolling out to other countries. And we are on the verge of globally rolling out conversational banking for our retail customers, which is a personal assistant with agentic experience.

Now then when you then look back cost performance over the past 12 months and in comparison to our commercial growth, there you then see the powerful proof of our ability to achieve scalable growth. Because over the past 12 months, we have grown our mobile primary customer base by almost 7%, our customer balances by more than 5%, our volumes in investment products by more than 15% and fee income even by 15.6%. But our FTEs, however, decreased by 0.6%, while our cost growth was limited to 2%. And with our commercial growth significantly outpacing incremental costs, we are delivering clear scalable growth, supporting meaningful improvements of our efficiency ratios in the years to come.

Now let's move to Slide 6. On Slide 6, we show how the consistent execution of our growth strategy is resulting in strong capital generation. Over the past 12 months, we have delivered EUR 6.4 billion in net profit, contributing almost 2 percentage points of our CET1 ratio. And of that EUR 6.4 billion, 50% has been reserved for our regular dividend distributions. Around 15% of the capital we generated has been used to fund profitable growth across our markets. And here, we see a clear demonstration of capital efficiency.

We have generated EUR 65 billion of profitable lending growth over the past 12 months while consuming only EUR 1 billion of capital. And finally, the generated capital that was not needed for organic growth, we have returned to shareholders, with a total amount of EUR 4.4 billion of additional distributions over the past 12 months, largely in the form of share buybacks.

Now let's move to Slide 7, where I will show how these distributions have resulted in continued attractive shareholder return. In line with our distribution policy, Page 7, we have consistently paid cash dividends, and we have been executing significant share buyback programs for several years. And together, this results in consistent and attractive total distributions per share. The previously announced share buyback of EUR 1.1 billion has been completed this week. And today, we have already started with another EUR 1 billion share buyback program, which will run for the next 6 months. And when we look ahead, we remain fully committed to strong capital discipline to deliver strong shareholder results, and we maintain our semiannual rhythm of assessing the potential for additional distributions, and we will update you again in 6 months' time.

Now before handing over to Ida, let me first take you to Slide 9. And on Slide 9, we confirm our financial outlook for '26 and 2027. We're well on track to achieve our upgraded outlook, which we communicated in the previous quarter with our full year results. We continue to add 1 million mobile primary customers per year. We see continued momentum in building out our fee income. We will deliver positive operating jaws in the years to come, and we are delivering on a broad range of catalysts that will continue to support the upper part of our RoTE in the years to come as well.

Now let me hand over to Ida, who will walk you through our first quarter results in more detail, starting from Slide 11.

Thank you, Steven. It is my pleasure to present the results of what has been a very strong first quarter of 2026. On Slide 11, we can see that commercial NII has continued its upward trend since the second half of 2025. This is supported by continued volume growth on both sides of the balance sheet by disciplined commercial pricing and by the hedging tailwind on our replicated customer deposits. Fee income also continued its upward trend, driven by further customer growth and by strong performance, particularly in investment products and in Wholesale Banking.

All other income, on the other hand, was affected by the heightened market volatility towards the end of the quarter. This has resulted in some IFRS asymmetrical effects, of which the majority should come back over time given lower interest rate volatility ahead. Overall, the strong customer activity and volume growth noted in the first quarter outweighed the lower all other income and led to an uptick in total income of 3% compared to the same quarter last year.

Let's now move to Slide 12, where we will show the development of our customer balances. As you can see, we delivered another quarter of strong commercial growth across both Retail Banking and Wholesale Banking. Net core lending increased by EUR 15 billion. Retail Banking contributed EUR 9.4 billion, driven by continued mortgage growth with strong production in the Netherlands, Germany, Italy and Australia. This was coupled with a particularly strong performance in Business Banking, mainly in Netherlands and Poland.

Wholesale Banking also delivered strong growth of EUR 5.6 billion, while keeping risk-weighted assets broadly stable. Within this growth of EUR 5.6 billion, we see a strong net inflow of EUR 7.8 billion in lending, which was partly offset by the repayment of a short-term working capital solution facility.

On the liability side, core deposits increased by EUR 7.2 billion. Retail Banking contributed EUR 4.3 billion of growth with strong inflows into savings and term deposits, most notably in Poland, Belgium and the Netherlands. This more than offset the seasonal outflow from current accounts and the conversion into investment products. Wholesale Banking added EUR 2.9 billion of customer deposit as it continues to build out its capital-light income capabilities.

On to Slide 13. On this slide, we zoom in on commercial NII. Commercial NII grew by EUR 132 million quarter-on-quarter and was 7% higher than last year. Lending NII was up EUR 41 million in the first quarter despite a lower day count driven by sustained volume growth at stable margins. Liability NII increased by EUR 91 million quarter-on-quarter, reflecting both volume growth and a 5 basis points increase in the liability margin. This higher liability margin is a reflection of the prolonged hedging tailwind on our replicated deposits while maintaining disciplined commercial pricing across the back book of our deposits.

What it also reflects is the absence of larger savings campaigns during the first quarter, meaning that the level of acquisition costs was relatively low this quarter and will likely normalize again in the coming quarters. As such, let me be clear that we should not expect a 5 basis points increase of the liability margin every quarter ahead. Looking ahead, on the back of a very strong first quarter and especially the higher-than-expected volume growth, we can expect a slightly higher level of commercial NII than previously guided. We now expect commercial NII for the full year to be between EUR 16.5 billion and EUR 16.7 billion.

Turning to Slide 14. Fee income growth remained strong, increasing 13% year-on-year and was also up on the prior quarter. What is especially encouraging to see is that this strong performance of fee income stems from all products and all markets, supporting the diversification of income sources for the bank. In Retail Banking, fee income grew by 13% year-on-year. This was mainly driven by structural factors, such as continued customer growth and improved cross-selling.

Investment products, in particular, performed very well, a record quarter even benefiting from 8% growth in customers with an investment account and 15% growth in assets under management and administration, of which roughly half comes from net inflows, while also benefiting from 13% more trades, which besides a higher customer base, was supported by the increased market volatility towards the end of the quarter. In Wholesale Banking, fee income grew by 11% year-on-year, again demonstrating its strong progress on further income diversification.

Let's turn to the next slide. On Slide 15, we show the development of all other income. Here, we see that the heightened market volatility towards the end of the quarter had a negative effect on hedge ineffectiveness as well as our activities within financial markets. It's worth remembering, however, that the P&L impact from the hedge ineffectiveness is not economic in nature. It is account-driven and should reverse over time.

In Financial Markets, we continue to support our clients through the volatile market conditions. However, all other income was impacted by the sharp increase in interest rates. Overall, we expect all other income for the full year to be slightly lower than our normal run rate, ending somewhere between EUR 2.5 billion and EUR 2.7 billion.

Next, Slide 16. Expenses, excluding regulatory costs and incidental items showed only a moderate increase year-on-year of 1.1%, clearly demonstrating our disciplined approach to cost management and our scalable growth capabilities. The impact from wage inflation was largely offset by savings from prior restructurings while allowing for ongoing investments to support business growth. Quarter-on-quarter, expenses were down slightly, mainly driven by seasonally lower customer acquisition costs in the first quarter.

Incidental items of EUR 13 million for the quarter included EUR 25 million of restructuring provisions for the full-time employee reduction in Wholesale Banking and in Retail Banking Belgium. Once fully implemented, these measures are expected to lead to approximately EUR 20 million in annualized cost savings.

Now let's move to risk costs on Slide 17. Total risk costs were EUR 346 million in the quarter, equivalent to 19 basis points of average customer lending, which is slightly below our through-the-cycle average, reflecting the quality and the strength of our loan book. Within this quarter's risk cost, we have included a prudent overlay to address the possible impact of higher energy prices and of the broader economic effects of the war in the Middle East. This EUR 94 million addition to management overlays was, however, partly offset by a large repayment of a Stage 3 loan in Wholesale Banking. The Stage 3 ratio slightly improved to a low 1.5%. Overall, we remain confident in the strength and quality of our loan book.

And finally, before handing it back to Steven, let me take you to Slide 18. On Slide 18, we show the development of our core equity Tier 1 ratio. Continued strong capital generation and overall solidity allowed us to announce and start a new EUR 1 billion share buyback program today while maintaining our core equity Tier 1 at our around 13% target level. In terms of risk-weighted assets for the quarter, these increased by EUR 3.6 billion. Besides a EUR 0.9 billion FX impact, this mainly reflected continued business growth.

Within Wholesale Banking, the risk-weighted assets remained broadly stable despite strong lending growth, reflecting the continued capital velocity measures that have been taken within Wholesale Banking. What is new this quarter is the change in our dividend reserving approach to ensure compliance with EBA guidelines. As of this quarter, our additional distributions will mainly be financed through upfront reserving. The implementation of this new reserving approach had a one-off effect this quarter of minus 23 basis points. In total, the additional distribution has an impact of roughly 29 basis points on our core equity Tier 1. This is merely a change in reserving approach. Our distribution policy remains unchanged.

And with that, let me hand it back to Steven to wrap up today's presentation.

Very good. Thank you, Ida. And before we move to Q&A, let me recap the key takeaways from today's presentation. The resilience of our business supports the continued execution of our growth strategy also amidst geopolitical uncertainty. The consistent execution of that growth strategy is clearly driving value with strong momentum in our profitability metrics, and we have a right range of catalysts to further increase value.

Our commercial growth is significantly outpacing the growth in expenses, reflecting our strong foundational capabilities to achieve scalable growth. And as a result, we see continued strong capital generation, which enabled us to start a new EUR 1 billion share buyback program today. And finally, we are well on track to deliver on our full year financial outlook.

And with that, I would like to open the floor for Q&A. Operator, back to you.

[Operator Instructions]

We will now take our first question from Benoit Batra of Kepler Cheuvreux.

Welcome, Ida, and looking forward to talk to you in the coming days. So yes, two questions on my side. The first one will be on the liability margin, the 104 bps. Clearly, we should not replicate the plus 5 bps quarter-on-quarter. But objectively, looking into the second quarter, yes, it looks like there's further support from the short end of the curve. So I wanted to confirm that with you, if you see that as well. And could you please also talk about the competitive environment on the deposit side so far in the month of April? While it seems to be still okay, so I just wanted to get a bit of a feeling about how deposit pricing behave in your main markets so far in the second quarter.

And then the second question, yes, sorry, I will just talk about a bit more like the strategy on the insurance because it's interesting what you've done. I think what you announced 2 weeks ago, you will be mandated broker in the Netherlands for NN and Allianz. So what is your strategy now on the insurance? It seems that things will probably speed up in terms of growth there. Just wanted to understand your long-term plan regarding insurance. And clearly, with this move into mandated broker, I think you are stepping up in the value chain of insurance, which probably could accelerate the growth there. So yes, the long-term picture on insurance, please.

Thanks, Benoit, for your questions. And I'll take the question on insurance, and Ida will talk about the liability margin. Look, in insurance, it's a little bit the same as we saw on investment products. So I think a couple of years ago, we started to talk again to our insurance partners to look at, okay, what is the best proposition for which market, for which customer segments and how does each market develop itself.

And it comes a bit back to what I said previously, which is we have been very dependent on interest income, whether it was deposits or lending. And there's nothing wrong with these two products. But in the end, we want to build up a broader client relationship when growing our primary relationships across the board. And in that regard, we have also started to do that with insurance. I think a few quarters ago, we started to report on that separately. Every market works a bit differently. So in some markets, we have one partner. In this market, we work more with a platform model, whereby insurance partners can subscribe to certain products. And increasingly, we're also moving up the value chain.

In some of the markets, the insurance fees are still very low, like I said in the past about investment business that I said, the assets under management business compared to other banks that are smaller than us is still relatively benign, that also goes for insurance. So in my view, we have just nearly started. It is getting better. We've seen that the growth was, I believe, 14% compared to a year ago. This is good, but we're still rolling out in more markets. We're hiring people and specialists, and we are maturing and also the way we provide insurance, and that could indeed also be taking over some more services. We currently don't think about taking over underwriting services, but we really tailor it in each market where we're at, and there's quite a bit of upside from where we currently are.

Thank you for your question on liability margin as well as on competition. I think I'll start with the competition on deposits. I think it's important to say that we see strong but rational competition, both on deposits, but also on lending in all our main markets. When looking particularly at the first quarter, that's seasonally a lower quarter when it comes to deposits. If you compare it year-over-year, you need to also keep in mind that in the first quarter last year, we did a larger campaign in Germany, which meant that we have a stronger inflow of deposits.

We still see that we have an attractive offering towards our customers, and we continue to balance profitability above growth -- around growth and ensure that we have a sustainable development also on deposits in line with what we've guided on in terms of an average growth of 5%, where we think it would be natural to see a deposit growth.

On the liability margin, it's good that you point out that we should not expect a 5 basis points increase on the liability margin every quarter. And what I think is important to say is that we expect to be in the mid-range of between 100 and 110 basis points this year, also driven by a hedging tailwind, which comes in gradually, but not exactly linear and particularly a reflection of the lower-than-usual campaign-related deposit cost in the first quarter. So that's also something that needs to be taken into account when looking at the liability margin ahead.

And we'll now take our next question from Chris Hallam of Goldman Sachs.

Two questions. The first one, I see you've introduced on Slide 27 that bullet point on the right-hand side to say the range of 100 basis points to 110 basis points could be temporarily exceeded. And I just wanted to ask more conceptually how do you think about that opportunity. So on the one hand, you could pay up to sort of source additional deposits essentially sacrificing margin for volume and hoping maybe find the demand on the lending side to put that additional liquidity to work given you typically run about 100% LDR. But obviously, that ties up more capital and it brings in a bit more credit risk.

Now on the other hand, you can allow volumes to react to your determined pass-through rates and just ride the tide of higher rates and underlying volume growth in your markets. You wouldn't grow deposits by as much, but it's a higher ROE and a lower credit risk strategy. I guess from the outside-in, that's a pretty easy decision to make, but I'd just be interested to see and hear how you see the balance between those two strategies?

And then second, of the EUR 600 million increase in replicating income in 2026 again on Slide 27, I know that's a gross number, but how much is included in the new commercial NII guidance? And the haircut you're taking in deciding how much of that EUR 600 million to embed in the new guide? Is that because you're waiting to see where rates really settle this year? Obviously, there's a huge amount of volatility, or because you actually see more price competition coming through on deposits and there being a bigger difference between the gross and the net number?

All right. So the second question I read as -- or I heard is that we gave commercial NII guidance of plus EUR 200 million and how much is for more liabilities? Is that the right understanding, Chris?

Effectively your replicating income guidance for 2026 has gone up by EUR 600 million. Your commercial NII guidance gone up by EUR 200 million. The replicating income number there is gross. So it could be high deposit cost or it could just be you using the latest forward curve on that replicating income slide. You don't want to put the latest forward curve into commercial NII guidance.

So basically, I'll take the second question and Ida takes the first question. So I think on the EUR 200 million, that is basically all -- the increase is all liability income. I think that if you look at the liability income that's growing both on the volume and of course, on the margin that we make and on the average duration and therefore, the curves that we see. Now clearly, we have been moving up our deposits with EUR 7 billion, that is in line with what we typically would do for the year. And sometimes we have campaigns and it goes a bit quicker, but also comes at lower margin. Now we didn't do campaigns. And if you strip out the campaigns, we are still at what we typically do in a quarter.

And of course, the margin is supported by a higher short-term interest rate that helps our current accounts. Of course, we're also helped in this case by the higher forward curve that also will help savings margins. But in the end, what we see in the past from competition, that always trends back to a certain level. But based on what we currently have seen and have done to date, this is the increase in liability income we expect in commercial NII for 2026. So it has nothing to do with lending or lending margins. It's just a matter of the volumes that we expect at higher margins and a better replication rate.

I think it's important to say that the Slide 27, which I think you're referring to, is a visualization of what we would see bearing in mind a specific forward curve. And that's also the forward curve that we saw in March. That has been quite volatile, as you know, during the quarter. As Steven also alluded to, some of the benefit from higher short-term rates is from current account volumes and therefore, structurally accretive to NII.

However, most of the benefit for us comes from the savings volumes, which is more sensitive to competition and historically has shown that the margins are fairly stable over time and is expected to also come down. And I would link that to the range of 100 basis points and 110 basis points in terms of the long-term perspective.

Taking purely the forward curve from March into account, you would say that, yes, we would potentially be higher than 100 basis points and 110 basis points. But we also know that there is a fierce competition. There's also a very rational behavior in the bank, focusing on profitability above growth over time. You had also asked about the composition in terms of lending, will we prioritize lending over deposits? I think we've said that our long-term goal is to grow approximately equal by 5% on both sides of the balance sheet.

And we will now take our next question from Giulia Aurora of Morgan Stanley.

I have two. So the first one, the commercial momentum was very strong in Q1. And Steven, you called out momentum in mortgages, also growth in business banking. How is this evolving now considering the change in the macro backdrop? So are you still seeing good demand for loans or has that slowed down? First question.

Second question, on cost of risk, the EUR 94 million overlay, what oil price do you assume there? And could we see more coming in Q2 considering how things are evolving literally as we speak?

All right, Giulia. Thanks for your question. I'll take the question on commercial momentum, and Andrea will take the question on the EUR 94 million overlay. So on the commercial momentum, look, there's many elements that we anticipate to continue, and there are some elements where we could expect and could see an impact. If you look at the lending and the deposit space, I think a large part of our loans is in mortgages, and there the main drivers are unemployment rates and housing shortages, and that hasn't really changed.

And we've seen it also in previous cycles, maybe except when rates increase very, very quickly as we've seen in the course of '22 and '23, then there was a little bit a bump in the housing demand. But other than that, we have actually seen a continued rise in demand for mortgages, given the fact that there is a housing shortage and there is low unemployment rates. So that's an important element to it.

When we look at fees, many of our fee growth is alpha driven. That's just having more customers doing more with us and driving more impact and relevance in the markets where we are. And I just talked also to the question to Benoit about, okay, rolling out new insurance propositions, rolling out broader investment propositions, having deeper payment capabilities in various markets, deepening our financial markets capabilities in terms of pricing for certain products. So it's just enabling ourselves because we have these customers to do more with them. And that I don't see change either.

I think the biggest impact that we could potentially see, but it's too early to call, is that when we look at the lending demand in Wholesale Banking. And there, we've seen in the second half of last year, quite a pent-up demand after the pipelines were full in the first half, but didn't really convert based on the uncertainty, given liberation day that then convert in the second half and that we see continue in the first quarter. But with all the uncertainty going on, yes, that could be more muted in the quarters to come, but let's see what happens. That's what I could see at this point in time.

Andrea, on the overlay.

Yes. Okay. So the primary purpose of the overlay, which we built was indeed to adjust the quarter end macroeconomic scenarios, which feeds into our Credit Suisse estimates, to reflect the potential deterioration linked to the ongoing escalation in the Middle East. And let's say, from the coming quarter -- but let's say, consider a wider set of assumptions and macroeconomic variables than the pure oil price. From the coming quarter, we expect to revert to the normal process, whereby macroeconomic consensus is feeding naturally into our loan loss provisioning process.

And therefore, this overlay should diminish, while the net impact on the loan loss provisions will be actually depending on how the, let's say, higher oil price will affect the macroeconomic outlook, I would say. So in a nutshell, let's say, this is the setup. It's to us to come to a conclusion about the potential impact of the current oil price volatility on our loan loss provisions.

And we will now take our next question from Delphine Lee of JPMorgan.

So my first one is, sorry, just to come back on the liability margins and your comment about exceeding temporarily in outer years. So just to understand, when you say temporarily, just to understand like you do think that there will be a significant change in competition, which you're saying at the moment is rational, but the new players and newcomers could really trigger potential change. Do you think this would be sudden or just to kind of like understand sort of how quickly that could bring down liability margin back into the long-term range of 100 basis points, 110 basis points?

Second question is on capital. Just wanted to get your thoughts around like the change on the mortgage floor in terms of the impact that you have on your CET1 ratio and your distribution policy. You want to run around 13%. So seeing a bit of a positive impact, would that change how much you distribute in terms of buybacks?

Thank you very much. I'll take the question on capital, and Ida will take the question on liability margins. When we look at the mortgage floor, and what happened is that it was recently announced also by the DNB that they took a decision and as a result of which the Dutch mortgage floor expires as per the 1st of December 2026. And that decision will lead to a EUR 4 billion lower risk-weighted assets. So that's about 15 basis points of our CET1 ratio.

And look like we've previously said, we are looking at a target of around 13%. We use our capital for growth and for normal distribution. And if there is any structural amount over that around 13% that we have in capital, then we'll pay it back to shareholders. And so we'll treat it any -- in the same way as we normally do.

Thank you for the question on liability margin. Well, first, I think it's important to look at the composition of our portfolio as well and also link it back to what we saw in 2023. In 2023, we saw a rapid increase in terms of margins, which then came down gradually over time as there is quite strong competition. I think it's also important then to look at when I link it to our portfolio in terms of the percentage-wise split between savings accounts and current accounts, that also means that, as I mentioned before, that we expect the savings margins -- or margins on savings accounts to come back to a long-term level that we have seen before.

Thank you. And we'll now take our next question from Ben Goy of DB.

Two questions, please. So first on cost. It seems like Q1 good cost control and you are a bit ahead of your full year guidance. Just maybe you can comment a bit more on that, whether it was FX and how the benefits of the operations restructuring should help in the rest of the year?

And then on deposit campaigns, obviously, you didn't do a big campaign. Should we generally expect bigger campaigns as you did in the past? Or should it be more below the radar, potentially cheaper micro campaigning type campaigns?

All right. So on both of the questions, look, what we have been able to do is that with the continued cost discipline, but also scalability that I talked about in the presentation, we were able to largely offset the wage inflation. And therefore, we also allow ourselves to make investments. So in the end, what we want to do is to be able to further grow and diversify ourselves. So the more we're able to use -- to have efficiencies coming from our scalability, both from the digitalization and our scalable tech and ops, that we can then reuse to get better customer experience by making investments into broaden our products, as we talked about, and that will then support the long-term value and the drive of our ROE.

And in that sense, we continue to confirm also the outlook that we have for '26 and '27. But we do see, and that's what I mentioned on Page 5 of the presentation, continued improvements on that front, on the front of scalability, and it gives us opportunity to play with the levers of investments versus costs, which is very helpful. But the outlook remains the same at this point in time.

When we talk about campaigns, yes, it's mixing and matching. So in the end, we want to grow our customer base. In the meantime, we want to, in the long term, balance loans with deposits. We've seen for a number of quarters that deposits were growing faster. Now we've seen a couple of quarters where loans are growing faster. And so we want to do that in a balanced way. In the end, our purpose is to get more primary relationships in because these clients will do multiples in terms of and products, but also in profitability and in stickiness with us.

And therefore, we will tailor it as to how we can grow and develop our customer base while keeping an eye on our balance sheet. So that's a mixing and matching of both more micro campaigns and potentially more above-the-line campaigns that we've seen in previous years.

And we'll now take our next question from Tarik El Mejjad of Bank of America.

Welcome from my side as well, Ida. Looking forward to talk more in the future. So I just want to follow up first on volumes. I understand the uncertainty element that could reverse if things get better in Iran and the conflict. But what about if we have a more sustained higher energy prices, lower consumption and maybe higher inflation on your wholesale lending. If we see something more structural rather than the reverse uncertainty, which areas you see and what could be impact on your lending?

And the second question is on the SRTs that you're planning to do for the rest of the year, I think 15, 20 bps push of capital. How are discussions with the ECB? And how do you see the market evolving in this current uncertainty? Is that something you still see as on track in terms of delivery and pricing and also on what kind of loans you put there?

Thanks, Tarik, for your questions. And I'll take the question on volumes, and Ida will take the question on SRTs. So I think on volumes, look, in retail, like I said, we have seen over the past 6, 7 years, different elements that impacted the macroeconomic volatility. But again, most of our retail lending and predominantly mortgages is much more linked to unemployment rates and shortage of housing and therefore, how set the war is, that is not directly impacting those macroeconomic indicators. And therefore, we expect a continuation of demand for mortgages and depending on the pricing, and we will, therefore, further grow that book.

When it comes to Wholesale Banking, there we saw in the first quarter, if you annualize -- sorry, if you annualize the growth rate that we saw in the first quarter on lending, in total, it was 8%. That is quite a bit higher than the 5% that we -- 4%, 5% we saw previously over the years. Sectors in Wholesale Banking that could be affected are sectors that are, one, linked to the oil price, i.e., that has the oil price and energy price is quite an input factor on the cost base. You could think about the chemical sector or fertilizers or construction or transport and logistics, those are sectors that are typically impacted. And then the question for those companies is, are they able to pass on those energy prices?

The second element that you could see is that Asia, which is even more dependent, I would say, on the Middle East Strait of Hormuz in terms of getting their oil in, if that is impacting their production levels and therefore, it also impacts the delivery of supply chains to a number of other companies in the world, including the U.S. and Europe. So those would be the main macroeconomic impacts. So far, and we are watching that closely, clearly, a number of the companies that we talk to are much more flexible than they were a number of years ago because they have been dealing with -- and the war in Ukraine and corona. So they are more used to changing in terms of uncertainty.

So far, we don't see so much in our book. You saw the risk costs that are below the through the cycle average, and it also includes an overlay. So the risk costs are still quite benign. And that's just a matter of waiting and looking and helping our customers, but it's too close to see what is really happening. We just need to stay close to the clients, especially in the sectors that I just outlined.

And on SRTs, SRTs are an important tool in our toolbox to ensure capital efficiency and also optimize our capital position. As you know, in November last year, we announced the successful completion of our first 2 SRTs in Wholesale Banking, which provided a core equity Tier 1 relief of 12 basis points. We aim to continue using SRTs across wholesale as well as Retail Banking portfolios in the coming years.

And we have previously also said that we expect to do additional capital reliefs in 2026 of between 15 to 20 basis points and that still remains the plan. We have a very good and constructive dialogue with ECB. So I don't see any negative trends there at all or hesitations from their side. And it's also important to say we are kind of in the early phase of doing SRTs and therefore, are not an outlier in any way.

And we'll now take our next question from Shrey Srivastava of Citi.

Apologies if it's been touched on already. I just joined. But if you look at your 2026 commercial NII guide, it's been uplifted by about EUR 200 million if you take the midpoint. If you compare that against the gross replicating income uplift on Slide 27, it's about EUR 600 million. So therefore, you're guiding to an implied past sort of close to 70% in 2026, if I'm not mistaken. Can you just explain what's driving that, what key markets and what opportunities do you see?

Okay, Ida?

Shrey, nice to speaking to you again. As you rightly say that we saw a strong momentum on the commercial NII. It was much better than expected than what we had guided for before. I think there are mainly four factors impacting this. We had a particularly strong lending growth, good deposit growth also in the first quarter in spite of the seasonal outflows that you always see in the first quarter. Then we see the positive impact of the hedging tailwinds, as you saw already from the second half of last year, really showing an impact also this quarter and then lower deposits costs related to promotional campaigns.

When you look at Slide 27, it is important to say that that's more of a visualization of what we see in terms of replication development driven by a specific forward curve. So what we're saying there is that, yes, you will see a positive impact given the interest rates environments coming into play, but we're also then saying that we will be in the mid -- we expect to be in the midrange on liabilities margins between 100 and 110 basis points this year and could potentially given the interest rate path that we're seeing today be slightly above 110 basis points in the 2 coming years.

But we also expect, given the portfolio mix that we have to see that trending down to more normalized level over time as we also know that there is strong competition also on the savings side, which we also saw in 2023.

And we'll now move on to our next question from Matthew Clark of Mediobanca.

More questions on liability margin, I'm afraid. So I guess, firstly, I was just hoping to understand a bit better whereabouts on the curve, the movements were that benefited the liability margin this quarter. I mean, interest rates only really moved through March. So only for the last month of the quarter. So just trying to understand, was it 3 months, 6 months, 12 months that really drove that 5 basis point benefit that we haven't seen in the past, presumably it would take too long for the longer end to be benefiting the margin that much.

And then a related question is just in terms of the change in guidance from the around 100 basis points previously given. I mean, if you're guiding for that at the end of January, start of February, to have a 4 or 5 basis point upward surprise in the first quarter implies a very high exit rate in terms of the liability margin for March in order to bring that average up. So any comment there? Is it right to think that the March liability margin would have been trending some way higher even than that 104 basis point average for the quarter?

All right, Ida. It's going to be one-woman show.

Thank you, Steven. So Well, if I start with, there's not a specific part of the curve. I think when looking at the numbers and comparing it to what we talked about in the first quarter, you need to keep in mind that we also saw a gradual increase the December curve. So that needs to be taken into account. So there's not one point in time that we're looking at here, but a gradual increase. In addition to that, you, of course, already saw the positive developments on the hedging tailwinds coming from the second half of last year moving into the first half, which is then also then positive in terms of the outlook for the liability margins.

Then the second part of -- yes, the second part of the question was, sorry, I forgot.

Can you reiterate the second question, Matt, the change in guidance.

So there's 2 things. One, I just wanted to come back to the point that we were already seeing a benefit from the replicating tailwind last year because I thought the guidance had been -- well, that was true at the long end, not to expect an overall improvement to the replicating tailwind to swing positive until later on in 2026. But was it an overall replicating benefit we were already seeing last year? Or was it only at the longer end?

And then the other part of my original question was whether the exit rate for the liability margin in March was a lot higher than 104 basis points in order to bring the average for the full first quarter up to 104 basis points.

Ida, you will answer this.

So I think what's important to keep in mind here is that we have lower campaign costs this quarter as well compared to previous quarters. And particularly, if you also look at the first quarter last year where we have larger costs related to campaigns. And then in addition to that, you're right in terms of your point on the shorter end.

And we'll now take our next question from Namita Samtani.

First one, do you think the cost income target of around 52% in 2027, just based on your revenue and cost targets, is ambitious enough, given there are 23 other European banks targeting a lower cost income between 2026 to 2028. I'm just trying to understand the main pillars stopping ING from getting to a lower cost income than 52%.

And then secondly, just on what you would characterize growth markets in your Excel file, particularly in retail, I noticed the loan-to-deposit ratio over the past 4 years has come down by about 10 percentage points and is down to 52%. So I was just wondering why are you not able to grow lending as fast as deposits? And what's the strategy here? Because I would expect deposit profitability in the subcategory to not be as good as it could be in other regions.

Thank you, Namita. I think that if you look at cost-income targets, again, the implied is 52%. I think what we're driving for is on the one hand, operational efficiencies in our existing business, the main development for ING to drive value is to grow and diversify. And as I said, we are a bank that makes about 80% of its revenue based on interest rates or linked to that, whereas on deposits or lending, which is good. That's also our Zip Code i.e., where we came from. -- but we also have the opportunity to do a lot more with our customers.

You see that we grow our fees very well in all kinds of directions and the interaction we have with our clients in that regard and more people who trade with us, more people who use the app, more people who do payments with us, not more people who close insurance contracts to us as a distributor, more people who do financial market transactions with us, and you see it also rising the league tables in the capital markets, for example.

At the same time, because we're also growing lending in various aspects, also that part of the P&L is growing, but the goal is to diversify. And so what we will largely save in terms of our operational efficiencies, we are investing in broadening and deepening our client relationships. That is helping in the end, that's what we're driving towards the ROE. So that ROE, we say will be 40% this year or more than 15% RoTE in 2027. And we continue to drive and focus on RoTE growth. And implicitly, that will then also have a cost-income decrease as a consequence. But the main driver is consistent RoTE at scale.

In terms of the loan-to-deposit ratio, the line was breaking up a little bit, but I believe you said a low loan-to-deposit ratio in Poland. Yes, that is -- every market works differently. Quite a bit of stimulus in terms of investments comes there directly through the government. So there you see it's the public spending that is increasing, but not necessarily the private spending. And therefore, you see throughout all the banks that the loan-to-deposit ratio there is significantly below 100. And of course, we have been very successful in Poland growing over the past 20 years to become a top 3 bank there, we are continuing to do so. But there is a dislocation, if you will, between the growth in lending and deposits in that particular market. That's correct.

I just meant the growth market, it's like a category and in your AXA hold, but you still answered my questions, thanks very much.

All right. So that is correct, by the way. So all these dynamics are in the growth markets, which are mostly emerging markets, whereby if you then look at also the lending that is being done to households to date compared to mature markets compared to total GDP is significantly lower and is going step by step to higher levels, but it takes time. So the dynamics in those markets are different. That is correct.

And we'll now take our next question from Farquhar Murray of Autonomous.

Just two questions, if I may. Firstly, as you say the rates curve, by process, has been very volatile and there are quite a range of possible scenarios that could play out this year. So my question there is, how are you managing around that range of uncertainty and whether you've done anything specifically to adjust for it? And that would be both in terms of positioning within the replication portfolio and perhaps also competitively where it feels maybe you're leaving room for any your own campaigns this year.

And then secondly, briefly coming back on the mortgage floor change, should I see your comments are suggesting this will be simply wrapped into the kind of exercise of 1Q '27, so probably one and done and then maybe even slightly lumpy.

All right. On the mortgage floor, I will respond and then on the whole curve and the campaigns, Ida will respond. I think that when we talk about the mortgage floor, what I meant to say was that there's all kinds of movements happening, whether it is model updates or SRTs or changes in regulation. And we just take it into account in our semiannual update, in this case, by the end of October, whereby we say, okay, we look at what is our structural capital level. And if it's structurally above 13%, then we'll pay it back because what we need below that, we will need for growth. But if there is a structural excess above 13%, then we will pay it back, and we lump what we now see in also the mortgage floor in the Netherlands into account in that whole decision. Ida?

Thank you. In terms of looking at the replication, I think it's important to just say that this is primarily a risk management tool in order for us to match the different parts of the balance sheet rather than trying to make smart moves in the short term. And that's also why you see that we continuously see a good uptick in terms of replication income from the second half of last year into this year and also expect to see it going forward. So we haven't changed any strategy, are not making shift transitions purely based on the volatility. And I think overall, we have a very low risk appetite when it comes to interest rate risk in the bank and are therefore, managing interest rates overall in a prudent and strong way.

Thank you. That's all the time we have for questions. I will now hand it back to Steven van Rijswijk for closing remarks.

All right. Thank you very much again for your time, your attention, your good questions. I'm sure you will have a very busy day, given all the banks that are coming out with their figures today. So all the best with that. And I'm also very happy that you have now spoken to Ida as our new CFO and to Andrea as Head of Risk, and we will continue on the path in the next quarter and see you soon. Thank you.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.

Good afternoon, everyone. I'm here today with Marnix van Stiphout, COO of ING. Marnix, hello. Thank you for being with us.

Thank you. Pleasure.

But before I start with my questions, I have the usual following question. So how will AI Impact ING's earnings growth trajectory over the medium term. Strong positive, moderate positive, neutral, negative impact due to the higher cost of deposits or is it too early to tell?

Well, okay, and zero negative impact. That's quite interesting. All right. We will get back to this call. But first, we don't often see a COO at Morgan Stanley Conference. And I'm very excited to have you because I think this will be a really interesting fireside chat. But what led you to come?

Well, the invitation joking apart, Look, it's -- there's so much happening clearly. And I think operational excellence the link to customer experience, the take-up, the rollout, the take-up of AI is all sitting in our remit.

So yes, this is -- if there's one time is relevant, it's today, I think. So that's the reason.

Absolutely. And you published the presentation this morning about the scalability of ING's operations. But before we go into the details of this presentation, can you perhaps help us understand your role at ING and how crucial the operations team is in ING's strategy.

Sure. Yes, because it's good to go about it because the definition of COO differs across the industry, obviously. So what we got excluded from COO at ING is the technology itself. But what we include is all of the operations, business and support, so the wholesale, the retail and all the support functions. It includes all payments. So we've got a factory that sets is with us in COO. It includes all AML KYC. It includes all data and it includes all Analytics/AI that we do for ourselves, but for the bank overall, sits within COO. And we do all the transformation for ING. And it's in total, maybe just to give people a bit of an idea of scale, it's about 20,000 people, and that's kind of just shy of 1/3 of the group.

Very clear. And so staying on the topical ING growth strategy, how do you achieve scalable growth?

Yes. So look, it's -- we've got a pretty good trajectory over the last couple of years in track record actually in terms of growing wholesale and retail. We have been a digital bank for a very long time. That's how we've got known, I guess, to many people around here in the room and beyond as a challenger. And I think we still benefit from the fact we've been relentless in digitalization, in straight through processing, as we call it, STP. We even carry an index internally, which we also publish on how STP we are across our main journeys in the bank, 350 journeys we measure.

Secondly, we have pulled together a lot of our capability in terms of people in hubs, 6 countries, 7 locations where we pull technology and operations teams together to work in an agile way, in a flexible way across the different priorities, across different countries, so not linked to a specific goal or a specific piece or a specific country. That has given us a lot of flexibility. It's about 14,000 people in total today, across, again, technology and operations. And of course, with the front runner that we are I dare to say, in AI. And I think if I give you a couple of examples of how this has made us scalable, right, in operations in a broader sense in the technology. We've added about 1 million primary mobile clients over the last couple of years per annum. We have gained productivity in, for example, mortgages, about 50% over the last couple of years per FTE, 28% on the other side of the spectrum in Wholesale Banking lending. We have been able to reduce friction for our clients, resulting in a 40-plus percent reduction in flow coming into our contact centers. And so basically a little bit of a long story short, we have been able to assume new clients more volume and our cost base and FTE count in operations has reduced. So that's what I call true scalability.

Perfect. Can I just go back to something that you said at the beginning, and quickly clarify because you said tech is excluded from the COO. Why is that? And how do you interact with them with the tax side of things?

Yes. So it's good that you asked. I mean when I talk, for example, about analytics, which is in our scope, right in my scope, then the technology side of analytics is within the remit of our Chief Analytics Officer. So he, in this case, works with a full team of about 600 people globally, which I call direct people in COO, but also people in technology. But the functional responsibility for technology sits with the CTO of the bank.

But everywhere, we need technology colleagues to help us in, for example, KYC, they work together, of course, with these teams on an integrated basis.

Perfect. So then -- and let's go back to the cost base of the bank. Some banks are particularly bloated or have a very wide branch network. We call them this these, the low-hanging fruit, but it doesn't look like ING has this sort of low-hanging fruit. So where do you see the biggest opportunities on the cost base?

Yes. We still got a lot of fruit, though. You might not see this low hang, but we still got a lot of fruit. And so just to give you some ideas. We still employ 6,000 people just a bit lower than that is a bit shy again of 6,000 people in KYC. We are multi country retail bank. We've got 10 franchises, deep franchises, and that has basically meant a lot of KYC work next to our wholesale. And there, we have actually got a big opportunity through what we call behavioral modeling, which we have rolled out, which is AI-based, to take out 80% of our manual fallouts.

Well, of course, you can calculate that or at least you can imagine that the 6,000 people are not there to do non-manual work, they're largely doing manual work. So that's a huge opportunity for us, and that's what we are working on today as we speak.

You said 80 or 18.

80, yes of the manual fallout, we will be taking care of, i.e., they'll become STP, so to say.

Very true.

Okay. And the second example where we still got a lot of work to be done or a lot of benefit to be had is in our contact centers. It's about 2,500 people strong. We have, as I said earlier, reduced volumes by 40%. So it's already shrunk quite considerably. We've also got a GenAI chatbot that is giving us an 80% success rate in non-manual resolution of requests. But we're going to use conversational AI by the middle of this year to make that environment even more productive.

And I think what's important to mention, both on the KYC side and the contact center side, there's always 2 conversations. There's the client impact conversation. So on the KYC side, it will also help us onboard clients far more smoothly. And then there is the productivity side, which helps us with the cycle of doing KYC. And on the contact center side, same thing. It helps us to convert clients. For example, with conversational AI. You draw in nondigital clients far more easily through that approach, then we can do that today. And of course, there is the productivity benefit on the other side, too.

So it's always 2 sides of the same coin.

Very interesting, especially the 80%. Okay. So let's discuss AI now. Do you think this is an opportunity for ING? And how do you win? Or how do you use AI to win?

Yes. It would be quite funny if I would be the 0% change here. But no, I think it's a huge opportunity. And look, I think it's important to start with, we have been working, as I said earlier, on digital propositions for the last couple of decades, right?

So we've done a lot of work on our data. We're sharing a lot of solutions like the app across all of our markets and our data solutions as well. So we are well positioned from that perspective. I think what is another important topic to talk about is how we organize for it, right? So we got a single team in analytics in AI across the world, as I just referenced.

More than 95% of all the work sits in that team for us. We consolidate the work as much as we can in that team for consistency and quality and monitoring purposes. We also produce the work on a single platform. So we don't have leakage because people have got different platforms in different countries. We produce it all on a single platform. We got a very strict view on what work we work on. We've got an AI KPI that is carried by me as the COO and my teams by the business in retail by the business in wholesale and also by technology.

So we got like we did with the digitalization STP, we got joint KPIs, which helps us greatly. And a further point is that we monitor this work on a monthly basis, meaning there's board involvement, including myself, with all of the expos across all of our markets. Every month to monitor what's happening, what is the progress? What are the new ideas and to vet new ideas into potentially add-ons to the portfolio.

So my point, ultimately, it's very strictly organized and we look at this as normal execution. Of course, it's novel in terms of its content, but in terms of how we execute, it's very regimental you could argue. So I think our heritage and our approach gives a very, very, very important starting point.

Can I follow up on something you just said? You mentioned AI KPIs. So can you make it a bit more real for us? Can you give us some examples here?

Well, it ranges from the introduction of more machine learning models, right, in the propensity, but also our consumer lending models, our churn models, our e-banking models against fraud. So that's one end of the spectrum. And on the other end of the spectrum, we got in the KPI, the conversational AI launch, for example, right? So it's literally from machine learning to GenAI to Agentic AI all sitting in that space in that KPI.

Perfect. And so the KPI is how quick can you launch it and how effective it is?

We just got milestones on all of these topics for 2026 and 2027. So we just followed the plan.

Excellent. And can you -- you talked about scalability earlier, right? So can you talk us through how scalable your platform is? How much of a competitive advantage this is, how quickly can you scale when you have an AI use case?

Yes, yes. Look, I think it's very much linked also to what I just said, right. So first all, is the organization on how we operate, which makes it that the choices that we make and how we then make them, 90% of what we start get scaled, right? So there's no hobbying, and I don't want to say that other people are necessarily hobbying, but there is not a lot of room for people to innovate on their own.

There is an agenda. We follow the agenda and 90% of that get scaled. There is a very strict risk and compliance approach to it, which is also centralized. So we don't have that kind of decision-making looked at by risk, for example, jurisdiction by jurisdiction. We got that consolidated, too. So I talked about the single team, all the work flowing through it, the single platform and also the single risk approach. And just to give you an idea on the scalability of things, I talked about the contact center, but maybe also in product development. We have just launched Agentic AI in Dutch mortgages.

In parallel, we're working on -- we're using that solutions for German mortgages, and we'll take that to other countries too. So my point is, we really aim and we're succeeding so far in making sure that we get the benefit of these implementations across the different markets.

Perfect. And a follow-up again. So Agentic AI in Dutch mortgages, how does that help? Can you give us some examples?

So we've grown market share quite considerably over the last couple of years. And we are a big Dutch Bank. We have 40% of the Dutch population banks with ING. And still, and that's something to be really happy about, at least I am. We're still add clients and we still add content and products. So we're still growing the bank is my point.

On mortgages, actually growing mortgage book is quite cumbersome, meaning you need well-trained experienced people to add mortgages to your book. And actually, we can't do that anymore. We're just adding people. It's just -- that's too slow. The Agentic solution that we've just launched a couple of weeks ago and will continue to add to, gives us about 10% to 15% productivity gain.

So we can add volume with our people, so to say. That will grow, and that's a fantastic delivery for us. I've seen it live a couple of times now. And yes, it's very good. And maybe to talk a bit about the German side of things that gets launched slightly later still in the next couple of months. And that gets us by early '27 to a below 1 day time to yes for the full German portfolio of mortgages. So that for us in the German large German market is a massive thing to achieve.

Perfect. And I guess the Agentic side of things helps you with the mortgages in terms of all the checks on the property on the collateral on the borrower?

Correct, correct.

Great. And so let's talk about FTEs then because earlier, I was quite impressed by the 6,000 people, 80% potential savings. But if I look at the FTEs of ING over the past 5 years, that has actually increased. So if we look forward, how do you expect AI to impact the overall number of ING?

So maybe just a bit of context. We have built -- of course, that's now in the past, we built quite a bit of capacity on the KYC side, given all that we have to do. We have built our hubs that I just talked about where we basically took external people out, third parties out and build captives. We are a big believer, I personally, but also us as a team that we want to do these things ourselves with our own people. We believe that's better for the continuity, its better for the experience and it's much higher quality output.

So that has added to the FTE base. But to be very specific about today and tomorrow, we have reduced in operations in the largest in a broader sense of the world, I should say, about 1,000 people last year. We are reducing about 1,250 this year, and that will continue over the next couple of years. And you ask me, okay, for the group overall, we're still growing, right?

We're adding segments content to different markets, business banking in Spain, in Italy and Germany, Australia, affluent. That needs people. Also engineering needs more people, but we are balancing that of funding that you could argue through reductions on the COO side.

So let's get to that 0%. There is a thesis in the market, although perhaps not in this room that deposits could be disrupted. And within deposits, specifically, I would say, the savings account. Not really the current account on that one is more sticky if you have your payroll. But when it comes to savings in terms where actually ING is particularly strong that lends itself, perhaps it's a bit more to be disrupted, especially if you are a digital native and so how do you respond to this clip?

Well, look, I see this a bit differently, to be honest. First of all, we've got a broad client base. And if you look at it per customer, it's around 15,000 deposits, right, on average. So these are small tickets. So less vulnerable for individual big shifts. That's the starting point.

Second point is we've seen our deposit base very resilient over the periods, right? So even under considerable change in the markets, we have been very consistent. Further point is pricing-wise, we're sitting largely in the middle of the pack. We're not very high, so exposed in that sense. But I think even more important, as a digital challenger, we have got enormous capacity to detect. We got very good elasticity and churn models that pick up these kind of developments if they occur very early in the process. We got very personal response opportunities, because we have put also model AI developments there, which help us to have personalized marketing and offers to our clients, which basically gives us very good returns at this stage. So my point ultimately is that I think we are quite well positioned to be on the advantage side of this conversation rather than anything else.

But today, if such a tool exists if that Chat GPT, for example, launches a deposit optimization tool, could that operationally happen in Europe?

Well, I think -- look, it can happen, but even with the current tooling like raising offers, right? It's not as prolific or dynamic as people maybe believe it should be. I think it's also important to say, we're adding, when I talk about 1 million clients per annum, we talk about primary mobile clients who do a lot more with us than just putting some money with right? So there is a lot deeper relationship and more products that people work with at ING than just a deposit with a bit of an interest rate. So I think that also helps us protect what we've got today and actually build what we got today.

Got it. And so you have the responsibility for AI within the bank. It's quite a big role these days. So how do you ensure and innovative, but responsible, I would say, AI culture when you roll out new applications.

Yes. So I think first, back to what I said earlier, the way we organize for this is per our normal execution rhythm, right? So the risk we assess, the way we control things, just the consolidation of the work. So that makes it well controlled to start with. What I find very important in terms of controlling what we're doing is that we said, let's make sure that from a credit nonfinancial and compliance risk perspective, we have this single team in risk.

So with the CRO, we said, let's build this. Liliano who is now Head of Wholesale Banking, the previous CRO, I was very keen to do this too. So we got at least a very well-developed capability in the bank for risk assessment, so to say, right, and decision-making. And that's all based on a process that includes 140 risk parameters that we always use for these assessments. So that's pretty solid.

And last but not least...

Sorry, parameters, can you give us some examples?

Well, I mean, the hallucination obviously, is an important topic right? And just to give you an idea, before launch, we look at hallucination, but we continue to test a share of the go-live flows in perpetuity, so to say, on a manual basis to make sure hallucination stays away. So those are the kind of the controls that we put in place.

So it's a very serious how we take that role also in production, not just before production as an example. And last but not the least, I think it's the whole education. We've spent a lot of time and money, by the way, on reeducating our workforce on the junior and the senior level, and that will continue also from a risk perspective.

Makes sense. So I want to turn to the financial impact for ING. But before I do that, let's see if there are any questions? There is one.

We've heard a number of banks talk about the potential for AI benefits to be competed away over time through get backs in rates or effectively being shared with the consumer in some shape or form. What's your view on how much could be shared what the triggers for that will be and maybe what the time frame for that will be, please?

Yes. So I guess the conversation about what will happen with these benefits, right? I mean there's a point of what will happen with the price of AI, I guess, is a question what will happen with consumers? Do you give something back to your clients? And the third point that's floating around, obviously, is -- is this a big reset for all of us? Are we all getting back to the same kind of starting point, right? And I want to start with that point. I think well, anyone who's telling me, let me speak for myself, anyone was telling me that -- this will allow you to basically do away with all your legacy and Sprint forward like everybody else who is well prepared, I think that's nonsense.

My point being, I think the fact that we have spent a lot of time curating our data platform, data quality that we use across the bank rather than having all these different disperse sets of data and data platforms is giving us a very good and better starting point than many others. Because there's less legacy. I think that is important. And a lot of legacy means there is less consistent data, less data quality, less prepared to get this going at scale. So I think that's an important point, I think, to make first. Then there is a pricing point about, okay, you're using -- we use Google, for example, won't the price go up prohibitively and will eat all the benefits? Well, I think a couple of things that we are looking at. We're looking at using more different models than just a single Google LLM, so to say, right?

So there is also a development towards smaller, more focused models for more focused business cases, that should make processing lighter and the business case better. But also, let's be clear, we're not going to throw Agentic AI at everything. It's going to be very expensive if that's what we do. So we're going to be far more selective than some people think maybe in how we apply this.

So mortgages and in Germany, I just [indiscernible] is a big thing for us, right? So a big thing deserves a big solution from an income and a cost perspective. This is more income than cost by the way, on mortgages. And I think that will -- so when we go beyond the KYC and the contact center solution, when we get to smaller and I'm not saying everything else is a lot smaller, but when we get a small end of the business cases will take probably different decisions.

And I think last, but at least on the consumer side, do we give benefit back to consumers. I think it's a bit too early to call, but what I dare to say is the speed by which we bring, for example, conversational AI and other solutions to the market will allow us to deepen our relationships with customers and that allow us to, I think, give some money back ultimately to customers with deeper relationships and more clients coming to ING.

Perfect. Let me see -- okay, we have 2 more questions. So here, let's start at the corner and then we go on.

You've obviously mentioned how much AI can help in terms of cost takeout and kind of reducing head count. You're not the only Dutch bank kind of talking about those kind of programs. And I'm sure you're not the only corporation just in Europe talking about this. How much are you thinking about the potential risks to I guess, lending demand on the retail side, kind of mortgage customers being at risk of losing their jobs if a lot of corporates kind of just replace people with machines. Is that something you're already considering? Or if not, why not?

Well, we're certainly thinking about it. But the more immediate points for me, for us is I gave just examples of 2025, 1000 people, 1,250 in 2026, and that will continue over the next couple of years from a COO perspective alone. We are very serious about the social responsibility that we've got. So the other side, maybe the precursor to your question. And to take that role very, we do a couple of things. First of all, we reeducate everybody who is in scope and beyond the scope by the way, whether we believe they're going to be with us or not, we're going to give people some serious reeducation, reskilling today, tomorrow and the day after.

So that's what we're investing in heavily. The second point that we're doing, the second point I want to make is we're making a lot of extra investment and a lot of efforts with third parties to get very well-trained ING people in operations who really sought after in terms of their skills to other sectors to health, for example. So that is something that's happening as we speak. We're doing this across markets. And we're trying to get people out of banking into other areas of the economy where these skills are really going to be very useful.

So I'm not sure that's going to alleviate all the joblessness that kind of within your question. But at least, I think it's important that there is opportunity for these people beyond the job at ING, and that will help certainly this point.

Yes, we have another question.

So obviously, just given the developments in AI and how it can improve a lot in terms of efficiency, but also -- we got headlines, I think, last week or the week before, from Australia where a lot of cyber fraud was being used and AI was being used in cyber fraud. In terms of protecting yourself against that what does that look like? And also, is it only going to be manifested in better detection? Or will that be also reflected in provisioning and whatnot?

What you said -- what was the last thing you said also?

In provisioning or in terms of credit losses at LLPs?

So well, first of all, we're doing a lot of investments in fraud, anti-fraud and AI also is helping there, obviously. But the e-banking modeling and all those kind of things which are not always easy to do in terms of data provisioning, but there's a lot of money going into new technology for prevention, detection.

Of course, PSD3 is coming out right across Europe, which gives us more of a liability for impersonation across banking, so that we know, obviously. But what is good to say when we put forgery tools in, for example, document forgery tools or when we put a new e-banking model in or we put stricter enrollment technology or process in it gives us a benefit. So we see that fraud numbers are coming off, are coming down as soon as we do these things.

Obviously, fraud are pretty flexible and agile in their thinking. So we need to keep on running with them. But my point is, we know how to respond. We know where to invest, how to build it and to make sure that those flows reduce, but it is a serious thing for sure.

Right. Do we have other questions? Okay. If not, I'm going to continue because we get now to the financial impact for ING. So in terms of cost, you have high 93% cost benefit or $350 million. So which areas do these cost benefits come from?

Well, it's mainly COO, has made the things I talked about, but it's a technology and the cost of transformation gets smaller. For example, we are redoing our tech landscape in Belgium in the Belgian bank by ING. We call it the new banking platform, which is core banking plus the whole of the periphery. The speed by which we do this has gone up because of the engineering benefit we see.

So overall, a bit of a long-winded answer. It's mainly COL but also a bit beyond. We think this will continue over the next couple of years at similar levels. there could also be other areas. I agree, but let's not forget, we're growing the bank. We're growing the bank. We're investing in business banking in Spain, in Italy, in Germany, in Australia. I talked about it earlier, Affluent is the same thing. That needs investments, that needs people. So we might see other savings, but we'll see other investments and still income will grow faster.

Yes. I was -- actually, that was going to be my follow-up question because [indiscernible], we like net cost saving numbers, not gross because the growth then gets hidden away with growth and so the cost base continues growing. So -- you mentioned it's already 350. You see it as a good run rate, can that accelerate? Can we see a bit a step-up in cost savings initiatives?

Let me -- allow me to say 1 thing first, because it's the first time I've seen this in my professional life. COO operational costs are coming down in absolute terms in our case. And the FTEs, as I said, we're also going down in absolute terms. I've never seen that before. So something is happening, right? For sure and that's why we are growing the bank. So I think that's an important point to add to this. The scalability is really novel.

Now your question, could the 3% be more? Yes, it could always be more. But now we are committing to these numbers based on our growth and based on what we see and RCI should improve with 1 percentage points in '26 and '27.

Gross income. I was actually going to ask about that because that's the other key metric. So we're talking a lot about efficiency ING being particularly scalable, yet the cost income is in the 50th, which is a bit higher versus the second quarter.

So if you think about AI and all the initiatives you have talked about, do you think this helps more on the income side or on the cost side?

Well, just by the sheer numbers. On the income side, we're growing faster than before. So our CI is going down, whether then in absolute terms, it helps more on the income side or the cost side that remains to be seen. I think, look, I can add that everything and anything we do in COO and beyond is now being looked at through the lens of AI, right?

So when we can actually apply it, we will apply it. That will have an income impact potentially and a cost impact. I think the best thing is it will improve our CI both ways.

Very clear. Do we have other questions from the room?

Yes, we have one in the middle.

Just one more since you mentioned mortgage underwriting. What is the regulators involvement and appetite for the use of these tools in credit decisioning, if anything?

Yes. So let me be very clear on all that I've talked about in KYC, but also a genetic mortgages, the regulators are fully involved since day 1 because otherwise, you don't get this done. Now more specifically, on mortgages, the AI act tells us this is a high-risk process. So there's always a human in the loop, right? So when we do this, it's productivity for the people working with, but there's always a person assessing the output.

So that's appreciated by the regulators. I think that's really evolved, but that's my personal prediction on the AML side on the KYC side that has already evolved that except for some increased risk, that's a pure nonhuman in the loop automated process.

Perfect. Do we have other questions? Yes.

This isn't really AI-related, but just generally, when you think about the growth on the income side, so as you grow deposits, how do you think about remaining may be disciplined on growth there, where you're not growing deposits just for the sake of growing, but focusing on profitable growth. And if that mindset maybe shifted in the more recent years to be more disciplined over time.

Look, I'm the ops guy. But let me say, we have been disciplined over the last couple of years and will continue to be disciplined going forward. We're not just growing deposits for the sake of having money on the balance sheet. So you can assume that ING will be as disciplined tomorrow as we are today, and we were yesterday.

Perfect. We have another question.

From the outside, it's quite hard to judge, which banks are well invested and well progressed on AI and which are the laggards. What would you advise us from the outside to be asking each bank, either a metric or some sort of ratio which would help us to understand how advanced a bank is -- or what sort of measure would you tell us to convince us that ING is a leader as I think you suggested earlier?

So for the scalability of things, will come to impact in a minute for the scalability of things. I would like to understand when you launch a product with AI, with the support of AI, do you use the same data structure across your bank -- or do you need the Germans to construct something different from the Dutch versus the Italians versus whatever other franchisees.

So I take a lot of time to make sure that when we do these things, we've got data products that are basically reusable as a structure across the bank. So our consumer lending, right, in AML is now 65% instant that consumer lending data structure gets used in all these markets. So that will give you at least a clue about how scalable these things are for these people. And if there's a lot of legacy, they can't get it to a single product, then I think that tells you something.

So that's on how to scale it. And in terms of how to see the impact of it, I would ask, can you show me in, for example, let's stick with consumer lending. Can you show me in consumer lending over the last couple of years, how much of your origination has become zero touch, right? So have you really been able to go from zero, if it was zero to 80% or 90% or 100% or you're still seeing somewhere between 10 and 20, like many maybe will tell you. And last but not least, and what volumes are you then creating through that increased straight through solution.

So those are data products, what's your STP rate or instant delivery and what's the volume going through it.

I actually want to follow up on this question. I think ING is no longer in the mainframe in the Netherlands. Does that help or actually no the solutions even if you are in the mainframe because that's an easy question.

As good point. Very good point, and I'm glad you asked. So it's not only that we're no longer in -- on the mainframe. It's also -- and a lot of people talk about this also today at the investor meetings, obviously, people ask about core banking. So what are you in core banking? Are you migrating to a single core bank or -- what we have done over the last couple of years, we have gone from a core banking structure that is kind of rich, which does everything for anyone, for everybody. to just doing accounts in core banking, right? So we just have your my account in the core bank. And it means that we've got a payment engine for payments. We've got a lending engine for lending.

So that has become a set of modules in our infrastructure. The benefit of it is it's easier to reuse that's point one. It's easy to change was you don't touch everything at the same time, right? And the third point is you can be a little more granular in what kind of features you build in those kind of dedicated environment. And last but not least, back to the question we just got on what would you advise in terms of measurement. It also allows you to have data quality at a certain level easier than when you put everything together, I dare to say.

So that's what we have done over the last couple of years, and I think that helps our proposition. Right. So rather than replacing the core banking, it's about the middle layer, that becomes more modular.

Perfect. Sorry. Are there any other questions from the audience? Yes, there is another one.

The capability of AI tools is obviously expanding or accelerating very rapidly. How quickly can you integrate new tools into your workflows now that we're seeing the plug-ins come out from Claude and Co-work and so on. As that continues, how quickly can you bring these new things.

Yes. So look, things can always change. But if you look at it today, we use Google, right, as a toolkit, so to say, and also for data -- but within that construct, and we also got an on-prem ING cloud. But within that construct, we can use different models. So we've got Google models, we also got Claude models, right? Or we use Claude, we can add Mistral, we don't use Mistral but we can have Mistral. So there's a library that you can fill with large or small dedicated language models. So in terms of the modeling and the diversity of models, I think we've got a lot of flexibility. And the tools goes too far. We've got a single engineering platform that combines a lot of tools from different vendors relatively easily, actually, absolutely easily. So I don't see that as a problem at all or you didn't say it was a problem that you were just asking a question.

Can I follow up with the question, when we speak with Fintechs and especially in new banks, they tell us that 1 of their competitive advantage versus incumbent banks is that they can release more quickly, like they do several hundred releases even a day, whereas banks operating batches, there is a batch a quarter or it's a much more slow environment to go live. Is that correct?

That's correct for certain banks, but not ING. We launched -- we got an enormous backlog every day of launches. So we don't have that kind of monolithic way of you got 3 releases per annum, not at all. We moved to agile quite a long time ago. So that also means that our release schedule is far more intensive than just a couple of times a year.

Okay. How intensive?

Thousands of releases every day.

Okay. Perfect.

And of course, different platforms.

Yes. No, no, I understand your present across many front companies so, but that's very useful. Thank you. Any closing question, otherwise. Not?

Thank you very much. This was incredibly interesting.

Thank you very much.

Good afternoon. This is Laura. Welcoming you to ING's 4Q 2025 Fixed Income Call. Before handing this conference call over to Jaap Kes, Group Treasurer of ING Group, let me first say that today's comments may include forward-looking statements, such as statements regarding future developments in our business, expectations for our future financial performance and any statement not involving a historical fact. Actual results may differ materially from those projected in any forward-looking statement. A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission and our earnings press release as posted on our website today. Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities.

Good afternoon, Jaap. Over to you.

Thank you, operator. Welcome all, and thank you for joining us today for the ING Fixed Income Call around our fourth quarter '25 results. My name is Jaap Kes, and I'm the Group Treasurer for ING Group. Today, I'm here together with Sjoerd Miltenburg, the Head of Investor Relations. In this call, we will take you through the 4Q '25 results as well as ING's capital position and issuance plans for the coming year. At the end of the call, we will have some time for Q&A.

Before we get started, I would like to point out that the fixed income presentation accompanying this call is available for download from our website. After the presentation, we'll be happy to answer your questions.

With that, let me hand over to Sjoerd.

Yes. Thanks, Jaap. Let me start with Slide 2, demonstrating the outstanding commercial growth that we have achieved in 2025. We added more than 350,000 mobile primary customers during the quarter, bringing total growth for the year to over 1 million, fully in line with the ambitious target we set at our Capital Markets Day.

Our growth in customer balances was well above our target level of around 4%. Our loan book grew by 8.3% in 2025, mainly driven by residential mortgages, while the deposit book grew by 5.5%, predominantly in retail banking from private individuals. Fee income continued its positive trend, growing by 15% on the back of continued customer growth and increased cross-sell. And altogether, the strong commercial momentum translated into very solid financial results as well.

Our return on equity for 2025 was 13.2%, well above our guidance at the start of the year. In addition, we remain fully committed to supporting our clients in their sustainability transitions. Our total sustainable volume mobilized reached EUR 166 billion for the year, representing a 28% increase year-on-year.

Now let's move to the next slide to look at how this commercial momentum drove our financial performance. On Slide 3, you can see that despite the lower interest rates, our commercial NII remained very strong in 2025 at EUR 15.3 billion. This result was supported by the significant increase in our customer balances, disciplined repricing and by our prudent deposit hedging strategy. Fee income increased by 15% compared to 2024 with strong contributions across all products and businesses. Investment products performed particularly well, growing its fee income by 21% with strong performance across all metrics, the number of customers, assets under management and the number of trades. As a result of the strong NII and fee income performance, total income reached a record level for the third consecutive year.

And with that, let's move to Slide 4. On this slide, we highlight the actions taken to strengthen our operational leverage. In 2025, we further reduced friction from the key customer journeys by increasing the share of number of customer journeys handled without any manual intervention. We also introduced our chatbot in 7 retail markets, providing customers with faster and more accurate answers to their questions, resulting in annual savings as well as more satisfied customers.

The fact that our customer experience is highly appreciated is well reflected in our strong NPS positions across all markets. In retail banking, we maintained our #1 position in 5 out of 10 markets while being in the top 3 in all markets. These investments and scalability are also translating into higher efficiency, which is visible in our FTE over customer balance ratio, which has improved by more than 7% since 2023.

And now moving to Slide 5. On Slide 5, we show how our robust commercial growth, strong development of total income and proactive cost measures have resulted into strong capital generation. Over the past year, we delivered more than EUR 6.3 billion in net profit, contributing almost 2 percentage points to our CET1 ratio. The strong level of capital generation is driven by our consistent strategy and stable business model, operating across strong economies with a prudent risk management framework, altogether leading to predictable cash flows.

And the RWA consumption to generate a strong level of profitability is limited. In 2025, roughly 15% of our net profit was consumed by RWA growth. This was also supported by a modest use of SRTs in order to optimize capital efficiency in Wholesale Banking with our first 2 SRT transactions completed in November. On the back of this strong performance, we announced additional distributions for a total amount of EUR 3.6 billion, bringing our CET1 ratio closer to our target level of around 13%.

Now let's move on to Slide 9. And on Slide 9, we present our outlook for '26 and '27. So for '26, we expect total income to grow to around EUR 24 billion. This outlook is supported by continued volume growth and an anticipated 5% to 10% increase in fee income. Total operating expenses, excluding incidentals, are projected to be in the range of EUR 12.6 billion to EUR 12.8 billion, leading to an ROTE that's expected to grow from 13.6% to more than 14%.

Looking ahead to 2027, we now expect total income to exceed EUR 25 billion, which is at the upper end of our previous target range, including a higher fee income target, which we now expect to exceed EUR 5 billion in 2027. For operating expenses, again, excluding incidentals, we expect to be at around EUR 13 billion, reinforcing our continued focus on cost discipline and operational efficiency. Taken together, these targets translate into return on tangible equity of more than 15%.

Now moving to Slide 10. Zooming in on our total income projections, let's start with commercial NII. We assume our customer balances growth of around 5% per year, above the guidance we gave at Capital Markets Day and reflecting the commercial momentum in our franchises. The liability margin is expected to be at the lower end of the 100 to 110 basis point range that we gave, while the lending margin is assumed to remain stable compared with the fourth quarter.

Fees are expected to grow by 5% to 10%, building on the strong performance we achieved in 2025. All other income is expected to be around EUR 2.8 billion, excluding incidentals. Taken together, total income is expected to reach around EUR 24 billion in 2026.

And finally, before handing back to Jaap, let me take you to Slide 23 to give you an update on our risk cost and staging. Total risk costs were EUR 365 million in the quarter, equivalent to 20 basis points of average customer lending, which is in line with our through-the-cycle average. Net additions to Stage 3 provisions amounted to EUR 389 million, mainly driven by individual Stage 3 provisioning for a number of new and existing files in Wholesale Banking. This was partly offset by releases of existing provisions due to repayments, secondary market sales and structural improvements.

As a result, the Stage 3 ratio increased slightly. For Stage 1 and Stage 2, we recorded a net release of EUR 24 million, reflecting a partial release of management overlays and updated macroeconomic forecast. Overall, we remain confident in the strength and the quality of our loan book.

With that, over to you, Jaap.

Thank you, Sjoerd. So now let's turn to Slide 25, where we look at the quarterly risk-weighted asset development. As you can see on this slide, overall risk-weighted assets increased by EUR 4.5 billion in the fourth quarter. An important driver for this is business growth, in particular, in our mortgage portfolio, but we have also seen operational risk-weighted assets going up due to an update of the SMA model. At the other end, we saw a partial offset as a result of our first 2 Wholesale Banking SRTs, which we announced in November 2025. These transactions provide us with first loss protection on diversified portfolios of corporate loans with a total notional exposure of EUR 10.5 billion. The impact of the completed SRT transactions is around 12 basis points on our 4Q '25 CET1 ratio.

Bringing these developments together with quarterly profitability and equity distributions, we will look at capital developments on Slide 26. This bar chart shows the quarterly development of our capital ratios. The CET1 decreased to 13.1% as the additional distribution of EUR 1.6 billion as announced last quarter, has been fully deducted this quarter. The cash component of the additional distribution was paid in January and the ongoing share buyback is progressing well with almost half of the program completed by now. In addition, a final cash dividend over 2025 of around EUR 0.74 per ordinary share is proposed, subject to AGM approval in April 2026.

Moving from total capital to loss-absorbing capacity. Let's move to Slide 29 on TLAC and MREL. Here, we show both the TLAC and the MREL requirements measured against RWA. Left -- on the left as well as the against leverage ratio on the right-hand side. We pulled the year-end 2025 actuals against the TLAC and MREL requirements for 2026. As you can see, we are amply meeting these metrics, RWA and leverage with sizable buffers. Although all metrics are relevant, it is clear the RWA-based MREL is the binding constraint. So this is the measure for us to manage.

The roughly 2.5% delta between actuals and requirements provide us with a comfortable buffer of almost EUR 12 billion against the requirements. Clearly, to maintain this buffer, we will need to come to the market in 2026.

Turning to Slide 30. In 2026, we plan to issue around 6 -- or between EUR 6 billion and EUR 8 billion of HoldCo Senior, which is in line with what we have issued in 2025. For AT1 and Tier 2, we are comfortable with the current AT1 and Tier 2 ratios at 2.2% and 3.1%, respectively. So any issuance is driven by replacement needs and/or to accommodate RWA growth. For AT1, the first upcoming call date for an AT1 instrument is November 2026. For Tier 2, we have a EUR 1.5 billion instrument with a 3-month par call window from February until May 2026.

So now I will finish the '26 issuance guidance first, but I will come back to how we think about par call options in a little bit. First on Opco Senior. We currently don't expect much other than potentially some local issuance in Australia in line with what we've done last year. As we mainly use this instrument for internal ratio management and general funding purposes, this can obviously change in case of unforeseen balance sheet developments. Lastly, for secured issuance, we expect to issue between EUR 6 billion and EUR 8 billion from our various issuance entities and also including RMBS.

Now on par call options, let me spend a few [indiscernible] on this topic to clarify how we look at this. Over the past year, we observed a market practice evolving, whereby peers are exercising par call options at the beginning of the call period -- of the call window rather than at the first reset date, which diverges from our initial expectations.

ING's capital planning and economic call policy are both based on the first reset date. Instruments with par call features have been priced, booked and hedged with this date in mind. Our first Tier 2 instrument with a 3-month par call option will enter its par call window this February. And while we do not comment on the likelihood of exercising the call now, we emphasize that ING retains the right to call the instrument on any day during the 3-month window. Not calling on the first day window should not be interpreted as a non-call event.

Finally, and perhaps zooming out a bit further to the liability side of our balance sheet, let's turn to Slide 37. ING has a very stable liquidity profile, where over 2/3 of the balance sheet is funded by customer deposits, of which retail deposits are the main component. We are seeing continued growth of our deposit book with a customer deposit growth of 4.5% in 2025, driven by continued customer acquisition and successful promotional campaigns, for instance, in Germany.

Due to the success of the Growing the Difference strategy, ING managed to achieve very strong commercial growth and balance sheet growth, outstripping market growth. Next to our LCR of 140%, which is supported by a conservative bond portfolio and sizable cash position, we maintain large pools of ECB eligible assets consisting of retained corporate bonds, retained securitizations and also credit claims. We continue to focus on the increase of these pools of assets that can be transformed to liquidity rapidly if needed.

With that, I provided my key points and suggest we open the floor for some questions. Operator, please?

[Operator Instructions] We will now take our first question from Arne Petimezas of AFS Group.

[indiscernible]

Arne, can you please go ahead? Unmute your audio please. Arne, please go ahead, your line is open.

Sorry, I had a problem with my phone. Can you hear me now? So I'm going to repeat my question. So do you have any plans for tapping the ECB MROs and LTROs at some point as excess liquidity continues to decline?

Thanks for the question. Yes, we -- so as a rule, we don't want to rely on central bank operations. So we want to be self-sufficient. But there can obviously be reasons to draw on MROs or LTROs or in the past, even TLTROs, which is multiple reasons. So in the end, there can be, too little cash to support the financial system. For now, there is a lot of excess cash. So that is not the case yet. But it can also be very economical to draw on these operations. So it can also be very beneficial from a pricing perspective, or there can be specific programs that support the economy like we've seen with the TLTROs. So we don't believe there is a stigma anymore on the usage of MROs or TLTROs, and we will look at it, but mostly from these reasons and not to [indiscernible] -- or on a structural basis to support our balance sheet.

[Operator Instructions] There are no further questions in queue. I will now hand it back to Jaap for closing remarks.

Okay. Then I think we have been very clear and also this morning, obviously, with Steven's call. So thank you, operator, and thank you all for joining this call today. The Investor Relations team is available for potential follow-up questions or else we are looking forward to see you during our investor calls and roadshows in 2026. Have a great day. Thanks a lot. Bye-bye.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

All right. Thank you very much for people on the call as well. I believe you're in listening only mode and we have people here in the room as well from the media here in the Netherlands. I'll say a few words upfront, and then we'll just go into Q&A.

So we had a good commercial and financial results in '25. On the customer side, we grew our primary customers quite a bit. So we had over 1 million primary customers in '25 with 350,000 in the fourth quarter. And if you now look at the total number of customers, but I'm talking private individuals, obviously, over 15 million are now primary out of the 41 million that we have. It's not only the number of customers have increased, but also we have higher business volumes. Lending book in 2025 grew with EUR 57 billion, that's 8% compared to the previous year. And actually, it was double the lending growth we had in 2024.

Clearly, we [indiscernible] the bigger lenders in the European economy. And we have EUR 376 billion in mortgages, around [indiscernible] business banking, EUR 266 billion in wholesale banking. I just give you this number and the size of the lending book with that, we're also a top 3 mortgage provider in Europe at least. And also when we talk about deposits, including savings and current accounts, the total amount of deposits grew in '25 with EUR 38 billion, 6%. So in aggregate, our total balance, which is lending grew on average about 7%, 8% lending, 6% deposits. And of course, we also continue to attract investment customers. You know that we want to diversify. We do a lot in lending or everything with interest, but we want to, of course, do more with customers. So we have a more balanced business profile. And an example of that is investment customers. So now we do have a total of assets under management and e-brokerage banking specialists.

Question, of course, is do you do that in your own umbrella or do you just to sell. So asset under management is more -- asset management term and more what we do is just sell or provide access to shares or funds to buy. So that's why we say it's assets under management and e-brokerage at about EUR 270 million, which was [indiscernible] increase of 60% compared to before. So it just shows you that we're growing very fast. We also come from a relatively small base. So that's why it's also [indiscernible]. And then we go to the income side. So we said customers, business income. So interest income over the year was good, which held up well. Please note that we still had some headwinds from a lower replication volume on the liability side went down and therefore, your replication also going down on the liability side. So we went through the trough midyear and now we're getting out of it. That's why you saw amongst others doing also lending loans that we had a 5% growth in the fourth quarter. So you see that we're coming out of the trough in liability income.

Fee income grew 15% to EUR 4.6 billion on among those investment products but also in wholesale banking because we're doing more lending but also capital market activities because we in the diversification there as well. Expenses were under control, but that's 4% higher for the full year, but the fourth quarter was flat. So one hand, we need to pay more because of the CLA effects amongst others, and we invest on the other hand, we have operational efficiencies to partially offset that. And the risk costs were in the fourth quarter about the cycle average through the year were a little bit below. So it was about 90 basis points, we say through the cycle about 20 basis points. So nothing, fine there. And we realized a net profit of EUR 3 billion, return on equity 3.2%, capital ratio of 13.1% then we have a dividend that we propose for year-end.

So we're happy with the results of course, but it starts always with the interaction with the customer and how much we have the interaction, I think that is what led to it. So let me stop there and then we can go into all kinds of other things that we can talk about the [indiscernible] results.

I wanted to ask about your [indiscernible] at the end of last year. What can we expect this year to be [indiscernible] sizes or [indiscernible]?

Yes. So we can expect a bit more. So we only started to do that for the first time last year. There are many banks who already did this for many years. It also had to do with the fact that we had to make -- get our models ready. So we got the supervision of the ECB came out of a regime that was more a -- what we would call expert-based models to data-driven models. You see it with amongst others banks who have a [indiscernible] in the Netherlands that we all had to improve our models. We all have to do the year, but I think that the Dutch banks in particular, have to make more data-driven and less only expert based. And that took quite a number of years that you need data.

And when you're ready, you can then also be more precise about which part of that portfolio can you then sell and what does that mean at a lower capital. But if you don't know what the exact capital rate is for that particular loan, you can also say, I'm taking that loan off my book and therefore, I take that capital off my book because the supervisor says, I don't know whether that's the capital that you can take on your book. So now we speak the same language in terms of what we sell, it's also clear how much capital release you then get. And therefore, we started with this for the first time now last year in November when we did 2 of these, but we will continue to do that in '26 and beyond. And we said that the impact of these trades in '25 was 12 basis points and 0.12% on our CET1 release. And therefore, we have more room.

And this year, we expect that the trades that we will do will release 15 to 20 basis points, 0.15% to 0.20% in '26. And then we are gradually developing that muscle. It's also, by the way -- and we also are going to develop the muscle in retail as well. I don't expect many of these trades to happen in retail because it's always a balance between risk return what you keep a risk return what you sell. And the risk return in retail is very good. So if you sell it, you also sell a return. So we try to do it there where someone else likes to return better. We like to return less, and you can play with it in the market. But it also, especially in this day [indiscernible]. So we see higher growth. We see higher lending growth and higher deposit growth.

But with that growth, you also need the ability to grow because that growth comes with capital. So that also means that you want to have more flexibility to also to have a [indiscernible] that you can release capital that you can grow with customers. If some time you're full and the customer call you [indiscernible], well, I'm sorry, I'm full because you want [indiscernible] go to the next door. So that's why we have always been very much a credit-driven bank. So [indiscernible] cash flow that we keep on our balance sheet, but that also has its limitations because at some point, if the growth in the market is faster, you cannot respond to the demands of the market where you say, well, I can't grow any faster with my capital. That's why it's also good to trade.

And you said that Dutch banks are -- as far as other European banks in changing the risk model from expert today [indiscernible] to explain?

Yes. So what you typically saw after the ECB came in and the ECB works with data-driven. So in the past, [indiscernible] joke we come to Central Bank and I said, so what's your loss given default on shipping. So if you lose a ship, what's your loss? [indiscernible] You have the expert on shipping. It's old and gray, it's 30 years of shipping experience, [indiscernible] what do you think [indiscernible]? 20%, 20% so based on that, I'm simplifying the point, then that people say, okay. So in that shipping portfolio, when you lose a ship, you lose 20% of the loan. And why is that? Because the old and gray expert says based on his decades of experience, and that's why I went this way. I don't know.

He isn't looking happy either.

He's thinking of his retirement. So -- but then the ECB came and the ECB is more data-driven supervision. But if you look at the supervision of more Southern European countries, that was also more data driven. So the way that the ECB start to supervise was more akin to Southern European countries and more Northern European countries were more expert based. That's why there are different speeds that's with different banks have to chase into the model of ECB. And if you look at the Dutch banks compared to some -- well, but also other more Nordic banks compared to more Southern European banks, we had more only develop models in the south, they have more standardized models, standardized is the right [indiscernible] it's the same. They had more data-driven models and models [indiscernible] then we have to converge.

Do you think if the whole market is going to those SRTs increasing, what do you think as a market risk for the whole financial sector pushing -- you're getting higher leverage, that's what you put...

Yes. So the Dutch expression is everything with it is not good, except for [indiscernible], so too much so. And that's also the case with an instrument like SRTs. So what the risk transfer does, it transfers the risk. It doesn't transfer the loan. So the loan is on your balance sheet, but you transfer the risk with it and you still transfer what they call a first loss piece, so you can calculate how much the initial loss will be [indiscernible] transfer. And therefore, your capital goes down, right? But it's not a holy grail, but it -- because it means that someone takes that risk. If the loan expires and we extend the loan, we go again back to this person, you still want to have that SRT with us, yes sure we'll do it again, right? And so as long as that works, it's a progressive [indiscernible]. But if the music stops, you get the loan back in your balance sheet. So if the guy or girl there says, sorry, we were full or we don't want to do it anymore, for renewing this, oh, sorry, he has to take it back.

So with these instruments, you always need to make sure that what is the market capacity, never make yourself dependent on one instrument only. And it's like everything with the bank, it's always about diversification. Diversification of risk in portfolios, countries, type of businesses but also diversification of how you call it, insurance instruments, SRTs, CPRI, which is insurance, ECAs extra credit agencies. You also there need to diversify to make sure that you're not dependent on one element when some -- when there is a market dislocation and therefore the whole market says freeze, and then everything comes back in this gives to your balance sheet. So you need always to balance that. Now if you look at ING, we're only starting.

So we are -- if you look at the -- there's reports of brokers that look at how much SRTs the European -- we may have been doing, and you see amount, amount, amount. Plus all the way on the right-hand side, you see the Dutch banks. So that is -- does it in itself pose a big risk for ING? No, but we're always cognizant of if this goes too far, what does that do.

[indiscernible]

Experts, yes.

Trying to understand what's [ there ].

Yes. Because those experts, they know best how it works. But if you didn't ask the experts, so do you have any data to substantiate that? That's what I'm saying. I mean, look at me, 30 years of experience. What do you want? So...

You write something about the investment product offering. Could you maybe paint some color on that in the different countries you work on and on the success in the different countries?

So I think maybe let me go back to, let's say, ING Direct because we started ING Direct 25 years ago, and then we basically said the concept of, let's say, Postbank -- that was a telephone bank in the '80s, and then it gradually became a digital bank. We said there also seems a need for that in other countries. Our predecessors said that. That's why we started to go in the other markets because there were no banks with no branches and just digital, and we said, well, apparently, there's a lot of demand for it because many people don't want to go anymore to a branch.

And then the focus was let's just do savings. So we are the other bank. We are not their first bank. We are the other bank. So if you have additional money and you don't know what to do with it, open an account with ING, going to be very low price. It's going to be simple, going to be a very simple bank, not too difficult in all these contracts. It's going to be a few clicks on the app. We're going to make a good app. And you just put in the saving. We give you good rate. And then we are going to invest that saving in our replication portfolio that we also make good rate [ there ].

That worked very well in a number of markets, and then some markets, it did not. And [indiscernible] sell some countries, but in a number of markets, it worked very well. At some point, of course, in the retail side, a very important thing happened, which is the financial crisis hit. And what did that mean is that the interest rates went down and became, at some point, even negative. And the long-term interest rate became equal, and the interest rate curve became flat.

So that business model, if you're very a one-trick pony, doesn't work anymore, at least not in that period. It didn't really work for 10 years from 2013 on when the interest rate became low and negative in 2021, '22. If you would say at that point, shall we start a business model and then do this, I would say this is very bad business model. And so it is that we already had it for a long time and of course, [ greatly it comes in ]. But it shows the weakness of that business model. And so we said, look, we are growing up. We need to become more of impactful. That's why we talk about impact and relevance. We really need to become a main bank for the customers. Yes, primary customer but really [indiscernible].

In that setting, all these 10 retail banks that we kept eventually, so 9 of them in Europe and 1 in Australia, we all -- the concept was all the same. So it's all orange. It's all lion. It's all the marketing. It's all savings. It's all digital only, mobile first. The concept was the same. But how they build it? We said -- so the entrepreneurship was very important. You know the local market best. We can't see that from this market that you do it in the best possible way. You tell us how you do it. I mean look at the deposit rates, the way we once talked about. They'd happily say, yes, the core rate here is lower compared to other markets we're with, core rate plus fidelity premium or the work with longer-term rates. Every market works differently. It also goes for how do you employ your bank. So same concept, different execution.

So also when we start the investment products and we said, okay, let's then diversify. Let's open not only savings account but also current account because when you have a current account that people put their salary on it and then you do main business with. Let's do mortgages or let's do investments. But the way we developed it in all the markets which is different. Okay. There's a mic on your app. We have a different infrastructure platform behind it. We have a different provider of these assets because we don't -- typically don't provide them. We just sell it. So BlackRock and Goldman Sachs and [ EQT ] and all these, and obviously the French one, Amundi.

And so we have -- they have the products. We say, well, we want to package it for these type of customers. Then they will do that, and then we will distribute them in every market in a different way; in every market, different platform, so physical infrastructure platform; in every market, a different execution agent. Someone has to do these trades and in different markets, different reporting.

So then you say, well, can I then see an overview of that. Sure. In every market, you do it differently. So why not? And so only gradually, so where we now really say, guys, we really diversify because also cultural shifts in the bank, we said, hey, that's funny. You can these days also buy one infrastructure platform. It can be just one. We know that. It can be one execution agent. You can do one same of reporting. So we move to much more scalability in this product. So that's another comment to your answer.

Then, markets were also differently in terms of it is more just -- sorry, the second thing that we did is that we were largely only doing what we call execution only, what they call brokerage. We said now here's the app. And you want to invest or go to the app? Yes, you can invest, and we have a number of funds and bonds and [ God knows what ]. And so good luck with it. But then people come in and say but I want to have -- my father passed away. He has a house and there was also a portfolio, and I want advice. Go to the app. Three clicks, you can invest.

And so for many people, they said, yes, but I have more bespoke needs than just simple ING [indiscernible] Postbank, simple, easy, everything the same, no thrills, no frills. But if you move up into the investment space and nowadays, you see many more people do that because the pensions cannot cope with it anymore. More people say, yes, but only investing and getting an app is not reason enough. I need some type of advice depending on what situation. So we also need to move up. So initially, we very much focused on distribution brokers only going through the app, and increasingly, we need to move up in terms of more bespoke for different customer segments.

If you look at the markets where we are the biggest, in Germany, we are very big. And so of the 5 million customers, we're quite big in Germany, and we're growing. We're quite big in Belgium. We're quite successful in Spain, and we're now growing in Italy and the Netherlands.

And it's horses for courses. And what do I mean with that? Why we were in Germany so successful? Because we -- ING is being seen as a very good digital bank and really differentiates itself from other banks being the digital bank in the German market. And therefore, when people said, well, I want to invest in an easy way, ING is digital. So the reason why people started to work with ING in the first place was because of that digital element. The same is the case in Spain.

In Belgium, people invest typically much more. So it's much more in the genes of the people to invest. You know the saying, the people are born poor and die rich because of our banking system. In Belgium, people are being born rich and dying poor because they spend more. So -- but there is a difference. The wealth is divided in different ways. So there's different ways to do things. So they invest earlier to save money for a rainy day. And therefore, Belgium is, of course, also a big investment market.

But gradually, you see also in markets like the Netherlands that it is growing because people do see, okay, we have a lot of savings. Savings rates are relatively low. The inflation has come down, but people have seen what it does if inflation gets higher for a long period. You will see that the pension systems are changing. So we need to -- and I think that has been a conservative stance of many companies in Europe. We need to also realize it's good to be conservative and risk minded when it comes to the price. And we need to see how we balance that with balanced long-term savings and investments in different markets. That's why you see different [ speed limits ].

You say that in Germany, Spain, ING is still the digital bank. I saw some reports that maybe ING is also maybe an incumbent if you look at Revolut or other banks like Revolut. Do you notice that Revolut has a big uptake in Gen Z? And is that a risk for you?

Yes. I think that we compete with all kinds of competitors. So in Asia, I think 25 years ago, although the term neobank did not exist as yet, but then ING was basically the neobank. That word would be there because we were the first one to introduce digital easy services, no branches. And we kept a very small service. So we said it's simple, not all kinds of deep products in the market. We just do only 1 or 2 products, so that for those particular products, you go to ING, not for everything else because that is -- that will be complicated.

I just told you the story that we had a complicated bank because we -- at some point, we had to say we're not too big. We need to do something else. We make a [ subsidiary bank ]. So we compete with incumbents that are more branch-based models that move to digital, and we compete with new neobanks that are either focused on international payments, FX, like Revolut or doing investments like Trade Republic or N26. So they all do the same as we did. We carve out a niche. They become very good with the niche. There are all other niche in many markets, and then they [indiscernible].

Our challenge is to grow up, to get out of, let's say, puberty. That means that -- and in the meantime, by the way, we build our own legacy. We built our own core banks in the different markets, much more digital than other banks have. But still, we have no legacy. So we are, on the one hand, working on decommissioning that legacy and going to the next step, cloud-based environments, make our core banks much smaller. In the past, the core banks, especially with the IBM mainframe [indiscernible], whatever, AS/400 systems. I don't even know how they look, but they just tell me...

They were big. Saw them in the archives.

Here, we go. Yes, they were very big. But also, they have anything -- everything is put on top of them, product, service, KYC. And so everything is stitched up. So you can say, well, can we just decompartmentalize. No, no, no, don't touch it. Everything is linked. So it's almost like a spaghetti of some -- well, let me say, small systems. But you cannot say, oh, yes, that's how it is and no, no, no. So as long as you keep that mainframe plus system, you're where you are.

We already built most of our core banks on the cloud. So we have big [ on the ] cloud. But even in the setup of cloud, at least virtually, we built similar core banks, albeit virtually but still linked together. The new core banks that we're building are much more simple, only [ for ] client administration and everything else is modular. Then, you can make these things much more global. That was not how the bank even virtually was built in the past. So we are more digital than incumbents. There are things we can learn from the neobanks like whatever they are doing now. So on the one hand, we have the depth, the trust of the customer, and we need to retain the agility of the neobanks. That's currently the phase in which we're in.

[indiscernible] I read a report [indiscernible]...

[indiscernible] newspaper.

[indiscernible]

You wrote it?

[indiscernible]

What bad article was that?

The big challenge is in countries that are more upcoming.

More upcoming?

Well, if you look at the countries we're banking, you use the [indiscernible]. R&D was like [indiscernible]. At the moment that you are maybe new to [indiscernible] a little bit in terms of the new banks around [indiscernible] and are there -- do you share their worries about [ this budget on R&D ]?

Sorry, let me get it straight. You guys write an article, and now you want me to quote your article.

No, not really.

No, no, [indiscernible]

[indiscernible]

Yes, yes. So I think -- well, let me put it this way. So we are able to grow very quickly. So our growth, if you now look at our growth, has been bigger than the last couple of years. And so I do not see myself constrained in our growth. Our biggest challenge is to deepen and broaden the activities with our customers. So we were, in many markets, a relatively small bank. So although you can see that we increased our primary customers from, whatever, 40 million to 50 million.

To become the real primary bank, it basically needs -- you want to be the #1 or #2 bank of customer. And in the Netherlands, for example, in retail, we typically use one bank, [indiscernible] why pay another EUR 30 for another bank? So that's what makes lives complicated. In other countries, depending on the country, people use few more banks typically. Maybe that will change as well. I don't know.

But our challenge is to broaden and deepen the activity for the customer and at the same time, I think to your point, to also compete with digital innovators. So we need to do 2 things. First of all, where we -- where the experience of the digital innovators is better than ours, we need to close the gap. And you still see that. And that's why we talk about that. If you look at our Net Promoter Score in 5 [indiscernible] markets where we're seen as having the best customer experience in half the markets we're active and in other markets, we are top 3. It's not to say about the score, but it's about continuous focus on making your processes easier, more instant, less steps, how the customers perceive it.

And I think there, we also take, let's say, innovation from the digital innovators because they do things that we said, oh, yes, that, we haven't seen before. And what we take from the incumbents is how do you now convert the relationships that you have and do more business with customers.

So are they challenging? Yes, of course, they're challenging, but the incumbents are also challenging but on different fields. So do I see growth slowdown? No. Do I see that there are share competitors? Yes.

And do you think that you will be able to close the digital [indiscernible]?

Yes, because, I mean, look, it's all about digital journeys. And so you can measure these journeys individually. And so for example, we introduced a subscription package in -- approach. And that's -- by the way, that's not about digital journey. That's more about the approach to market.

So a number of these neobanks, they work with subscription packages, a little bit a la Spotify. So you don't take an account you used to get a subscription package. And if you want this type of Spotify account or, whatever, FIFA account, you get these services. If you want more extended services, they pay this, and then you get [ SO ]. They do bundles if you will.

Now that's also a different way of, let's say, of focusing on subsegments in our markets. Which subsegment wants which service? And remember, ING, that we came from that Postbank mentality. It is a one-size-fits-all mentality. So we want to make things very easy, instant, personal, relevant. But to be honest, that was the mantra. But to be honest, we were very easy and instant but not necessarily personal, relevant. We just said, like I said, with that -- no joke with that investment proposition. Now it's 3 clicks. We're the easiest. I said, yes, but -- it's fine, but I have a specific problem. But my problem is 3 clicks.

And so to be much more specific to whether it's Gen Z or affluent or pensions or expats and therefore, really tailor your service and for example, also subscription package is also what you see with neobanks are doing. They focus on a niche or subsegment that says I'm going to be the best in this particular subsegment. And what we need to do is to specify the needs of subsegments in our customer base. That's what we're currently doing to look at that -- sorry, to introduce that, and that's why we have -- for example, next to improvement of digital journeys, also brought these packages, for example, Romania. We will roll it out in other markets as well.

[indiscernible]

Yes. That's always the case. So there's always -- also incumbent banks that are now -- look at some European banks or American banks. They are going to market to go into a retail space or to SME. So it's not only the neobanks. There's fierce competition, and therefore, it never stops. It's all about how do I get to the next level of the best customer experience to be ahead of competition. And that didn't stop with becoming a telephone bank. That didn't become -- didn't stop with becoming a bank that have an app. That didn't stop with being a bank that now has most of its processes, STP end to end. And now people go to the next level and say, okay, how do I make my journeys more bespoke and how do I use GenAI to make it even more personable as well. That will continue.

Question about since you touched on Germany [indiscernible]

Yes, that -- I think that -- so coming back to what [ Eva ] asked more broader story, so with this ING Direct, we were a very small bank. And also in Germany, where we started ING-DiBa or it was DiBa at the time. We were a savings bank effectively and gradually moving into a bank with current accounts. Then, we moved to mortgages, and then we moved into a bank with a trading account like we now have.

Still, if you look at more incumbent operations, which we already started a long time ago, so like in this country in Belgium with all the predecessors of ING, 100 -- some 150 years ago, we became full-fledged banks, so like we have here, for example. That means that in countries like in Germany, we do not have a number of services.

By the way, we do have consumer lending but very much focused on only a few segments. We don't have SME. That's, by the way, why some of these new banks going to SME, because SME, especially self-employed, is also very digital. So there's a natural progression from a person who banks with you as an individual to a person who banks with you as a self-employed business, right? It's the same account, the same processes and similar KYC.

And so it's a natural progression, so therefore, doing credit, consumer credit but also doing credit or current accounts with self-employed SME. That's why we started a digital SME bank in Germany. I don't think there is a good digital SME bank in Belgium -- in Germany, and that's why we are developing it because we're with the digital. So we use that angle to actually now say, okay, how do we now do this in very good ways for self-employed and SME. But that takes a long time. And so this morning in the analyst call, people asked, okay, how big is it now when compared to others. But yes, we're a...

How big is the SME bank?

In Germany?

Yes.

It's small. So yes, but we have a EUR 1.1 trillion balance sheet, so in total, in aggregate. We started with 0 in SME. And what you then do, you first -- especially with self-employed and SME, the most important thing for self-employed people is not the lending. It is the current account payments. They don't borrow their money. They just want to have current account. They want to make payments. They want to send invoices to their customers. They need to pay to their suppliers. That's how they start.

And of course, when they then make revenue for a longer time, then, okay, they get opportunity also to borrow money. So -- but if you look at the pyramid of mid-corporates -- sorry, SME, in terms of number of clients, it start with self-employeds -- this is for my own amusement. So the self-employed is, let's say, a very big group of clients.

They have SME, [indiscernible] EUR 250 million revenue. If you look at the revenue in terms of what they make for customers is, of course, very small. And moreover, these ones are more about payments than these ones about lending, these ones are about lending.

So these ones, which is a very large group, we need to really serve well in what they do in payments and supply chain and invoicing. Now that's what we need to do first. When we look at the growth of number of customers, I think that last year, the third biggest country in which we grew the number of business banking customers was the highest -- was the third highest in Germany. So high growth in number of customers, high growth in deposits so they first bring in the deposits because they have an account, the deposits. And that's where we see that we are growing quickly, but we grow from a very small base.

But what then I was just checking out [indiscernible].

Yes. So it's not in that sense come to the main question. So therefore, if we can accelerate our growth, private banking or consumer lending or business lending, we will do that because then we can do it a lot quicker because before it becomes sizable will take a number of years.

We are looking at a number of players, by the way, in many markets. And we haven't come in these markets to an acquisition because it needs to fit from a cultural point of view. I don't want to disrupt the high autonomous growth that we have because we have good autonomous growth. And when you certainly acquire something, everybody will look inside, okay, we don't need to restructure to integrate. It also needs to make sense from a return perspective.

So in that context, we're looking at things. And yes, if that doesn't fit, I'm not going to do it. So M&A is not the goal itself. M&A is a means to [indiscernible].

[indiscernible].

I don't think it will change substantially. I think that what is important. First of all, I think from a societal point of view, it is important that we, as a society, including [indiscernible] government and also banks think about how do we make sure we take care of everybody. And so the large majority of the country can take well part of society, but there are always part of society that cannot and that requires extra care. And I agree with that.

So for example, also if you look at -- and that's not per se a banking problem, but banks are also involved in it. If you look at, for example, our digital society, our society is very digital and the Netherlands is more digital than a number of other societies and brings many benefits, but it also leaves people behind or there are some people that have more difficulty in becoming part of the society because they find difficult [indiscernible] cannot find their way into the system.

And therefore, there are all kinds of initiatives to just see, okay, do we need to help people online or can we together educate with other industries and the government, by the way, to become more digital to make it easy for them or to teach-ins to continue to be part of society.

Same goes for a number of SMEs. How can we make sure that we do not behind that. That I think, is part of that conversation. But at the same time, we need to be mindful about is that in this case as banks, we also have our obligations from, let's say, in our perspective. And the question that we then need to ask ourselves is how do we make sure that we also keep society safe while enabling people to take part, that should be the case...

[indiscernible].

There always is. So there is always a question between accessibility, data privacy and safety. And it's for politicians to guard that balance and for us to say to give input on, okay, if you make this choice, this will be the consequence. Now it's upon you to weigh those interest to see where you want to be. And I think that's going to be the case.

[indiscernible].

Yes. The coffee shops [indiscernible] within that, there is a question about can you categorically exclude or not. And I think that increasingly, there is a view that [indiscernible] so well. But why is that because [indiscernible] judge or audit or get the information of each individual clients on an individual basis rather than saying, well, all people who have these type of companies or all people starting with the letter as we don't want to have. And so it comes back to, let's say, sort of a universal service obligation that basically said, okay, get there for you categorically exclude [indiscernible].

And at the same time, you need to answer a question, okay. But we do statistically know that there is -- there can be more fraud, money laundering, terrorism financing activities taking place because some processes enable that. So that also then does something to the requirements that you have on an AML and fraud prevention perspective.

And then within that, I think we are maturing that discussion now in this country, I think that's good, which is about, let's take one step back, is what we're trying to do with each other, is it really the right thing? Don't solve anything. So do I agree that banks have to pay their [indiscernible] people role in AML [indiscernible]? Of course, I do. Do I agree that we should have done more than we did 10 years ago? Of course, I do.

And then we need to see that are we then what we're doing, is that very effective or not?

No, not really. So -- and that is because we have applied all of us as a society. So the pendulum swung in a certain way at some point. I think we're there now that say, aren't you [indiscernible] sake of time, but you asked me to. So let's now discuss together, and this is not finger pointing. We need to solve this as banks, the Central Bank, the lawmakers, the privacy authority.

Let's jointly take a step back. And by the way, we do have roundtables now with the Minister of Finance with that say, are we doing the right thing? Is this enough risk-based? Should we focus more on more risky elements and spend less time on less risky elements and therefore, make sure that what we do, we focus that effort on higher risk and less on low risk. And will that then be -- will we then be completely insular of nothing happening? Of course, not. Society -- as a society, we take risk every day. I mean we don't want to have risk, stop driving. So let's not have for us. So -- but we, as a society, have taken a conscious choice to take certain risks because that's how we want to live.

But I think the balance in this case has to become completely insular against money laundering risk that is impossible. And therefore, the best way to actually fight it is focusing on the higher risk. I think that's a good direction.

[indiscernible].

And now we are more in talks I guess through media and the courts in that regard. So [indiscernible] said that they -- already 2 years ago, said that they would start the court case against ING. A year ago, they filed that court case against ING and then it took some time and then we got, of course, their information and now it is upon us to respond to that. So you see how drag out these cases are. So we are about to respond in the next month or so in terms of the change that they make.

Next month...

[indiscernible] then there -- and I think in the end and we've said that we want to play our role in having a more sustainable society. So I think that the goals that we have are similar, but I think that we differentiate quite a bit in the way how to get there. And we believe very much that we need to do this in a transitionary path that we need to do it with clients, that we need to enable clients to take on new technologies that takes time to build economical models. It takes time to make yourself less dependent on fossil fuels, and we can't stop overnight. If that's what people want, that's just impossible and it's also realistic.

And if that people say, well, we want to have that judgment to be made by Boards. That's one of the ways we can have these agreements, and that's one that we have these agreements to be -- come to fruition for us and again, and that's why I want to focus on that, much more important to focus on how can we help customers. I'm actually quite happy, I mean, with all the geopolitical tension going on and talks about whether fighting climate change is good or bad or whether you should invest in windmills or not and had it all the geopolitical -- there's a lot of noise around that. But in the meantime, if you look at our sustainable volume mobilized, which is sustainability loans that we did ourselves that we underwrote or [indiscernible].

So let's say, it's an indication for activity rose from about EUR 140 billion to EUR 166 billion this year, which is more than the target we set in 2007 and also in the U.S. And so I know...

And how much [indiscernible] loans are?

We have EUR 750 billion. It's not only loans. It's also bonds, [indiscernible] markets. So you cannot compare it to the [indiscernible].

But let me put it this way, it's -- I don't have that because I need to look at all the -- I don't know that. But it's quite a significant topic in our conversation with customers. So it's not like our site business. Let me give you one example where you can see that it's also -- because the activities are, for example, renewable energy, so windmill, solar panels or new forms of electricity, batteries, for example, or circular economy like textile that is being reused. So those are all different forms of sustainability.

In terms of renewable energy, which is very much the only element which is about, okay, what did you finance on projects that are really about renewable energy, which is solar and wind and hydro and hydrogen, we made a commitment whereby we said that we want to grow the portfolio from EUR 2.5 billion annually to EUR 7.5 billion per annum by 2025. The figure for 2025 was EUR 9 billion. So we almost quadrupled it. And obviously, we want to do that in a sustainable way so that we also can make money of it. So how do we do it in a way that economically, it works also well for the client and for us.

So I just showed you that also renewable energy becomes a bigger part of the energy production. And I think that's very good. I think the biggest challenge remains is how can we get new technologies find us, how can we [indiscernible] transition phase, how can we make sure that the entire society [indiscernible], for example, contracts for differences, temporary subsidies, [indiscernible] for certain factories that everybody needs to position at the same time.

All those things will help industries to transition. And I see that more is happening. And for us, that's the most important thing because that's about where can you really make the impact, well, not in court, but with the customers. That's [indiscernible].

[indiscernible].

[indiscernible] many people, most of the people that work with ING are working in operations or in technology. 60% of our staff. I'm not even talking about risk management [indiscernible], if you will. And I think it's good.

Look, we want to be very good -- we want to be the best European bank. We want to be a strong bank that I want to hire the best talent. And for that, we need to compete in the market. And to be able to compete in the market, I want to be able to compete with -- not with our hands tied behind our back. And that means that when we hire a significant amount of our staff, we compete with technology companies, operational companies whereby people say, I want to have a very good experience, and I want to see how one of the elements that I want, which is a decent proposition also I can compare with other players. And we can't explain all the [indiscernible].

So yes, so I think this is a good direction that we take because it helps us in hiring better staff.

[indiscernible].

Yes. Look, I mean, the question is always, do people believe a variable pay or not? Is that a good instrument to motivate people or not. But clearly, if you are in a situation whereby you want to compete with other organizations for talent, you want to have flexibility in how you structure also a payment package. And when you say, well, others have more options, and we have limited options, that is limiting you. And it's quite unconvincing to go to someone, well, but if you work for I, you just earn less, then we need to structure differently.

That's only one, let's be honest. I can't say to someone, no, I come here to work for ING, but you just get less because we have a different remuneration system, you guys structure your remuneration system differently or you pay you more fixed. So of course, it gives you also more flexibility. And by the way, it gives you also more direct performance measure with the variable pay. But I think it's more important that we get more flexibility in how we can attract talent.

I have a question about defense exposure. Is bank looking decreasing [indiscernible] and are you hiring [indiscernible]?

We build -- so first of all, the answer is yes, we're growing quite quickly in our defense exposure. Again, there are different speeds in different markets in Europe. Poland, for example, is growing very quickly. Our exposure is at least a couple of billion. And we have well, we have -- since a year ago, since 2 years from almost 0, we now have between 40 and 50 projects in the pipeline.

[indiscernible].

[indiscernible] billion from almost nothing.

[indiscernible]

[indiscernible] very, very high single digit. If you go from almost 0, then a few billion is. So what you see is that -- some countries are quicker, that can have something to do with the geographical location. If you're further away from where the action is, you may think that you are living in more relative safety than other parts of Europe. Some markets also have a more structure for that.

So in some markets, the defense companies are owned by the state. And therefore, it makes it more they're quicker to act. So we need to defend our country through our own defense companies, which we own that we can also guarantee. And in some markets, there's more juggling around, how do we structure this? How does pay for this? How do we collaborate and it takes longer. We are a European bank. We want to help Europe to build up the European societies want to build up their defense capabilities. And we are a sizable European bank and we want to help them within the limits, of course, of the UN limitations that we adhere to.

So no [indiscernible], no conventional weapons, so that we stay away from. But other than that, we want to help with them.

[indiscernible].

Yes. Well, we have -- so when we said we were really going to -- it was actually funny, it was the [indiscernible] who pointed this out a few years ago.

[indiscernible].

Yes. Sorry, I didn't want to say that.

I like my colleagues...

So there was a big societal change a few years ago, and there was a meeting [indiscernible] then some of your guys asked the question. So why don't you do as some clients are complaining about you're not doing so much about defense. So that I never heard a question. And then, of course, we start to investigate, okay, there's a clear demand for it and our policies as such may not reflect us so much. But the way we have used those policies for the last decades, if you do so little, start to be more to do something, well, let's not do it. So we don't do this, we do this and if someone comes, we go to this.

So you build sort of a collective memory not to do it unless there is an absolute need. And at some point, it clocks on the system. So you need to really start with the top from the top. We're open. We need to just our policy. So let's make clear what is possible rather than writing down what is not possible. So have a way that you write about it.

And we also then build up a sector expertise, [indiscernible] because you need to build up expertise to understand what are they buying and what are the structures. And if you talk about new technologies, about drones or protection gear, what is it then and who then buys that and what is the business model of that, you need to understand what is actually about.

And how can you collaborate them between governments and actual credit agencies and guarantee providers? How can we do it in an ecosystem, if you like, with transition finance, new technologies basically to understand how does it all work. And that sector of expertise sits in France.

Not many people.

It's only a few people, but those people sit there. But then in each country, we also have a dedicated people who also then only focus on defense and greatly that ecosystem builds on that capability. Same as with TMT or with infrastructure or real estate. You start with a small group, each of the companies which are active, you also have a person to act and gradually, you build up a collective knowledge and then you write sector policies. And based on sector policies, you get the world behind you. So why is the France because France has a more pronounced defense industry. So there are people who by nature know more about defense than people just knowledge of the country about [indiscernible].

Good morning. This is Laura, welcoming you to ING's 4Q 2025 Conference Call. Before handing this conference call over to Steven van Rijswijk, Chief Executive Officer of ING Group, let me first say that today's comments may include forward-looking statements such as statements regarding future developments in our business, expectations for our future financial performance and any statement not involving a historical fact. Actual results may differ materially from those projected in any forward-looking statement. A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission and our earnings press release as posted on our website today.

Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities. Good morning, Steven. Over to you.

Thank you very much, operator. Good morning, and welcome to our results call for the fourth quarter of 2025. I hope you're all well, and thank you for joining us today. As usual, I'm joined by our CRO, Ljiljana Cortan; and our CFO, Tanate Phutrakul. And today, I'm proud to walk you through another year of outstanding commercial growth and financial performance driven by [audio gap] and I will also share our updated and upgraded outlook for 2027, which further underlines the strength and resilience of our business. After that, Tanate will give you more insight into our income and cost expectations for 2026 and present the quarterly financials. And as always, we will be happy to take your questions at the end of the call. And with that, let's now move to Slide 2.

This slide highlights the continued commercial momentum we saw in the fourth quarter with outstanding growth across all key markets. We added more than 350,000 mobile primary customers during the quarter, bringing total growth for the year to over 1 million, fully in line with the ambitious target we set at our Capital Markets Day. Loan growth was also robust with absolute growth doubling versus the prior year and resulting in an 8.3% increase since the start of the year. In the fourth quarter alone, Retail Banking delivered EUR 10.1 billion in net core lending growth, driven mainly by residential mortgages. Wholesale Banking added EUR 10.3 billion, supported by strong demand in lending and working capital solutions as our clients' financing needs increased.

We also saw healthy deposit development. Core deposits rose by EUR 38.1 billion for the full year or 5.5%. In the fourth quarter, Retail Banking contributed EUR 11.3 billion, benefiting from targeted campaigns and normal seasonal inflows and Wholesale Banking recorded a small net outflow, mainly due to lower short-term balances in our cash pooling activities. Fee income also continued the positive trends. For the full year, fees grew by 15%, supported by continued customer growth and increased cross-sell, essentially doing more business with more customers. And the fourth quarter also included a one-off benefit of EUR 66 million.

All of this translated into very solid financial results. Our return on equity for 2025 was 13.2%, well above the guidance provided at the start of the year. And finally, we remain fully committed to supporting our clients in their sustainability transitions. Our total sustainability volume mobilized reached EUR 166 billion for the year, representing a 28% increase versus 2024. Now let's move to the next slide to look at how the commercial momentum drove our financial performance. On Slide 3, you can see that commercial NII remained very strong at EUR 15.3 billion.

This result was supported by the significant increase in customer balances, both on the lending side and in liabilities. The volume growth largely offset the expected margin normalization. Fee income was also strong, increasing 15% compared to 2024, and they now account for 20% of total income. And this reflects structural drivers such as customer growth and increased cross-sell. Investment products performed particularly well with strong increases across all metrics, the number of customers, assets under management and the number of trades.

And taken together, the strong NII and fee performance fueled total income growth, which reached a record level for the third consecutive year. And with that, let's now move to Slide 4. On this slide, we highlight actions taken to strengthen operational leverage, reinforcing our disciplined approach to cost management. We continue to invest in growth and diversification while increasingly leveraging new technologies. We were able to offset these investments by enhanced operational efficiency as the model becomes more scalable. In 2025, for example, we reduced customer friction by increasing the share of customer journeys handled without any manual intervention.

We also introduced our chatbot in several retail markets, providing customers with faster and more accurate answers in their questions and resulting in annual savings as a large part of the chats are resolved without any human support. These improvements have contributed to a customer experience that is highly appreciated as reflected in our strong NPS positions across all markets. In retail banking, we maintained our #1 position in 5 out of 10 markets. And in Wholesale Banking, we achieved an NPS of 77, demonstrating both the quality of our client service and the value of our continued investments in expertise and sector knowledge. And our investments in scalability are also translating into higher efficiency, and this is visible in our FTE over customer balances ratio, which has improved by more than 7% since 2023.

Then we move to Slide 5, where we show how our robust commercial growth, strong development of total income and proactive cost measures have resulted in strong capital generation. Over the past year, we delivered more than EUR 6.3 billion in net profit, contributing almost 2 percentage points to our CET1 ratio. And of this EUR 6.3 billion, 50% is distributed as a regular cash dividend, offering shareholders an attractive and predictable cash yield. Around 50% of the capital we generated has been used to fund profitable growth across our markets, and this percentage would even have been higher without the steps we took to optimize capital efficiency in Wholesale Banking, such as the 2 SRT transactions completed in November.

Finally, we announced additional distributions to a total amount of EUR 3.6 billion, which also helped bring our CET1 ratio closer to our target level. And on the next slide, I will show how these distributions have resulted in a higher, highly attractive shareholder return. And then we move to Slide 6, where we summarize the total distributions to shareholders, and I will build on what I just discussed. In line with the distribution policy, we have consistently paid cash dividends and have been executing share buybacks for several years. Together, these actions have consistently delivered a highly attractive yield, including in 2025, a year in which our share price increased by almost 60%.

The share buyback program we announced in November is currently underway and is expected to be completed in April 2026. And in addition, we paid out EUR 500 million in cash earlier in January, which helps us to meet the cash hurdle for this year, now finalized at EUR 3.3 billion. Looking ahead, we remain fully committed to delivering strong shareholder returns, and we will provide an update on our capital planning with our first quarter 2026 results. And now starting on Slide 8, I will guide you through how our strategy continues to accelerate growth, increase impact and deliver value.

Now on this slide, I'm talking about Slide 8, we highlight our key strategic priorities supporting our Growing the Difference strategy, building on our successes over the past years. Firstly, we will continue to grow and diversify our income by adding more customers and doing more business with them. And a good example is the further expansion of our investment product offering. We have also introduced a subscription model for retail clients in Romania, and we will roll out this concept in other markets as well, which will help grow income from daily banking services. Our affluent customer base continues to grow rapidly, and we see further growth potential, and we're targeting this with dedicated propositions designed specifically for their needs.

We're also stepping up our engagement with younger generations. For example, we introduced new products for Gen Z, including an investment fund focused on improving financial awareness within this group. And in business banking, we successfully launched our propositions in Italy and Germany, where we are seeing strong and ongoing customer growth. And in Wholesale Banking, we are expanding our range of fee-generating capital-light products to support sustainable and diversified revenue growth. Now secondly, we will further improve our operational leverage by scaling processes, people and technology while maintaining strict cost discipline to further utilization and scale of Gen AI will enhance efficiency and will help us to reach our FTE over customer balances target ahead of schedule.

Finally, we remain firmly focused on generating strong capital going forward, and our allocation priorities are well defined in that regard. We will maintain an attractive shareholder return supported by a 50% payout policy. Secondly, we will continue to invest in value-accretive growth, diversify income streams as fund the loan book and a capital-efficient way and consider M&A opportunities that meet our criteria. And thirdly, we will return any capital structurally above our CET1 target to shareholders. We will also further increase the capital we allocate to retail banking and optimize the capital usage in the Wholesale Bank and note that we have already increased the capital allocated to retail banking to 54%.

And with our strategy, we are confident in our ability to become the best European bank. And with this confidence, we have raised our expectations for the coming years. And then we move to Slide 9. And then I'll present our outlook for '26 and '27. And for 2026, we expect total income of around EUR 24 billion, and this outlook is supported by continued volume growth and an anticipated 5% to 10% increase in fee income. Total operating expenses, excluding internals -- sorry, incidentals are projected to be in the range of EUR 12.6 billion to EUR 12.8 billion. We will continue to manage our CET1 capital ratio at a target of around 13%.

And in addition, we will transition from a return on equity metric to return on tangible equity. And for the full year 2026, we expect an ROE of 14% and ROTE to be higher than 14% and note that the delta between the 2 metrics was around 40 basis points, 40 basis points in 2025. Then looking ahead at 2027, we are introducing a new outlook for total income. We now expect it to exceed EUR 25 billion, which is at the upper end of our previous target range. This income number includes a higher fee income outlook, which we now expect to exceed EUR 5 billion in 2027. And we've moved away from the cost/income ratio and instead provide a clear hard outlook for operating expenses, again, excluding incidentals of around EUR 13 billion, 13.

And this reinforces our continued focus on cost discipline and operational efficiency. And taken together, this outlook translates into a return on equity of 15% and a return on tangible equity of more than 15%. And now I'll hand over to Tanate, who will give more insight on our outlook for 2026 and who will walk you through the fourth quarter financial results in more detail, starting on Slide 10.

Thank you, Steven. As this is the last time I'll talk you through these numbers as the CFO of ING, I'm very pleased that I can close on such a strong result and provide you with an upgraded outlook. On Slide 10, let's start with commercial NII, which will benefit from increasing support from the replication portfolio. We also assume continued customer balance growth of around 5% per year, above the guidance that we gave at Capital Markets Day and reflecting the commercial momentum in our franchises. The liability margin is expected to be at the lower end of the 100 and 110 basis point range, while the lending margin is assumed to remain stable compared to the fourth quarter.

Fees are expected to grow by a further 5% to 10%, building on the strong performance we achieved in 2025. All other income is expected to be around TRY 2.8 billion, excluding incidental items. This is driven by continued strong performance in financial markets, while in treasury, we expect less income from foreign currency hedging given the current lower interest rate differential between the euro and other currencies such as the U.S. dollar and the Turkish lira. Based on the current rate environment, taking 2024 last quarter as a run rate would be a fair starting point. Taken together, total income is expected to reach around EUR 24 billion in '26. And then on the next page, I'll walk you through the drivers behind the expected cost development.

We expect total annual cost to be in the range of EUR 11.6 billion to 11.8 billion, excluding incidental and regulatory costs. The main driver of the increase remains inflationary pressure, which will again predominantly impact staff expenses. We will also continue to make selective investment to support business growth and further improve efficiency, as Steven highlighted earlier. These investment costs will be more than offset by operational efficiencies driven by increased scalability of our processes, people and technology, further utilization and scaling of Gen AI and continued optimization of our footprint.

Given the strong income outlook, this modest cost growth results in a positive jaw for the year. Now let's move to the quarterly financials starting on Slide 13. On Slide 13, you can see that our commercial NII increased driven by very strong volume growth and a slightly higher lending margin, while the liability margin remained stable. Fee income continues its upward trend, driven by customer growth and strong performance in investment products and insurance. This is more than offset by lower fee income in wholesale lending. As a reminder, fee income in the fourth quarter included a EUR 66 million one-off in Germany.

All other income was supported by continued strong results in financial markets, although seasonally lower compared to the previous quarters. As a whole, total income came in 7% higher than the same period last year. Now moving to Slide 14, where we will show the development of customer balances. As you can see, we delivered another quarter of strong loan growth across both retail and wholesale banking. Net core lending increased by EUR 20 billion. Retail banking contributed EUR 10.1 billion, driven by continued mortgage growth. increases across both business lending and consumer lending portfolios.

Wholesale Banking also posted strong growth of AED 10.3 billion, reflecting strong performance in lending and somewhat elevated client demand in working capital solutions. On the liability side, core deposit increased by 9.5 billion. Retail banking drove the bulk of the growth, particularly in the Netherlands, Spain and Poland, which benefited from targeted campaigns and seasonal inflows. Wholesale Banking saw a small net outflow as increased deposit volume in PCM were more than offset by lower short-term balances in our cash pooling business. The other category of deposits were impacted by seasonal reductions in treasury.

On Slide 15, you can see that the commercial NII grew by more than EUR 100 million quarter-on-quarter and was almost 5% higher than last year. Lending NII was up EUR 75 million in the fourth quarter, driven by volume growth and a 1 basis point improvement in lending margin to 126 basis points. The liability NII also increased by EUR 30 million, supported by sustained volume growth in retail banking and higher net interest income from our cash pooling business and PCM in Wholesale Banking. Turning to Slide 16. Fee growth remained strong, increasing 22% year-on-year. Excluding the EUR 66 million one-off retail banking fees in Germany, fees grew by 17% compared to last year.

This was driven by structural factors such as continued customer growth, significantly higher insurance fees and increase in daily banking fees. Investment products also performed really well across several metrics. For example, 9% growth in customers, 16% growth in assets under management, of which roughly half came from net inflows and 22% more trades. Although wholesale banking fees decreased sequentially, wholesale still delivered a strong quarter, supported by solid results in Financial Markets and Corporate Finance. Slide 17 shows the development of all other income. Income in Financial Market is mostly driven by client activity. We continue to support our clients through volatile market conditions, mostly with foreign exchange and interest rate management.

Treasury was impacted by lower results from foreign currency hedging. Next, Slide 18. Expenses, excluding regulatory support growth. The decrease is mainly driven by structural savings from previous restructuring and VAT refunds recognized in the fourth quarter. These effects more than compensated for wage inflation and ongoing investments in customer acquisition and product development, including expanding our offering for new customer segment. Regulatory costs include the annual Dutch bank tax, which is always fully recognized in fourth quarter and then allocated across segments. Incidental item related mostly to restructuring provision for planned FTE reductions in corporate staff and retail banking. Once these are fully implemented, these measures are expected to generate approximately EUR 100 million in annualized cost savings.

When excluding these incidental items, we ended the year with expense below the outlook range we provided earlier. Now let's move on to risk costs on the next slide. Total risk costs were EUR 365 million in the quarter, equivalent to 20 basis points of average customer lending. This is in line with our through-the-cycle average. Net addition to Stage 3 provision amounts to EUR 389 million, mainly driven by individual Stage 3 provisioning for a number of new and existing funds in the wholesale bank. This was partly offset by releases of existing provision due to repayments, secondary market sales and structural improvements. As a result, the Stage 3 ratio increased slightly. For Stage 1 and Stage 2, we recorded a net release of $24 million, reflecting a partial release of management overlays and updated macroeconomic forecast.

Overall, we remain confident in the strength and quality of our loan book. On Slide 20, we show the development of our core Tier 1 ratio, which declined compared to last quarter. Core Tier 1 decreased, reflecting the 1.6 billion distribution that was partly offset by the inclusion of our quarterly net profit. Risk-weighted assets increased by USD 4.5 billion this quarter. Credit risk-weighted assets rose by 1.5 billion, excluding FX impact, driven by volume growth. This was offset by the risk-weighted asset relief from 2 SRT transaction executed in November. Operational risk-weighted asset increased by EUR 2.2 billion, while market risk-weighted asset increased by EUR 0.5 billion.

We'll pay a final cash dividend of EUR 0.736 per share on the 24th of April 2026, subject to our Annual General Meeting's approval. Now I hand back to Steven to wrap up today's presentation.

Yes. Thank you, Tanate. And for the ones who have been here longer with us, this is Tanate's last analyst presentation. We have been knowing each other today for more than 25 years, and we've been in the Board together already for 7 years and more. So thank you very much for working with us all these years. Tanate will still be with us until the AGM of 2025, which will take place in April. But I just want to take the opportunity also here to thank Tanate, also for the friendship, also for the leadership and the sharp mind that you have here with us. And I'll come sure visit you when you're back in Thailand at some point. So prepare for that.

Now we move to Q&A, but let me recap the key takeaways from today's presentation. We have delivered another strong quarter end year, successfully executing our strategy, accelerating growth, increasing impact and delivering value. We achieved a record total income for the third consecutive year. We maintained cost discipline and operational efficiency gains, and they more than offset our investments in business growth. And we delivered another strong year of capital generation and returns, enabling continued attractive shareholder distributions. And with our strategy, we remain confident in our ability to stay on track to become the best European bank.

And with this confidence, we have upgraded our expectations for the coming years with a very strong outlook for 2026 and a more ambitious but realistic outlook for 2027. And with that, I would like to open the floor for Q&A. Operator, back to you.

[Operator Instructions] We will now take our first question from Benoit Petrarque of Kepler Cheuvreu.

All the best. I guess you will not miss the Dutch winter, but in Thailand.

So it's an interesting time to live actually. It's the first quarter I actually see the volume growth benefiting fully the commercial NII as the negative effect of lower interest rates is getting smaller. I was wondering on the guidance of EUR 25 billion total income, what type of assumption do you take on growth? I think you've put somewhere in the slide 5% volume growth. I was wondering if that's the right number, given you are growing actually more than 5%. And also second question is on liability margin assumptions in your more than EUR 25 billion total income. Wondering where you stand on '27 on liability margin.

And then maybe on Wholesale Banking, where are you on the risk-weighted assets growth plan for the wholesale? I think you were planning some optimization there. But I do see wholesale growing quite sharply again in the fourth quarter. So where do you see growth in wholesale going forward?

All right. I'll take -- thanks, Benoit. And yes, Tanate, for sure, will not miss the Dutch winter. Neither would I, by the way, if I would go to Thailand. But in any case, I'm here. If we look -- I will talk about the question about RWA and Wholesale Banking and also -- and then Tanate will talk about the NII and the growth for '26 and '27. So if you look at Wholesale Banking there we have been seeing good lending growth in the second half of this year, and the pipelines are also filled well now. So we want to continue to grow there as well. At the same time, to your point, we did 2 SRTs in November that had an impact of around 12 basis points on our CET1.

For '26 and '27, by the way, we want to continue to do these SRTs. So we have just started with our more improvements that we have been making. So the first ones we did at the end of last year. This year, we continue to do SRTs, and we expect that to have an impact -- a positive impact on CET1 of 15 to 20 basis points, so a bit higher than we realized over 2025. Tanate?

Yes. Thanks, Benoit. I think in terms of the major assumptions we use in terms of giving out outlook, we have assumed 5% balance growth, and you say that, that is potentially conservative given what you see in Q4. I think what Q4 shows us is it gives us more confidence in achieving our target. That would be the first answer. The second one is really what curve did we use in terms of our projection. We use the December curve to do that projection, which is quite constructive in our view. And then the third margins.

I think the 3 impacts that you see is really the continued reduction in the short-term replication negative impact on our results, the continued positive accretion because of long-term replication and the effect of deposit rate cuts that happened in 2025 that affects '26 and will continue to be accretive going into '27 as well. Our forecast for liability margin is on the lower end of the 100 to 110 basis points.

This is also for '27?

I think we don't give that outlook there. But I think if you see the replication on Page 30 that we show, the momentum continues to accrete in '26 and '27.

And we'll now take our next question from Benjamin Goy of Deutsche Bank.

My first question is on loans versus deposit growth. So another strong quarter of loan growth in particular, and I think it's the third quarter where your core lending growth has clearly outperformed core deposit growth. Is that something that you need to work on to be more balanced? Or are you happy to increase your loans faster as there are opportunities? And then secondly, on the costs, for the underlying cost guidance, but there has been historically a bit of incidentals every year. Should that now be smaller than in '25 going forward? Or what's best to assume for the incident that come on top of the cost guidance?

Yes. I think that on the loans versus deposit growth, I mean, if you look at 2025, the loan growth was about 8%. The deposit growth was about 6%, so EUR 57 billion against about EUR 38 billion. We've also seen years where that was the other way around. In the end, you want to balance the balance sheet. So long term, we want to approximately have same growth over a longer period with loans and with deposits. But 1 year can be a bit higher in loans and 1 year can be a bit higher in deposits. I think on both sides of the balance sheet, we see continued good growth with people continuing saving.

Also, if you look at the deposit growth projections macroeconomically in the markets in which we are active, we continue to see that. And we do see significant loan growth in the different segments in which we're operating, most notably mortgages. But there, in the end, we want to balance the balance sheet, and we will always work on that. When we talk about the incidentals, yes, look, we will -- we continue to work on our cost discipline as we do. So on the one hand, we want to grow our customers, and we want to grow and diversify the activities in which we are active. And you've seen us doing that.

We invest in more specific segmentation in existing retail segments. We have been rolling out business banking, for example, in Germany and Italy. We have been investing in diversifying our capital-light income in wholesale banking and transaction services and in financial markets. At the same time, we have seen since 2023, our FTE over balances decreased with 7%, and we believe we can reach our target that we gave in the Capital Markets Day in '24 of a decrease of 10% earlier than we anticipated what we then said in 2027. So we'll work towards this year. So we will work on both levers. But we always do this in a buy-side thing. So what you've seen, for example, with restructuring costs in 2025, those restructuring costs should deliver us a benefit of EUR 100 million in 2026.

And each time that we have a process or area where we can realize better servers, better process optimization, better digitization, better use of Gen AI, then we will announce it because I just want to make sure that front to back, once we announce it, we can execute and we can execute while continuing to grow, and that's how we have been operating for the past 5 years, and we will continue to do so.

And we'll now move on to our next question from Giulia Miotto of Morgan Stanley.

Thank you for your patience answering our questions and all the best for the life after ING. But now I have 2 questions, please. So the cost outlook beyond '26, '26 looks quite a bit better. I think it's encouraging to see operating jaws being able to grow the costs much less than the revenues. Should we expect this trend to continue also in 2027? Consensus has got 3% year-on-year growth. I guess, I don't know what we are seeing could suggest something better than that. And then separately, Steven, I wanted to pick your brain on M&A. We have seen some headlines on Romania, but also Spain and Italy have been in focus in your comments, although we don't see much actions. So any comments on what you're thinking strategically on the M&A front?

All right. On M&A. So look, we show good growth. You see that both in existing activities and also in diversification on the various fronts, both in lending and in fees, by the way, on investment products and insurance. Still, and I've said this before, we've also started with filling in the blanks in countries where we don't have all activities, such as business banking and private banking and certain types of investments in asset management in certain countries. Still, if we can accelerate that growth by means of acquisitions, then we will look at it. You've seen us taking a financial stake in private banking of [indiscernible] last year.

In the fourth quarter, we announced buying the majority and thereby in the end 100% of an asset manager in Poland, integrating that asset manager into ING, we bought that from Goldman Sachs, the 55%. And we continue to look. We don't comment on individual markets. Also in Romania, what I can say is that the business is successful. We have been increasing the numbers of customers that we serve. We have been growing, again, also lending deposits and fees. And we have a very strong return on equity there. We consider ourselves one of the most successful, if not most successful bank in that country. But also there, if we can have opportunities to increase scale or add segments that we do not have, we will look at that as in any other market.

And then the caveat, it needs to fit. It needs to add to that local scale and diversification, and we want it also to be accretive for shareholders, and that's the construct in which we're working and which we are willing to consider M&A. Tanate, the jaws.

Yes. I think given the outlook, we have now turned the corner in terms of positive jaw for '26, and we're confident that we'll continue that positive jaw in 2027. If you look at the 3 drivers of our cost growth in '27, the first one is inflation impact, which we expect that the stickiness of inflation impact should moderate in '27 compared to '26. We will continue to invest in our franchise in client acquisition. In fact, if we can do more, we would do more in terms of accelerating our client acquisition. We have some big programs in terms of investment, financial market infrastructure, payment capabilities, investing in segments that we are not currently present, as Steven has mentioned. And if you have seen in our '26 guidance, we upgraded our ambition in terms of cost reduction from 2% to 3%. So that trend is expected to continue into 2027 as well.

So I take away that probably growth will be more modest than what is to be expected in '27?

You can do your analysis, Giulia. We've given our guidance.

Tanate Didn't even blink when he asked that question.

And we'll now move on to our next question from Tarik El Mejjad of Bank of America.

Tanate, thanks for the very interesting interactions we had all these many years and good luck for what's to come. Just from my side, 2 quick questions, please. With a follow-up one on the liability margins more in 2027. I mean just trying to back solve a bit what market expects, assuming asset margin are quite stable or growing a bit the volumes, we can put your assumptions with even some extra buffers and replicate portfolio, we kind of understand now how it works and so on.

It's just the -- in my view, is it fair really to think that the gap between -- I mean the downside potential risk is for the market expect consensus is too optimistic, perhaps, assumptions of rate cuts or no rate raise in the core saving deposits in '27? Because if you use the forward curve as of December, clearly, you would also take a view on what's your ability to navigate the core savings deposits in Netherlands and other markets. And the second question is on costs is more really to want to understand how you think about the investments because, I mean, you have some headroom now created on the revenue side, higher growth and very comfortable to reach your targets.

And then on the cost, the pressure from salary negotiation should come down with inflation. So that extra headroom, I want to understand how you think about the next 2 years in terms of investments in AI and tech. I mean, yes, you have the machine learning and with the compliance aspect, the Gen AI that you've already started to roll out with some early benefits we see. But what about the next step in AI and tech? And how much of more investments needed to deliver your ambition on that front?

Let me take the question, Tarik, on AI and then Tanate will talk about the margins. Look, I mean, we do clearly see benefits of AI coming through. I mean we have been working with AI already for a decade and then with Gen AI, we work with that in the last couple of years. But there, you see both on, let's say, the -- on the client side and on the operational leverage side benefits coming through. And let me give you a few examples. If you look at [ PI ] onboarding, the STP increased last year from 66% to 79%. So that means that close to 90% of our private individual clients were onboarding through STP. We do end-to-end [indiscernible] delivery. We increased that approvals with 11% last year. So the time to [indiscernible], therefore, improved. We do about 60 million in customer lending without manual intervention. So you see a number of customer benefits coming through.

When we talk specifically about GenAI and also in chatbot, we have better scores, CSAT scores, which are sort of satisfaction scores for our customers. So we do see benefits coming through for GenAI, both on the revenue side, doing more with our customers and having more satisfied customers and on the operational leverage. We do that in 5 areas at current. So we took the 5 big wins that we see starting with contact centers, in IT, coding, in lending, in personalized marketing and in KYC. So those are the big areas. We do these benefits, we see them coming through.

Every quarter, you see announcement, you've seen announcements whereby we say, okay, what impact does it have on our staff, what impact does it have on our operations? And you see it also coming through in FTE over balances. And we're actually quite optimistic on the impact it will have on our operational leverage going forward for '26 and also in 2027. And we will make announcements as we move along and when we can say this is now the next step that we will take, including, of course, good reskilling of our staff and making sure we can grow and continue to grow our franchise sustainably.

And Tarik, to your second question, I think we also see based on the December curve that the accretion and replication in '26 going to '27 and '28 are quite strong. The real debate is what -- how do you balance that additional revenue in terms of margins and in terms of mix, right? And what we see is that we are looking at the dynamics of maintaining growth in customer growth in volumes and making sure that we take into account the level of competition we see in the market.

And if you look pre negative rates environment, ING operated on a liability margin of around 90 to 100 basis points. We have updated our guidance to 100 to 110. And we think we're comfortable with that rate given the balanced dynamics of growth, competition and to be remaining competitive while at the same time, being accretive to our shareholders.

I mean I don't want to put words in your mouth, but basically, to deliver on the consensus or market numbers means that market has to be much more bullish on the volume growth and lending and probably be less positive on the margin side. But I'm just trying to reconcile a bit what your guidance outlook, which is very helpful versus where market is positioned.

And we'll now take our next question from Delphine Lee of JPMorgan.

Also I want to take the opportunity to send my best wishes to Nate, thank you for everything. So my 2 questions. First of all, sorry, I just want to follow up on Tarik and other questions around NII. But -- so if we look at your guidance for 2026, which implies about EUR 600 million increases for liability margins.

But if you look at the repricing actions that you've done in '25, I mean, the impact on '26 is already EUR 700 million. And then on top of that, you have some small benefits from -- well, your replicating income as well on '26 more, but like still. So I'm just kind of wondering like what is your current assumption and in terms of the deposit cost and deposit pass-through from 42% in Q4? And if you could just sort of elaborate a little bit on what are you seeing on competition on deposits at the moment? What do you expect for '26 and onwards?

My second question is on cost. So you've done a good job of trying to kind of contain a little bit of inflation with the savings. I'm just trying -- just trying to understand a little bit if 2%, 3% is really kind of like the run rate that we should expect like even beyond '27. Is that something that you're trying to achieve in the long run? Yes, just trying to understand a little bit the moving parts of that cost number, you've provided this for '26, but even beyond that, like what are the savings? You've mentioned a couple of benefits from FTE reductions, but just kind of trying to quantify a little bit what else can we expect in the long run?

All right. Thank you very much. I think that on the costs, you see the effects of our digitalization and scalability now really seeing take shape. And we saw that now also in the fourth quarter, but also I'm pointing again at FTE over balances. You also now see that when we look at 2026 about the operational leverage and efficiencies that we have compared to the increase in investments. So the operational efficiencies are higher, and that's where we want to be. We want to make sure that when we make additional investments, we can have operational leverage that is higher than that.

So that's maybe a little bit of direction to give you or guidance to give you in terms of where we want to end up. And indeed, therefore, you will see in '26 and '27 improved cost to income to what we have been showing and positive jaws territory that we have now been gotten into and I want to stay in that territory. And at the same time, we continue to want to grow our investments where we can grow our clients for long-term clients and shareholder benefit. But that's a bit of guidance towards the cost. Then Tanate, on the deposit cost of margins?

I think we gave a bit of detail on Page 20 of our presentation showing the movements in terms of commercial NII. I think the lending NII is driven by basically stable margin and approximately 5% loan growth. And similarly, for liability NII, we also assume 5% liability growth. Of that EUR 600 million we show, part of it is due to volume, about half. The other half is through the improvement in margins. As you say, the replication is getting better, but there's some short-term impact that still need to feed through our numbers and the EUR 700 million is factored into that guidance.

And we'll now take our next question from Namita Samtani of Barclays.

The first question I have is on German retail. There's quite a lot of cost growth in 2025 there. I think it's around 11% year-on-year, and it's a lot higher than other regions. So I wondered what are you exactly spending on in Germany? And is this defensive spend given the new players entering the market? And then I think about your liability margin, which is, of course, at group level, but are you telling us that we're at peak earnings for Germany in retail given high expense spend and [indiscernible] spend to gather deposits?

And my second question, based on your updated '27 targets today, the cost to income implied in '27 is maybe 51%, 52%. It's hardly a standout amongst European banks, even ABN is now going to below 55%. I just wondered, given the digital model ING has or aspires to have and the use of AI, what's holding the group back from delivering a better cost to income target?

Yes. Thank you very much. On the cost to income side, our main opportunity is to grow our revenues, our revenues over our client balances, our diversification in Wholesale Banking, our revenues over RWA and as a result, but that's then a consequence of it also that will have a positive impact on our cost to income. But what we need to do, that's why our strategy is called Grow the Difference is grow our revenues because that's where we can make the biggest difference in further improving our returns and then indirectly also our cost to income. And so the digital model has brought us a lot in terms of presence in markets, but that's why we're talking about doing new activities in these markets or doing more with customers in these markets because that is the next step in our evolution, what we're currently doing. Tanate?

Yes. The German cost/income ratio is a robust one despite the increase in investments that we make in Germany. One thing that you have to remember is that the client growth that we have, 1 million customer per year, a very significant portion comes from Germany, which is our main market. So that's why the investments in client acquisition, in creating new products, creating new segments is very strong in Germany. very, very much like the rest of ING seeing a turnaround in terms of the momentum in terms of revenue and cost in Germany. And we do expect that the positive jaw will return to Germany in 2026, while continuing to invest in our franchise, both in terms of the fundamental platforms as well as client acquisition.

And we'll now take our next question from Cyril Toutounji of BNP Paribas.

So I've got 2. One on lending margin. So we had an improvement this quarter, which is welcome and I think pretty good news. And you're saying it's due to mortgages. I'm just curious in which market has happened? And if you can give us more indication whether this can continue maybe a bit? And the second one would be on deposit campaigns. Can you update us on the ongoing campaigns right now? And I don't know if you can give this indication as well, but should we expect more or less campaigns versus the 2025 run rate?

Yes. Thank you, Cyril. I'll take the question on deposit campaigns and Tanate talks about the lending margin. So yes, about the deposit campaigns, look, we have these campaigns regularly. We had them also in the fourth quarter with Black Friday in some markets or in Germany, as they call it Black Friday. So we will continue these campaigns, and we typically see that there's a good response in getting either new money from existing clients or getting new clients in.

And then typically, we see that we get money to stick to around 2/3 of the money that after campaigns will stick with ING and therefore, we can gain new primary customers and increase our deposit levels. So for us, that works well. And what we work on every time is we make them more bespoke to certain customer segments and we make them more data-driven, so we can target them more and more. So we are very happy with the approach we've taken. We are confident about what we are doing, and we will keep on having these campaigns and we make them more bespoke about a year. Tanate, about the margins?

Yes, So I think we are also pleased to see that we have stabilized our lending margin and that it's improved by 1 basis point. And to your specific questions on mortgage margin, it's been stable or increasing across the board. I think some of the markets where the new production margins are improving is in Belgium, increasing in Germany, increasing in Italy and Spain. So it's quite widespread in terms of margin improvement, but we do see a bit of pressure in terms of new production margin in the Netherlands.

We'll now take our next question from Johan Ekblom of UBS.

Thank you for everything, Tanate, and best of luck. Just most questions have been answered. But at the Capital Markets Day, we spoke a lot about the business banking opportunities, and I guess, in particular, in Germany. How should we, from the outside, try and measure your success there? Because it's very difficult to track where you are in terms of the rollout and I guess also when you are expecting to see volumes start to come through in a more meaningful way. So any update on kind of how the business banking rollout in Germany is going would be much appreciated.

Yes. Thank you very much, Johan. Indeed, business banking is one of the levers that we pull to diversify. To give you a few data points, we -- the third largest growth we had in business banking customers in terms of number of customers this year was Germany. So that already shows you that we're starting to grow quite well in Germany. It starts from a very small base, obviously, because we started from virtually 0. So that's one. Two, we also get very good deposits in from our business banking customers in Germany, so also there. So increasingly, that will become more sizable.

But compared to our business banking franchises in the Netherlands and Belgium, for example, of course, it is very minimal because we have EUR 114 billion business banking lending book. And in Germany, we're just starting. So that will take time. But it is almost like you saw with the insurance fees there you see in the fee income line, as an example, it was not even a separate fee line. And there you see step by step by step, it's almost like a snowball. We do more and more and more. And at some point, it will become a sizable business, and that's also what we see happening in business banking in Germany.

And we'll take our next question from Shrey Srivastava of Citi.

Thank you, Tanate, for answering all the questions over the previous quarters. I just want to look more top down because obviously, following on from previous questions, we've talked about the upside on the replicating income versus your guided liability margin still at 100 to 110 basis points. A, is your sort of 5% volume growth guidance predicated on further deposit campaigns to get you within this 100 to 110 basis points? Or is any sort of upside to volume growth from that incremental to the 5%?

And secondly, what are sort of the hurdle rates you have in mind when thinking about going forward with a new deposit campaign? Because obviously, as you've heard sort of many of us to get from the assumptions we have when plugging your replicating income into the model to the liability margin of 110 basis points would require some sort of pretty significant deposit campaigns. So what are some of the things you think about when deciding to give up that short-term upside for sort of longer-term growth?

All right. Tanate, can you give the elements of our replication income or lease liability margin again?

Yes. I think the 5% deposit growth, I think it's a good base number, right? And I think you look in the context of 2025, where the growth is around 5%. So that trend line, we expect to continue despite competition, despite quantitative tightening. So I think it's a good number to assume 5% growth. Does campaign play a big role in that? It continues to be the case, right, that we have campaigns in many markets we operate in. We continue to use that as a tool, but we also get additional flows coming into the bank all the time.

And what I look at really is the growth in our primary customer, the intensity of which we have a relationship with our customer is there. And I think looking at the replication, it's still the 3 moving parts, right? It's really the impact of the short-term replication still having a tail impact is continued accretion of long-term replication coming through and the actions that we would take in terms of rate increases or decreases over time.

And I think we like to reiterate that we don't give guidance for '27 in terms of liability margin, but we expect it to operate in '26 at the lower end of the 100 to 110, and we're comfortable that we can achieve our target with that guidance.

And we'll take our next question from [ Seamus Murphy ] of [indiscernible]

Sorry, I'm coming back again to a lot of the questions that have been asked in one sense just in terms of the guidance. So I suppose you've guided 16 to -- sorry, EUR 16.3 billion to EUR 16.5 billion for commercial NII in 2026. But in Q4, it was [ EUR 3.928 ] billion. So that suggests an exit rate of just over EUR 4 billion into Q1 2026. That's already in the bag. And if I annualize that, I'm kind of getting EUR 16.2 billion at the start of the year, just before anything else happens and the upper end of your guidance, therefore, only needs 2% growth to achieve the 16.5%.

And obviously, we have -- so I suppose question one, is there anything wrong with the math as you start the year that you have kind of EUR 16.2 billion of NII heading into the -- sorry, EUR 16.2 billion into this year at the start? And the second question then is, obviously, we have growth, so there's only limited growth needed. But the second question then is, you mentioned earlier on the call that the long end of the replication portfolio is a positive further into '26 and '27. Two things have happened.

Your current account balances have grown EUR 5 billion, I think, to [ EUR 175 billion ] now. And secondly is that, obviously, the curve has deepened. So it would be super useful if you could tell us how much the long end of the replication portfolio will contribute in '26 and '27. And the last question, I asked this also on the Q3 call because it's becoming more and more important for banks, I think, is that do you expect FTEs to fall as we look into '27 and '28 at the group level?

Thanks, Seamus, for your questions. Well, we do expect FTE over balances to fall. So this is about, of course, a continuous focus on growth and then on a marginal basis, doing that with less marginal cost. And that's why we use the metric FTE over balances, whereby we continuously accept -- sorry, see an improvement or expect an improvement based on our digitalization and AI and GenAI and better process management as we have been doing over the past years.

And that trend we see continuing. At the same time, we want to grow because we need to diversify and grow our revenues over our balances and our RWA. But from an FTE over balancing perspective, we should see further improvements. Tanate, how does it work with that?

Yes, Seamus, we will see each other in London, so we can go into a bit more detail. But I think it's a dangerous game to take Q4 and then extrapolating it. But I think if I look at full year to full year, the impact is over EUR 1 billion, right? That's a 7% growth in net interest income, which I think is a strong number and strong guidance. And I also -- we don't give replicated income in such details of how much the long end would contribute, except that we have disclosed in our presentation that 55% of our replication is long dated. And I also noted the fact that the drive of our primary customer is driving increasing current account and that increasing current account means better margin. So we do recognize that.

[Operator Instructions] And we'll now move on to our next question from Anke Reingen of RBC.

But firstly, thank you very much, Tanate,and all the best. And then to questions. So firstly, can you just talk a bit about your expectation on lending volume growth in 2026? I guess the 5% applies here as well, but I suppose, Q3, Q4, you've seen very strong growth. So where do you see sort of like the mix falling into 2026? I mean I hear your margin comment, but maybe just more a bit in terms of the mix. And then you commented earlier on about the SRTs of 15 basis points benefit. Can you just clarify, is that per year? Or is that over the 2 years, '26 and '27...

Thank you very much, Anke, for your questions. If you look at the SRTs, the impact in '25 was 12 basis points and that impact remains there. So once we have taken, let's say, the first loss piece of our balance sheet, it will remain [indiscernible] of our balance sheet. But in '26, we're going to do an additional number of SRTs that should benefit an additional 15 to 20 basis points on our CET1.

And we, of course, will then also continue for '27 and thereafter. But on those years, we haven't yet given guidance. When we talk about lending growth, we see good growth across the board, like you've seen in the third and the fourth quarter that both in and mortgages and in Business Banking and Wholesale Banking, we continue to see good growth. The pipelines are good. Clearly, especially with the underlying macro drivers, there is shortage of housing in many of the markets in which we operate, in this case in the Netherlands, that is the case in Belgium, that is in Germany.

That is the case in Spain. We are -- we have a total mortgage book of EUR 370 billion. So we are a top 3 mortgage provider in the region in Europe. And in many of the markets in which we are active, we see there are good macroeconomic fundamentals to continue that growth, low unemployment levels, good salary increase over the past couple of years, shortage of housing, lower number of people in individual households, so an increase in the number of households and those fundamentals continue to be there. And that's why that is going to be a significant driver of the loan growth in 2026 and '27.

And we'll now take our next question from Matthew Clark of Mediobanca.

So firstly, coming back to this EUR 25 billion target for 2027 revenues or greater than EUR 25 billion. I mean, are you trying to talk down consensus there, which is EUR 25.8 billion, I think? Or do you think that's still consistent with the greater than component of that target? So I just want to understand your thinking for framing that target that way against the context of a higher consensus?

And then secondly, on wholesale lending, why is now the right time for you to be putting your foot down on wholesale lending? What's changed in terms of risk reward, et cetera? And I guess asking that in the context of an uptick in credit losses on wholesale this quarter.

Yes. Thank you very much. Well, let me put it this way for 2027. So we said that the revenues are larger than EUR 25 billion. So we are confident about our growth, and we're also confident about '27. So don't forget the larger then sign in EUR 25 billion for '27, but yes, that's where we currently are. And we're very comfortable with that level. When you talk about Wholesale Bank lending, well, look, we had slow quarters in the first half of 2025, and then it picked up very well in the second half of the year.

In the end, what we want to realize in Wholesale Banking is higher revenues over RWA and a higher return over RWA. And in that regard, we have been investing and we are continuing to invest in Transaction Services and Financial Markets. That will help us to drive the diversification in Wholesale Banking and do more with our customers next to lending, but lending, of course, is also good.

And secondly, we're attacking, let's say, our capital there. Our capital was about 50-50 in '24. Now we said for '27, we had a target of 55% in retail and then 45% in Wholesale Banking. It's already at 54% for retail and 46% for Wholesale Banking. So we're on a good path quicker than we initially anticipated. And that's why we continue also to work on the SRTs to make sure that also on the capital side in Wholesale Banking, we can do more with less capital to help with return going up. So it's not a particular focus on lending alone. In the end, we're focused on return.

And we'll now take our next question from Farquhar Murray of Autonomous.

Obviously, congratulations, Tanate and best wishes for the future. Coming back to the day job though for now, 2 questions, if I may. Firstly, please, can you reconcile the indication of EUR 0.4 billion of hedging tailwinds into '26 of 4Q with kind of flat replicating income on a year-on-year basis on Slide 29. Is that simply a matter of how things came through in the quarters? And perhaps can you just flesh that out through '25 and into '26?

And also, is there a quarterly pattern to that hedging impact and also maybe the short-term effects you mentioned earlier? And then secondly, if we look last year, lending outpaced deposits, if we look at the 8% versus the 5% I know you said the kind of planning assumption as a kind of balanced 5%, but what's your general sense about where customer demand is at present?

I think that -- so on the customer demand at present, I mean, we -- actually, we do see continued good mortgage growth, again, because we see the macroeconomic elements that we saw in there, we see them continuing. And therefore, if you look at the number of houses being sold last year in a number of our main markets in the Netherlands, Belgium and Germany, they all have increased. And also, we see increases in a number of these housing markets to continue in 2026 and '27.

So again, we're very positive towards that end. I think in business banking, we have also been improving our processes, and therefore, we've made it easier for our customers to borrow with us. So I think there, it's also an improvement of capabilities that we have had and by the way, rolling out business banking step by step by step in Germany, Italy and potentially also in other markets that we're looking at. We've spoken about Spain before.

And then in Wholesale Banking, it's always more lumpy, funny enough, whereby you do see geopolitical uncertainty on the one hand and the PMI index being relatively low, we've seen sort of a catch-up demand of Wholesale Banking lending in the third and fourth quarter. The pipeline is still good. Yes, probably that Wholesale Banking in that sense is always a bit more choppy in terms of growth than the other elements.

But the main consistent element in the lending growth sits in the mortgage side. Then on the hedging tailwinds, there, I want to give the floor to Tanate.

Thank you very much, Farquhar. I think what we see is that if you look at our quarterly commercial NII, it reached a trough in Q2, improved from EUR 3.7 billion to EUR 3.8 billion and from EUR 3.8 billion to EUR 3.9 billion during the course. So you already see signs of that replication impact. I think what the EUR 400 million refers to is the fact that the short end pressure that we see is decreasing. We see the fact that in Q4, we also have the benefit of the rate cuts already materializing into the numbers and that 55% of the long end is already positive. So it's a combination of all these 3 factors that drives the EUR 400 million tailwind.

And we'll now take our next question from Chris Hallam of Goldman Sachs International.

I just have one question left. And obviously, good luck, Tanate. I'm sure you're going to miss all these questions on replicating income and liability margins when you're relaxing in Thailand. But just on this question on the corporate side, you talked about increasing levels of working capital lending and lower deposits. Are those 2 points linked, i.e., are corporate customers building up working capital and therefore, draining their cash balances in anticipation of higher activity later in the year? And if so, how long should that working capital cycle last for? And would we notice any impact on NII through this year as and when it reverses, either on the lending margin or on the liability margin?

Yes. Thanks, Chris. And yes, Tanate will miss those questions. But luckily, we have Ida Lerner, our new CFO, and she already told me yesterday, said she's really looking forward to all these questions. So next quarter, you can expect her to answer these. On the working capital side, yes, I mean, on the wholesale side, you saw that EUR 10.3 billion lending and working capital solutions growth. So part was indeed working capital solutions. That had to do with a couple of large deals, very large companies doing very large deals, and we were leading those deals. So that doesn't necessarily have a link with each other that those are, let's say, seasonal swings that sometimes you have and sometimes you don't have.

Clearly, those working capital solutions deals because they are typically short term and self-liquidating or collateralized or they have a borrowing base behind it. They have lower margins. But we have many of these. And so that doesn't have a particular big impact on the lending margin. When we talk about the cash pooling business, that's the pooling both in our payments and cash management and the notional pooling business, typically, clients at the end of the year, they will consolidate their positions and net them off. And because they net them off, they net them off in our accounts, and therefore, you see a lower amount coming in there. So a seasonal pattern.

There are no further questions in queue. I will now hand it back to Steven Van Rijswijk for closing remarks.

Yes. Thank you very much. I think we can -- we are very proud of our 2025 numbers and also very confident about '26 and '27, hence, the improved and heightened outlook. And I want to thank you for all your questions and observations today, and again, Tanate, for the fantastic collaboration, and you are a great friend and a great colleague. Thanks very much, everybody, and I hope you have a great Thursday.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

[Audio Gap]

3Q 2025 Conference Call. Before handing this conference call over to Steven van Rijswijk, Chief Executive Officer of ING Groep, let me first say that today's comments may include forward-looking statements such as statements regarding future developments in our business, expectations for our future financial performance and any statement not involving a historical fact. Actual results may differ materially from those projected in any forward-looking statement.

A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission, and our earnings press release as posted in our website today. Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities. Good morning, Steven, over to you.

Good morning. Thank you, and good morning, and welcome to our results call for the third quarter of 2025. I hope you're all well, and thank you for joining us. As usual, I'm joined by our CRO, Ljiljana Cortan; and our CFO, Tanate Phutrakul.

While macroeconomic and geopolitical uncertainty remains prevalent, we have again delivered a strong quarter as we continue to execute our strategy to accelerate growth, increase our impact and deliver customer value. In today's presentation, I will start by sharing further insights in how our capital allocation will continue to fuel growth and increase returns. And I will also update you on our long-term capital target. Thereafter, Tanate will walk you through the quarterly financials. And as always, we will be happy to take your questions at the end of the call.

And now let's move to Slide 2. This slide highlights our continued strong commercial momentum in the third quarter with solid growth across key areas. We have added nearly 200,000 mobile primary customers during the quarter, bringing growth in the last 12 months to over EUR 1.1 [ million ], well ahead of the target set at our Capital Markets Day. Our loan book expanded significantly in both Retail and Wholesale and Retail saw EUR 8.6 billion in net core lending growth driven mainly by residential mortgages. Wholesale Banking also delivered a strong quarter, supported by trade finance services and lending, reflecting increased client financing needs.

Core deposits declined slightly following substantial inflows in previous quarters and this was largely due to the inclusion of promotional campaigns and seasonal spending patterns during the summer in Retail Banking. On the other hand, Wholesale Banking posted strong inflows, particularly in payments and cash management, financial markets and cash pooling.

Customer balances grew at an annualized rate of 7% in the first 9 months of 2025, keeping us well on track to achieve our 4% annual growth target. Fee income also continued upward trend. Year-to-date, fees grew by 12%, and we have raised our full year 2025 growth outlook to more than 10%. Our fourth quarter rolling average ROE stands at 12.6%, and we have also revised our full year ROE outlook upwards. Finally, we remain committed to supporting clients in our sustainability transitions with sustainable finance volumes up 29% compared to the same period last year.

Now let's move to the next slide to discuss what this growth means for our capital generation. On Slide 3, we show how our continued commercial growth, further income diversification and proactive cost measures have delivered strong capital generation. Over the past 4 quarters, we have delivered EUR 6 billion of net profit, which contributed an additional 2 percentage points to our CET1 ratio in line with the 2 prior years. This performance has enabled us to offer an attractive and sustainable dividend with an ordinary cash dividend yield of nearly 6% in the last 12 months, and part of the capital we generated was reinvested to support profitable growth across both our business lines. And finally, thanks to our strong capital generation, we have been able to announce and execute additional distributions amounted to EUR 4.5 billion over the last 12 months and EUR 12.5 billion over the last 3 years.

Then I'll move to Slide 4, where we summarize the total distributions to shareholders, building on what I just mentioned. In our policy, we have consistently paid cash dividends and we have been executing share buybacks for several years. And these actions have delivered a highly attractive yield, while our share price has risen significantly. The EUR 2 billion share buyback program, which started in May this year was concluded earlier this week. And today, we are announcing an additional EUR 1.6 billion distribution. All that amount, EUR 1.1 billion will be returned in the form of a new share buyback, which will have a lasting positive impact on both earnings and dividends per share. And in addition, we will pay a cash dividend of EUR 500 million in January 2026, helping us to meet the expected cash flow for the year. Looking ahead, we remain committed to delivering strong shareholder returns and we will provide you an update with our first quarter 2026 results.

Now let's move to Slide 5, where I will explain the rationale behind updating our CET1 ratio target. So here on Page 5, our expected fully loaded CET1 MDA has risen over a year from 10.5% in 2020 to around 11.2%, primarily due to regulatory changes. And consequently, we have revised our capital target and will now measure our CET1 ratio at around 13%. And this target gives us a buffer of about 180 basis points above the MDA threshold, which we consider appropriate given the resilience of our business model and the fact that a significant portion of the MDA over 1 percentage point is attributable to countercyclical buffers. Any CET1 capital above 13% will be treated as excess and factored into our future capital planning as evidenced by the additional distribution that we announced today.

And in the previous slides, I'm now on Slide 6, I outlined how we have deployed excess and newly generated capital over the past years, delivering strong shareholder returns. And although we are no longer in a position of excess capital, we remain firmly focused on generating strong capital going forward, and our allocation priorities are well defined. First, we will maintain an attractive shareholder return supported by our 50% dividend payout policy.

Second, we will continue to invest in value-accretive growth, further diversifying income streams, expanding the loan book in a capital-efficient way and considering M&A opportunities that meet our strict criteria. And these investments will help us to accelerate growth and enhance earnings potential as the return on new business is higher than a return on share buyback. And finally, we will return any capital structurally above our CET1 target to shareholders.

Moving to Slide 8, where we present our improved outlook for 2025. So far this year, we have added nearly 700,000 mobile primary customers and remain on track to achieve our annual growth target of 1 million in 2025. We have raised our expectation for fee growth and now anticipate fees to come in more than 10% higher than last year. And as a result, we have also increased our outlook for total income, which we now expect to reach around EUR 22.8 billion this year.

Prudent expense management remains a key priority. We continue to take proactive measures to operate efficiently while selectively investing for growth. And despite additional incidental expenses this quarter, we continue guiding total costs towards the lower end of the EUR 12.5 billion to EUR 12.7 billion range. As explained earlier, our CET1 target has been updated to around 13%. And given our improved outlook for income and disciplined approach on costs, we have also raised our ROE expectation for this year to more than 12.5%. We will share our outlook for 2026 and revisit our 2027 targets with the fourth quarter results.

And now I'll hand over to Tanate, who will walk you through the third quarter financial results in more detail starting on Slide 10. Tanate?

Thank you, Steven. Yes, on Slide 10 shows the development of total income, which has increased further this quarter and was close to the record level we achieved 1 year ago. Commercial NII rose by a strong performance in Wholesale Banking Lending and the conclusion of our promotional campaign -- savings campaign in Retail Banking Germany. These factors more than offset the impact of lower average ECB deposit facility rate and a stronger euro.

Fee income continues its upward trend, growing by 15% year-on-year. Most of this growth is structural, which is why we have raised our full year expectations. Finally, all other income, which includes other NII, investment income and other income was supported by continued strong results in financial market and treasury as well as the final dividend payment from our equity stake in Bank of Beijing.

Let's discuss Slide 11, where we show the development of our customer balances. We delivered another quarter of strong loan growth across both our Retail and Wholesale Banking. Net core lending increased by EUR 14.2 billion. Retail contributed EUR 8.6 billion of that, driven by continued growth in mortgages and increasing consumer lending portfolio, primarily in Germany, Poland and the Netherlands. Wholesale Banking Lending also posted strong growth as a relatively large number of deals originated early -- in earlier quarters were converted in the third quarter.

On the liability side, core deposits declined by around EUR 200 million after significant inflows in prior quarters. The decline was largely attributable to outflows in Germany and Belgium after the conclusion of promotional savings campaign. Wholesale Banking posted a strong inflow, reflecting increased deposit volume in payment and cash management area, financial market and the cash pooling business.

On Slide 12, you can see that commercial NII grew quarter-on-quarter. That was -- this increase is particularly strong in Retail Germany's liability NII after the end of the bonus rate for fresh money from a promotional campaign. This was also the main driver behind the 1 basis point improvement in liability margin. Lending NII also in Wholesale Banking Lending, the Lending margin remained stable as the growth in Wholesale Banking Lending offset the impact of continued growth of our residential mortgage portfolio, which deliver higher return on equity but lower average margin.

For full year 2025, our outlook liability margin and lending margin is unchanged at around 100 basis points and around 125 basis points, respectively. We expect commercial NII to come in between EUR 15.2 billion and EUR 15.3 billion. It is worth noting that the higher-than-expected NII growth in the third quarter was partly driven by a large number of transactions in the Wholesale Bank, which has been in the pipeline for an extended period of time.

Turning to Slide 13. Fee growth remained strong with a 15% increase year-on-year, driven by structural revenue drivers across both Retail and Wholesale Banking. In Retail Banking, growth was supported by a continued rise in mobile primary customer, which boosted daily banking fees. Investment products had a strong quarter, reflecting an increase in the number of investment accounts and higher asset under management. Wholesale Banking delivered a quarterly record fee income of EUR [ 383 ] million, driven by strong performance in lending, supported by a greater number of lead roles, increased loan underwriting activities and higher lending volume. Given the strong performance in the first 9 months of this year, we are confident that we can grow our fee income by more than 10% in 2025.

On Slide 14, we show the development of all other income. Income from financial market is mostly driven by client activity. We continue to support our clients through volatile market condition, mostly with FX and interest rate management. Income from our financial stakes this quarter included a final dividend from our stake in Bank of Beijing, while other income also benefited from a gain on sale.

Now on to Slide 15. Our expenses excluding regulatory costs and incidental items rose less than 3% year-on-year, reflecting our prudent approach. The increase was largely reflecting wage inflation and our ongoing investment in business growth and scalability. On the growth side, we continue investing in our customer acquisition and product development, including expanding our offer for new customer segments. Another good example is business banking, where we broaden our product suite and make it easier to digitally onboard customer.

In terms of scalability, we focus on enhancing and strengthening our tech platform. At the same time, we are seeing benefits from operational efficiencies, which help offset part of the cost increase. We remain committed to digitizing our services to further strengthen our operational leverage going forward. We're actively integrating generative AI capabilities through our organization. Our GenAI chatbot is now live in 6 markets, providing [indiscernible]. And in consumer finance, we use AI to assist applications and process loan applications automatically. Incidental expenses mostly related to restructuring provisions booking, which are expected to result in EUR 30 million in annualized cost savings once fully implemented. We still expect total expenses to finish at the lower end of the previously guided range. The outlook includes incidental items recorded in the first 9 months whereby continued focus on operational efficiencies will lead to some incidental costs in the fourth quarter.

Now let's move on to risk costs on the next slide. Total risk costs were EUR 326 million this quarter, equivalent to 19 basis points of average customer lending, which is below our through-the-cycle average and reflect the quality of our loan growth. Net addition to Stage 3 provision amount to EUR 361 million, mainly due to collective provisioning in Retail Banking and a number of newly defaulted files in Wholesale Banking. The Stage 3 ratio remains stable. Stage 1 and Stage 2 risk cost show a net release of EUR 35 million, mostly reflecting portfolio movements. Overall, we remain confident in the strength and quality of our loan growth.

On Slide 17, we show development of our core Tier 1 ratio, which increased compared to last quarter. Core Tier 1 capital increase on the back of strong capital generation, partly offset by dividend reserving and a lower market value of our stake in Bank of Beijing. The total risk-weighted assets broadly stable. Credit risk-weighted assets, excluding FX impact increased by [ EUR 2.2 billion ] mainly due to volume growth. This was partly offset by a change in the profile of the loan book, equity revaluations and various other effects. Operational risk-weighted assets remained flat while market risk-weighted assets decreased by EUR 1.7 billion. The announced additional distribution of EUR 1.6 billion. We have a pro forma impact of 48 basis points on the Core Tier 1 ratio, bringing it more in line with our updated targets.

Now I'll hand back to Steven to wrap up today's presentation.

Thanks, Tanate. And before we move to Q&A, let me recap the key takeaways from today's presentation. We delivered another strong quarter, maintaining solid commercial momentum that is fully aligned with our growth strategy and the sustained performance translated into a robust capital generation, enabling attractive shareholder returns while continuing to selectively invest in our business. Today, we announced a EUR 1.6 billion in line with our updated target. Going forward, we remain committed to deploying capital to fuel growth and further enhance returns. And finally, we have improved our outlook for 2025, expecting higher fees, stronger total income and a return on equity above 12.5%.

And with that, I would like to open the floor for Q&A. Operator, over to you.

We will now take our first question from Delphine Lee.

My first one is on [ capital. ] Just wondering, as you highlighted in your slides, your CET1 requirements have been going up quite a bit. Do you think we are entering like a phase of stabilization from here? Or could there be more pressure? And on the other hand, do you expect anything on -- is there any hope of that requirement going down maybe on mortgage flow? Is there anything like that, just so we have better visibility on how you run your CET1?

And then just on NII and deposits, more generally speaking, the retail deposit options were quite significant this quarter, which there has been some seasonality. Was just wondering a little bit what you're seeing so far in the quarter. And if the trends that you've seen in Q3 in terms of the strength in Wholesale Banking or -- and the liability margin, slight improvement, is there anything that has been confirmed for Q4 so far?

Thank you very much, Delphine. And on capital, yes, we currently do not see additional pressure [ very strong ] on capital. So all the countercyclical buffers and other elements that we could see that could potentially have come and that we have factored into our capital targets. Of course, we continue to talk to supervisors about avoiding duplication or gold plating between different supervisors in different markets. And of course, we also talk about the mortgage floor that could come in, but only in 2032. So that's a long time away, but we'll also talk about that to see if that can be removed, but those discussions are ongoing.

Then on deposits, yes, the outflows are -- there was an outflow of about EUR 7 billion in Retail and an inflow of about EUR 7 billion in Wholesale. So our deposits are approximately flat and minus EUR 200 million. What we can see is that these deposit outflows for Retail came from a marketing campaign predominantly in Germany, which ended and that always leads to part of outflows of the marketing campaign money that we got in. So that is that effect. Also, there was a third quarter effect, which is a seasonal effect, which then is the end of the holidays, and during the holidays, people spend more. So typically, with a higher spending pattern at the start of the third quarter, you also see deposits there coming down. So that's typically for this quarter. That is not a pattern that we would expect in the fourth quarter.

And to date, if you look at the total deposits, we have an annualized growth in the first 9 months of 6%. So we're happy with our deposit inflows during the year.

And we will now take our next question from Namita Samtani of Barclays.

My first question is, how do you expect your lending margins to grow from 125 bps today to the 125 to 130 bps [ guidance over ] 2026 to 2027, given there's a lot of little private credit competition and many banks offering competitive pricing, especially in wholesale. So any thoughts there would be much appreciated.

And secondly, I saw an article on Bloomberg that ING estimated that around 950 positions are at risk in the Netherlands by the end of 2026 as artificial intelligence was rolled out. I know it was just a forecast given to the country's employee insurance agency, but I just wondered why you aren't doing this AI initiative in other countries. For example, the cost income in the Netherlands looks decent compared to Belgium and Australia Retail, where it's 60% to 70%, which looks quite poor.

Thank you, Namita. I'll do the question on the 950 positions, and Tanate will talk about the lending margin. As a matter of fact, this is an announcement that we have to do from the collective -- with a collective announcement. And so this is an estimate that we then officially post with the labor insurance agency as a current estimate of how many jobs will be affected in this country. Now the jobs that are affected are part of it is in Wholesale Banking, as we announced earlier, and parts, it's in our processes such as less manual or personnel work in contact centers and or more digitalization in lending and consumer lending processes. By the way, we do this in the Netherlands, we do this everywhere around the world, so the GenAI chatbot has been rolled out or being rolled out in 6 countries already as an example. But it's just the announcement that we are compulsory to make in this country. It has led to the announcement that is not because we're only doing this in this country, but this pertains employees in this country.

Namita, just on the margin to share mortgage financing in our mix. We do expect that, that will normalize going forward. Also, that's a factor that the funding profile of our mortgage-backed book has cost margin compression, which we expect that to subside over the next few periods and that we do expect return to growth in the Wholesale Banking loan growth, which comes with a higher margin. That's why we do expect that over time, our lending margin will range between 125 and 130 bps.

And we will now take our next question from Tarik El Mejjad of Bank of America.

Two questions from my side. First of all, I would like to come back on the tech investments and AI. I mean, you've been one among those banks that had some AI/ML issues a few years ago as you had to ramp up your FTEs in the KYC and client boarding functions. So have you invested in the meantime in AI in that area? And could that actually -- I know you've already run down a lot of these costs, but is this something you've been investing in, in parallel? And also in terms of embedded AI in products, where you are and what's your thinking is in the future?

And then the second question is on capital redeployment. Thanks Steven, you've been very clear about the outlook for where the capital generation goes. That's very, very clear. But in terms of consolidation and M&A, you've been very vocal and transparent about it. What's your -- how your thinking evolved in this current rate environment and where your focus will go?

Thank you, Tarik. Yes, first of all, tech AI investments. I think there are 5 main areas that we currently are deploying or starting to deploy gen AI, and we already work with AI for the last 10 years, but GenAI, which is, let's say, AI on steroids, if you will, there was a clear focus that is coding in the technology space that is lending, that is hyper-personalized marketing, that is contact centers and that is KYC. So for sure, we are investing in digitalizing KYC and also get this supported with AI and GenAI. And that will, of course, also have an impact on our processes and could also indeed have an impact on how we work with our staff. So yes, that could be and -- it is an interesting part of the business where we can use digitalization much more than we did that in the past.

When it comes to capital deployment and our thinking on M&A, yes, it has not changed. I think that what we want to do is we want to make more impact and be more relevant in the markets in which we operate. That means that we -- there are in markets or market by market, looking at market segments that we currently do not have, for example, business banking or consumer lending or private banking, wealth management type of activities or we look to increase in size, which has scale benefits. Those are the areas in which we are looking. But of course, it has to make sense from an ROE point of view.

And we will now take our next question from Giulia Miotto of Morgan Stanley.

I will start with one on NII. Tanate, I think I heard you saying that the guide for the year is EUR 15.2 billion to EUR 15.3 billion, which somewhat surprised me because I would have thought it was almost a slam dunk that it would be on the EUR 15.3 billion side of things because I thought NII is improving in the second half specifically in Q4, you've got the benefit from the end of the Belgian campaign. And so I think a [ EUR 3.9 billion ] sort of NII for Q4 was almost in the bag. And I think you'll make some comments around seeing some Wholesale Banking transaction closing in Q3. So I don't know if you can quantify that, if there is any sort of nonrecurring things in Q3 that we should keep in mind. So yes, I would welcome your comments on NII for the rest of the year.

And then secondly, there have been quite a few incidentals recently on the cost line. And if I look at the past 5 years, leverage is more or less EUR 200 million a year. Is there something that we should think about as recurring? Or not really -- you plan not to do more going forward?

All right. I give both questions to Tanate starting with NII.

Yes, Giulia. So I think we do have some tailwind coming our way. The ECB rates later today, we'll see what Christine Lagarde say, but I think we see a bottom to the short rates and a positive view curve. So that's a good tailwind. And we do expect that, that will have a positive impact on our NII, not only for '25 but 2026 as well. The reason why we gave a tight guidance of EUR 15.2 billion to EUR 15.3 billion, is the fact that in Q3, we have seen quite a catch-up in the Wholesale Banking NII growth. If you remember in previous quarterly calls, we said that our pipeline in Q1 and Q2 were fairly robust, but customers were not converting them into loans or transactions, and that catch-up has happened in the third quarter in a pretty significant way. So that's why we gave this guidance of between EUR 15.2 billion and EUR 15.3 billion.

Now on restructuring provision. It's been our approach that we don't take big major program restructuring provision over multiple years. But we take provision when we have a clear business case, it is concise and that it can be achieved over 12 to 18 months, and that's our policy going forward. That's why we gave a bit of an outlook to the market that we do expect continued efficiency program and that we do expect to take additional restructuring provision for additional efficiencies in Q4.

And we'll now take our next question from Benoit Petrarque of Kepler Cheuvreux.

So first, just as an intro, I just wanted to get your view on the outcome from the Dutch Election. It looks a good -- relatively good outcome [indiscernible] right outcome. So I just wanted to get your view on that. Now the first question is actually on the ROE target. You've upgraded '25 several times. Yet you've kept '27 ROE unchanged. So do you share -- my view at least that there is more confidence in the 14% and potentially upside to the 14%. And just also wanted to check with you if you see the growth momentum currently. Yes, a bit more pronounced than what you were anticipating back in June '25 at the CMD. So that's number one.

And number two is on the efficiencies. Again, I think the tech side is looking quite promising. And you just mentioned that the use of digitalization is also much more than in the past. You've put through also restructuring charges in Retail. So I was wondering if all those kind of efficiency gains were embedded in the 3% to 4% OpEx CAGR target back in June '24. Or do you see things a bit accelerating on the efficiency side and the digitalization side?

All right. Thank you for the questions. I will take the question on the elections. Tanate will take the questions on the upside on growth and the efficiency, although I have the feeling that Tanate will say something around we will further update you upon our fourth quarter results 2025, but I'll leave that to him.

Regarding the outcome of the elections, yes, look, I mean -- but I'm saying something that you know as well, obviously, is that stability of a government and of a coalition and thereby, a government that can take long-term decisions is good for society, it's good for the economy. I think that the meeting of minds in the previous coalition was not there. And I think that this is a new opportunity to create a coalition that is more stable. I can look more long term. And I'm really hoping for that.

Secondly, I think also the parties that are a bit bigger, are more pro Europe. And I think that from a business point of view, it helps to foster international ties. And therefore, it's also good to set it in a European setting, whereby I really think that people should continue to look at continuing and implementing the sales and investment union so that could help here as well.

Yes, and I think thirdly, areas around consistency of policy around simplification, but all sustainability would also help. So yes, I think it is good if we get a government that can create longer-term stability.

From CMD, I think we are more confident about our [ 2025 CMD. ] Volumes are better than we planned. Fee growth we have basically upgraded in the last 2, 3 quarters, our ROE guidance for 2025. But I think I'll leave it to February to give you more formal guidance for the coming period.

And then on cost reduction program, yes, these are plans which we have an ambition to deliver, and it's in line with our Capital Markets Day guidance.

[Operator Instructions] We'll now move on to our next question from Benjamin Goy of Deutsche Bank.

Two questions also from my side. One is a follow-up on the net interest income, particularly implied for Q4. In Q2, you -- when you gave the guidance, you assumed one more rate cut, which hasn't materialized and might not also not happen today. So wondering whether there is a bit more upside baked into your guidance now as compared to August?

And then secondly, on the Wholesale Bank, maybe can you give more color, one, on the loan growth, where is it coming from, countries, which type of product? And then also the newly defaulted files in Wholesale Banking, any trends you can see or industries? Any background would be appreciated.

All right. I will talk about the Wholesale Banking growth. Ljiljana will talk about the risks or risk cost in Wholesale Banking. And Tanate will talk about NII.

So on the growth in Wholesale Banking, these are 2 areas. First of all, these are larger underwritings and syndicated loans. So large investments that companies are doing for that they have larger transactions and underwritings that we have been doing with them. We already told you in the previous quarters that the pipelines were strong in Wholesale Banking. So we saw the pipeline is growing, but the conversion into real business was not there, undoubtedly, that had something to do with the certainty in the market. So at least it's a good signal that companies are now investing. Do we -- is that a trend or not? That goes a bit too far for today, but at least it's good that companies are starting to invest and that has led to a larger underwriting business and related lending fees, and that you also see in the fees coming through.

And the second area in that economic activity, you see that also in trade financial services. So those have been the areas of growth in Wholesale Banking, leading to around EUR 5.5 billion growth in the Wholesale Banking next to the around EUR 6.5 billion, EUR 7 billion growth in Retail Banking and mortgages. Then we go to risk, yes.

Yes, you've seen the third quarter risk cost in general. We're at slightly below the cycle or at the cycle with 19 bps, let me say, and the same is also valued for the Wholesale Bank specifically. So if you're looking at Wholesale Bank, they're slightly below through the cycle average and the majority of provisions correctly comes from the S3 provisions or Stage 3 provisions. However, they are higher than previous quarter, but they are lower and significantly lower if you're looking at the third quarter '24. So if we are looking at the newly defaulted cases, I cannot say I see a specific sector-wide pattern. What we've observed are actually more a result of idiosyncratic events at certain clients rather than systemic observations. Needless to say, we remain vigilant because despite the global economy doing a bit better than we expect, there are still uncertainty around how the economic policy, specifically tariffs and regulation deflux will impact it going forward. So far, so good, I would say.

And then on rates, Ben, I think the reduction in rates has no material impact on our 2025 financials. And I would refer you to the replication impact of the forward curve that we provided on Page 24 that you see that it has a positive impact in '26 and '27, but immaterial for '25.

And we'll now take our next question from Shrey of Citi.

Just on your 13% CET1 ratio target, you're obviously at 12.9% this quarter, pro forma for the distributions you announced. Looking forward, did you look to ask below this number on an interim results basis? And sort of what's the leeway within that circa 13% number?

Good spot. So indeed, we are comfortable with dipping into it a little bit. So this is what it shows today. So it is indeed around target, and I don't want to mathematically, every day of the week, be at 13%. It will be around that number. And you can see now that now it is 12.9%, so it's a bit below it. And what we then say is that what we say is that we have a structural capital excess over 13%, then we call it an excess, and then we will look at distribution.

And we'll now take our next question from Chris Hallam of Goldman Sachs.

Just to begin with some Q4 housekeeping. The EUR 30 million of annualized cost savings you flag on Slide 15, when do you expect those to be fully implemented? And then are there any reasons why fees would be down year-over-year in the fourth quarter? Just even if I assume flat, then I'm going to get to a full year number result of 4.6% and 4.4% on fees.

And then second, on the strategy, there's a link obviously between deposit campaigns, the customer retention and then fee growth. Do you get a sense of that connection is that the strategy is becoming more predictable or more lucrative? And maybe on the other hand, if you look at what's coming in Germany, the more demand for borrowing, maybe a greater need across the banking sector for funding and liquidity in that market to kind of react to that borrowing demand, maybe a more competitive deposit landscape. Does that change at all the economics for ING of the deposit campaign pipe strategy in Germany?

All right. On the EUR 30 million cost savings, that will feed through in 2026 per annum. Then is there any reason for the fees to go down in the fourth quarter? Now that depends on economic activity. So you've seen the growth in our fees has been 75% alpha. Of course, we saw a very strong lending fee in Wholesale Banking because of the -- let's say, the execution or the conversion of the pipeline. So yes, there we need to see what is the level of activity, but we remain confident on our fee growth. And that's why we said the fee growth for the year will be higher than 10% rather than at the higher end of the 5% to 10% range. And then yes, just correct me if I understood your question in the wrong way, but you are wondering if there's a connection between growth in lending and in fees, and if there's more competition deposits, that's how I translate your question. Was that your question?

Basically. If you think about your deposit has a loss-leading product to generate fee growth in the future. So you've got to think about the deposit cost as the investment of the ROI. So just this deposit costs do climb up. At what point do you think about revisiting the size and the scale of that [indiscernible] campaign?

Yes. Well, I mean -- look, I mean, we see deposits as a -- not as a loss leader. Deposits, in general, make money for us. And that's why you've seen that we started many years ago as ING direct in many countries as a savings and deposit bank. Now if you talk specifically about the deposits that we are doing in Germany or elsewhere, a campaign can either be aimed at fresh money and that should show a positive payback of in between 6 and 12 months, so that's to existing customers and new money for existing customers. And if you look at campaigns that are aimed at new-to-bank customers, those typically have a payback period of 2 to 3 years. Now we have these -- done these type of actions and campaigns for decades. They're highly data-driven, which means we can really monitor who do we target at, how much money will stay in the bank, how much business do they do with us afterwards. And we apply continuously these learnings going forward. And of course, these campaigns, with all the data that we have now, will become much more targeted and much more specific, but it's one of the success factors of ING, and we will continue to do so.

And we will now take our next question from Anke Reingen of RBC.

Just very small questions. Given that -- do you think you have more potential for cutting your deposit rates given that it seems rates have sort like plateaued? And just on the lending margin, is it basically fair to assume it will decline in Q4, given your comment about the Q3 benefit in Wholesale Banking? And I'm sorry, just a small follow-up question. In terms of your capital update, you said next update is in Q1. But just to confirm, we should assume you keep the same cadence as Q1 or Q3 updates.

Yes. So let me confirm that indeed what I indeed meant in my presentation that in terms of capital distribution or how we look at our capital, that will be the 6 months update intervals that we have. So end of Q1 figures, end of Q3 figures as we have done today. Tanate, lending margins and deposit rates?

Yes. Deposit rates. I think it's a balance, right? We don't give forward statement on rate cuts or commercial action, but it's a balance between volume growth, competition and profitability. And I think we give our continued outlook that liability margin will remain at around 100 basis points for this year and rise to between 100 to 110 in 2026 and onwards. So that's on rate cuts. And sorry, your second question?

It was just fair to assume the lending margin declined in Q4 given your [indiscernible] comment.

Got it. I think that really depends on Wholesale Banking and Retail Banking activity, mortgage mix, Wholesale Banking loans. But I think our outlook is that margin on lending will remain flat at around 125 basis points.

And we'll now take our next question from Farquhar Murray of Autonomous.

I had 2 questions, if I may. Firstly, on the recent Board appointments. So I just wondered if you might flesh out the reasonings behind those, [indiscernible] and Ida Lerner and the actual term. Strategically, I'd expect probably a lot of continuity. But I just wondered if there might be any nuances we should read into those appointments in terms of skill sets for the future. I'm sure Ljiljana might actually have views to express of her own.

And then secondly, on the increased CET1 target. Could I ask how those will be cascaded down into the businesses? And in particular, will that be incrementally priced into lending rates?

Thank you. Very good. Nice question about the change of the Board positions. And yes, Ljiljana is sitting next to me. So I will not say anything else than nice words, obviously. But joking aside, I mean, Ljiljana has done and is doing a fantastic job in the risk domain and has not only good experience in risk, but also good experience in wholesale banking from -- in her previous life and knows organization because she has now been with us for 5 years. And I think that with Andrew moving on to the nonexecutive phase of his life, I think I'm very happy with Ljiljana in that post to continuously drive the strategy that we have in Wholesale Banking and also further increase the capital efficiency and the ROE improvements that we wanted to make in.

When it comes to Ida, Ida is a very experienced CFO in a European -- a large European bank with also end risk and wholesale banking experience. So very broad-based. And I think she will be an excellent fit also giving external -- outside perspectives to ING to further improve and focus on our cost discipline that we have here in the bank and help me with potential M&A if we come across it. So that's the background of those candidates.

Now on the capital targets, you would have noticed that even in our third quarter results, the divisional ROE is now based on 13% of risk-weighted assets, so that will be communicated more widely to our teams. But I think we also look when we adjust to 13% at many of our Wholesale Banking peers also operate at around 13%. So we don't expect a competitive disadvantage of this new target materially in the Wholesale Bank.

And we'll now take our next question from Matthew Clark of Mediobanca.

A couple of questions on -- well, one question on the 2 deposit campaigns and your retention rates there. So it looks from the German campaign that you retained less than your normal 2/3 rule of thumb. Could you confirm that? And then also on the Belgium campaign, can you just confirm whether -- with both of them, you've got the return on investment that you expected that the -- whether there's anything to learn from those campaigns?

On the retention rates where it was lower, we have sometimes said that we typically retain about 2/3 of the money, and that is not different this time around. So -- and that goes for both campaigns, actually. Also in Belgium, we expect a strong return on investment. We -- there's a good retention and now a number of these customers are turning into primary customers. So actually, that was a very successful campaign.

And we'll now take our next question from Cyril of BNP Paribas.

I have 2, if I may. So one on fee growth. So the second upgrade in guidance we have for this year. So it does look like the momentum is quite strong and resilient. And I'm just wondering what elements of that momentum that we can take and extrapolate maybe into next year? And the second would be on SRTs. I know we have a transaction planned for Q4. And do we have any visibility on any other transaction maybe for 2026?

All right. On fee growth. Well, it starts with growth in customers. So if we have more primary mobile customers, then we have more customers that do more with us because primary customers typically are customers that choose ING as their main or one of their main banks. And so we have been growing our customer base, again, with about 200,000 new primary customers. If you -- it was 1.1 million, we aim for about 1 million per year. So we're well on track to do this year as well. That's one.

Two, we are increasing the activities with our customers. So you have seen that on investment products that more and more customers taking a trade account with ING that is currently around 4.6 million people who trade with ING. Every quarter -- I say it was 4.4 million and was 4.2 million. So every quarter, we add about 100,000 to 200,000 new customers who trade with ING. And then that's very good. But the better thing is even that we have over 40 million clients. So you can only imagine how big the upside is. And we are now focusing on the segment much more than we did that a few years ago. [indiscernible] in the fee bar chart that you see on the pages, that's also growing steadily, and that's an annuity type of business. So there are -- we broadened up our activities with our customers. And therefore, you see that 75%, if you will, of the fee growth that we see typically is alpha driven, and we are very comfortable with the momentum that we have. That's also why we updated our fee growth for the year and we are very confident to make the 2027 5% -- [ EUR 5 billion ] target for that year.

Thank you, Cyril. Just on capital discipline. I think if you look at 2025 Q3, we saw for the Wholesale Bank, despite the volume growth, the capital usage or risk-weighted asset was almost flat, indicating strong capital discipline and capital velocity in the Wholesale Bank. And yes, we are in dialogue with our regulator to get the final approval for our SRT in Q4. We do expect that transaction to be done and it would have a roughly 10% -- sorry, 10 basis point positive impact on our core Tier 1.

And we'll now take our next question from Seamus Murphy of Carraighill.

Two questions, please. Can you just briefly talk about the expected evolution of full-time employees? Because when I look at the quarterly numbers, I mean, we're up to 63,000 now, I think, in Q3, that's kind of up 5,500 since the start of this rate cycle, and we're up again significantly year-to-date. I think it's up another 1,500. But I appreciate the question earlier in relation to the savings that could emerge from internal innovation. But should we continue to expect the net growth in FTEs into 2027 because just the pace of FTEs kind of is -- continues to surprise, especially with the average salaries around [ EUR 120,000 ]. That would be great.

And secondly, just on NII. At your CMD, you spoke about this 4% to 5% growth in total income of EUR 22 billion base, which would have given us about EUR 25.5 billion at the top end in '27. And you had guided fee growth, which is obviously stronger and the other income, which we assume could be broadly flat. But when I think about NII, we have a much more beneficial rate curve now versus then. And so I suppose when we think about it, the real kind of issue so far has been the fact that the deposit [ beta ] has risen significantly into 2025 in your retail eurozone area. I think it's about 44% still. So I'm just kind of wondering what -- is there something going on in terms of the dynamic in terms of the deposit pricing that we should think about? I mean, I know you've got 110 basis points of deposit margin in -- next year, sorry, early into '27. But certainly, it seems to be relative to CMD with a much more beneficial rate curve that NII should have been an awful lot higher. And I'm just wondering, does this inflect significantly into '27 to meet kind of like what you would have expected the CMD? Or how should we think about that?

Thank you very much. In terms of the FTEs, yes, what you see, I think, on the press release is the internal number, and so you can never look at in isolation. You have the internal FTEs and you have the external FTEs then you have the work packages. That is how you get to your cost. And so -- but to give you a little bit of indication of that, our total internal and external FTEs in this year have been around flattish and we have more internalized FTEs, and that's why you see that number moving up. In the end, we look at investing in businesses to grow our business and increase our revenue over RWA with the right return. And we want to do that in a scalable manner so make sure that we have positive jaws, and that's where we are, we want to go to. So that's how we look at costs and how doing these actions and efficiency actions that also Tanate talked about.

In terms of your growth in fees and the NII levels that could potentially be higher based on the current rate environment and the growth in our lending, so it's well noted. Thank you for noticing it. We will provide further updates on our outlook as per the fourth quarter figures in early 2026.

Thank you. And with that, I would like to thank everybody for joining the call this morning. Good luck and a great day. I wish you, and I hope to speak to you soon again. In any case, we will speak early 2026 on the fourth quarter figures. Thank you very much.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

Good morning. This is Saskia, welcoming you to ING's Second Quarter 2025 Conference Call. Before handing this conference call over to Steven van Rijswijk, Chief Executive Officer of ING Group, let me first say that today's comments may include forward-looking statements such as statements regarding future developments in our business, expectations for our future financial performance and any statements not involving a historical fact. Actual results may differ materially from those projected in any forward-looking statements.

A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission and our earnings press release as posted on our website today. Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities. Good morning, Steven, over to you.

Great. Thank you very much, and good morning, everybody. Welcome to our results call for the second quarter of '25. I hope that you're all well, and thank you for joining us. And as usual, I'm joined by our CEO, Ljiljana Cortan; and our CFO, Tanate Phutrakul.

The second quarter started with sharp market volatility as well as macroeconomic and geopolitical uncertainty. And in that context, we are pleased with our strong results, which we will discuss in today's presentation. We have continued to successfully execute on our strategy, and I will start with sharing some highlights of the progress that we're making on the priorities that we set on our Capital Markets Day just over a year ago. And thereafter, Tanate will walk you through the quarterly financials. And as always, we will be happy to take your questions at the end of the call.

Now, let's move to Slide 2. This slide illustrates our continued strong growth trajectory in the second quarter. We grew the mobile primary customer base by more than 300,000 customers, which underscores the strength of our offering, with growth of more than 1.1 million mobile primary customers in the last 12 months, we are doing well compared to the target that we set at Capital Markets Day.

We also recorded significant growth in our loan book. Net core lending in retail banking grew by a record of EUR 11.3 billion, which was again mainly driven by mortgages, while we also support our clients with additional business lending and consumer lending.

In Wholesale Banking, net core lending growth was EUR 4 billion as we financed more working capital and increase our short-term trade-related financing. Demand for long-term corporate loans has remained subdued in the current uncertain macroeconomic environment.

Net core deposit growth was over EUR 6 billion, also driven by retail banking, which benefited from the seasonality of holiday allowances. In Wholesale Banking, we continue attracting deposits in payments and cash management and money markets, but this was more than offset by lower short-term client balances in our cash pooling business. With 7% annualized growth in customer balances in the first half of the year, we are well on track to reach our target of 4% per annum.

On the P&L side, our focus on further diversifying our income streams is yielding solid structural changes to income composition. Fee income increased by 11% versus the first half of 2024 and now makes up almost 20% of our total income. We are confident that we can grow at the higher end of our 5% to 10% range this year and confirm our EUR 5 billion fee income target for 2027.

Our fourth quarter rolling average ROE was 12.7%. And also there, we have improved our outlook for the full year. We continue to support clients in their sustainability transitions and with the volume of sustainable finance mobilized rising 19% from the first half of last year to EUR 68 billion.

Now we go to the next slide, where I will give more insight on customer growth. On Slide 3, we show that we have significantly increased the pace of customer acquisition in the last few years, which is clear evidence of the appreciation of our products and services. And over the past 12 months, our customer base has expanded by almost 1.2 million customers, and we are currently serving more than 40 million private individuals globally.

Customer acquisition is a key driver of future value as it also leads to a growing mobile primary customer base, cross-selling products and converting customers to mobile primary customers is most successful in the first year after onboarding, a period which we call the honeymoon phase. However, also, after this honeymoon phase, our customers continue to buy more products from us and choose us as their primary bank.

Now on the next page, I will explain why we focus on increasing our mobile primary customer base.

Then we move to Slide 4. And there you see on the left-hand side of the slide, you see that the number of primary and mobile primary customers is increasing. At the end of the second quarter, more than 41% of all of our customers chose ING as their primary bank. And these mobile primary customers buy more products, show lower attrition and generate higher revenues. And we see significant upside to further increase conversion rates, especially in countries with relatively low conversion rates, such as Germany and Spain. And this also drives our focus on broadening our product foundations.

The second quarter growth in customers also resulted in further growth in customer balances and as we show on Slide 5, average customer lending balances have increased significantly, especially in the last 12 months and this growth was fully driven by retail banking and mortgages, in particular, which is in line with our strategy to allocate more capital towards this business line. Average customer deposits have also risen considerably since 2024 due to good momentum in both Retail and Wholesale Banking. And this growth in volume has helped offset the margin pressure on NII in recent quarters and will be a key driver for value going forward.

On Slide 6, we recap how our strategic execution has also enabled us to consistently deliver value for our shareholders. We have distributed cash dividends in line with our distribution policy and have been executing share buybacks for a number of years now.

In total, we have distributed close to EUR 30 billion since 2021, including the announced interim dividend over the first half of 2025, which will be paid on the 11th of August. And as a result of these distributions, we have consistently delivered a yield of more than 15% in the last few quarters, and it is significant, but even more impressive given the increase in our share price over the same period.

Going forward, we remain committed to generating a healthy shareholder return, and we will update the market with our third quarter 2025 results. And now we go to Slide 8, we go to the outlook for '25. And before going to the usual outlook and target slide, I would like to give more details on the expected development of commercial NII going forward.

In the third quarter of this year, we expect commercial NII to be roughly stable, driven by the continued impact of the stronger euro and increase thereafter. And overall, we forecast commercial NII in the second half of 2025 to be higher in the first half, and the increase is expected to be driven by continued volume growth as margins are expected to remain stable for the remainder of this year before gradually increasing in 2026 and 2027.

Then I move to Slide 9, where we show our updated outlook for 2025. I would like to reiterate that we are confident in our ability to continue progressing on our targets, supported by the strong results in the first half of the year. We have already grown the number of mobile primary customers by almost 500,000 this year and are well on track to reach our annual growth target of EUR 1 million in 2025.

Fee income growth is expected to come in at the higher end of our 5% to 10% range, which helps to offset pressure from FX on our commercial NII. And as a result, we confirm our outlook for total income and expect it to be roughly stable compared to 2024. Prudent expense management remains a priority, and we are taking proactive measures to ensure we continue to operate efficiently, while also selectively investing for growth.

And as such, we now forecast total expenses to end up at the lower end of the range we gave earlier, including incidental items recorded in the first half of 2025. The outlook for CET1 remains unchanged for the year at 12.8% to 13%. Considered our improved outlook for fees and expenses, we've also increased our outlook for ROE this year, which we now believe will be around 12.5%.

And now I will hand over to Tanate who will take you through the second quarter financial results in more detail, starting on Slide 11.

Thank you, Steven. I would like to start on Slide 11, where we show the development of our total income, which increased further compared to the previous quarter. Commercial NII was supported by the repricing of customer deposits and continued volume growth, which almost fully compensated for the impact of the lower ECB deposit facility rate and a stronger euro, which Steven alluded to earlier.

On a sequential basis, the appreciation of the euro had a EUR 37 million negative impact on the commercial NII. Fee income increased significantly and grew by 12% year-on-year. Most of this growth is structural, which is also why we expect -- our expectations for the full year have increased. Lastly, all other income, which is a combination of other income, investment income, and other income was supported by good results in financial market, treasury and higher income related to our stake in Van Lanschot Kempen Bank.

Now let's discuss Slide 12, where we show continued growth in customer balances. We recorded another quarter of strong commercial momentum, particularly with our retail banking business. Net core lending rose by EUR 15.4 billion, driven by record growth in retail, which grew by over EUR 11 billion. We continue to do well in mortgages, grew the loan book in most of our markets in the second quarter. We also saw an increase in business lending portfolio, notably in Belgium, the Netherlands and Poland. Wholesale Banking also grew net core lending driven by working capital solutions and short-term trade finance related financing.

Demand for long-term corporate loans have remained subdued due to the ongoing economic uncertainty. On liabilities, we saw core deposit increase by more than EUR 6 billion this quarter due to a strong performance in Retail Banking, which benefited from the payment holidays allowances. In wholesale, growth in PCM and Money Markets was more than offset by lower short-term balances in our cash pooling business.

On Slide 13, you can see our commercial NII was resilient. Liability NII was affected by the pressure from lower ECB deposit rate and the full quarter impact of the successful promotional campaign in Germany launched in the first quarter. These effects were almost fully compensated by repricing of customer deposits and strong volume growth. I'd like to note that the liability margin would have been stable without the impact of the German savings campaign.

Lending NII was impacted by the appreciation of the euro relative to other currencies, but still grew versus the previous quarter, supported by volume growth. The lending margin contributed continued to be affected by the mix shift towards a more profitable retail business with significant growth in mortgages, which have a lower lending margin, but a higher ROE. I will give more insights on this in the next slide.

The progress on our strategy to allocate more capital towards more profitable retail banking business is visible on the Slide 14. At the time of our Capital Markets Day, the distribution of capital between the 2 business lines was roughly equal 50-50. We set the target to change this to 55% Retail and 45% Wholesale by the end of 2027.

By the end of the second quarter, the share of capital allocated to retail has already exceeded 53%, reflecting strong growth momentum in retail banking and the focus on capital optimization in the Wholesale Bank. The ROE of retail lending is higher than the -- in wholesale lending as despite lower lending margin, the relative RWA consumption and risk costs are lower. As such, faster growth in Retail Banking has a positive impact on the group return on equity by the dampening impact on the overall lending margin. In the second quarter, the impact of this shift was roughly 2 basis points.

Turning to Slide 15. Fee growth year-on-year was again double digit, driven by structural revenue driver or what we call Alpha. Wholesale banking fee came in at EUR 360 million, a quarterly record for our franchise driven by strong fee income in lending, daily banking and trade finance. Growth in Retail Banking was fueled by continued increase in mobile primary customer, which also resulted in higher daily banking fees.

Investment product had also a strong quarter, reflecting growth in the number of investment accounts, increase in asset under management and higher customer trading activity. In addition, Retail Banking expanded its fee income from insurance product by 8%. Total fee from insurance product now amounts to almost EUR 70 million this quarter. Given the strong performance across the bank, we are confident we can grow our fee income at the high end of the 5% to 10% range this year and reach our EUR 5 billion target in 2027.

Slide 16, we show the development of all other income. Income in financial market is mostly driven by client activity. We continue supporting our clients in turbulent times, and this is evident in the results. Treasury has again a strong quarter with income on both comparable quarter, mainly driven by results from our FX ratio hedging and we benefited from positive revaluation of derivative for the forward purchase contract for our stake in Van Lanschot Kempen. Following the regulatory approval received last week, we now hold a 20.3% stake in this bank.

Next, Slide 17. Our expenses, including -- excluding regulatory costs and incidental items rose 4.5% year-on-year, but was stable compared to the previous quarter. The year-on-year increase was largely attributable to wage inflation, continued investment in business growth, mainly in customer acquisition, in enhancing and scaling our tech platform and developing products for new customer segments. In Spain, for example, we have launched a dedicated digital bank account to support customer between age 14 and 17 with a tailor-made experience in the existing ING app.

Operating efficiencies compensated for part of the cost increase, and we continue to digitize our services and infrastructure to further increase operating leverage. We have, for example, deployed our 1 app in 6 different retail markets and have introduced generative AI-powered chat bots in the Netherlands, in Germany, in Belgium, Romania and Spain. Incidental expenses also included EUR 85 million for a rebalancing of our workforce in Wholesale Banking, resulting in around 230 redundancies.

As a result of our focus on expense management, we have improved our outlook for 2025. We now expect total expenses, including incidental items recorded in the first half of this year to end up at the lower end of the range we gave earlier.

Now, on to risk costs on the next slide. Total risk costs were EUR 299 million this quarter or 17 basis points of average customer lending, which is below our through-the-cycle average and demonstrate the quality of our loan book. Net addition to Stage 3 provisions amounted to EUR 221 million and were mainly related to collective provisioning in various retail markets. Individual Stage 3 cost decreased, reflecting limited inflow of newly defaulted files. This is also reflecting a further decline of our Stage 3 ratio. Stage 1 and Stage 2 risk costs were EUR 78 million, including addition to reflect update of the macroeconomic forecast. We remain confident in the quality of our loan book.

Slide 19 shows the development of our core Tier 1 ratio, which came down compared to last quarter. The decrease in core Tier 1 capital is fully attributable to the reduction of capital from the ongoing EUR 2 billion share buyback, which is partly offset by the inclusion of EUR 800 million from the quarterly net profit for this quarter.

This decrease was partly offset by lower risk-weighted assets. Credit risk-weighted assets, excluding FX impact, increased by EUR 5.2 billion this quarter. This is mostly driven by volume growth, partly offset by impact of positive model updates and a change in the profile of the loan book. Operational risk-weighted assets remained flat, while market risk-weighted assets decreased by EUR 2.4 billion due to hedging and FX activities.

The interim dividend over the first half of 2025 is EUR 0.35 per share and will be paid on the 11th of August, continuing our established track record of providing an attractive return to our shareholders.

Now, Steven would like to wrap up today's presentation.

Indeed. Thanks, Tanate. And I would like to recap a few messages before going into Q&A. At the start, I would like to say that despite the ongoing geopolitical and macroeconomic turmoil, we have been able to generate continued commercial growth in this quarter. Commercial NII was resilient, and we expect this to grow. In the second half of this year, fees have grown by 12% compared to 2024, and we feel confident we can grow fees at the higher end of our 5% to 10% range this year. And costs remained well within our guidance. We are taking proactive measures to ensure we continue to operate efficiently and now forecast total expenses to end up at the lower end of the EUR 12.5 billion to EUR 12.7 billion range we indicated earlier.

All in all, this translates into an improved outlook for profitability in 2025, and we now expect to deliver a healthy return on equity of around 12.5%. And with this, I would like to open the floor for Q&A. Operator?

[Operator Instructions] And our first question comes from Giulia Aurora Miotto to from Morgan Stanley.

I have 2. The first one is perhaps, we underestimated the FX sensitivity that ING has. Would it be possible to have a disclosure around the revenue and cost mix so that we can estimate it going forward given that the euro-dollar is being quite volatile? That would be my first question. And then secondly, you mentioned that corporates, the loan demand is muted considering that there is uncertainty. Is that -- do you see any signs that this can change in the coming quarters, especially in Germany or not really too early to say?

All right. I will talk about the corporates and Tanate will talk about the FX sensitivity. Yes. So what we have seen this quarter was a growth in the wholesale bank of EUR 4 billion, but that was largely working capital solutions and trade-related financing, so short-term receivable type of financing structures.

On the longer term, maybe term loans, we saw more syndicated loans than we saw previous quarter, but not the big jumbo deals that we saw previously. And of course, we did offset, there was a limited growth in the term loans, but that was offset by capital velocity that we use to bring that down again. So there was a bit of growth in the corporate term loan, but that was still muted. In that sense, it's a bit too early to call whether that will change or not. So of course, there is now a trade deal. Let's see if the signatures will be put on paper. That should then alleviate some concern, but it's for now a bit too early to say.

Giulia, yes, we'll consider a bit of our disclosure if this volatility of U.S. dollar will continue. But to give you a sense, already with an 8% reduction in the U.S. dollar against the euro in Q2 that has an impact of 37 million in NII and an overall impact of maybe around 60 million to 70 million on total revenue, right? We do benefit from less cost because of translation results, but it's not so impactful on our ROE given that risk weight is also coming down.

Got it. That's very helpful. Do you have the number for the costs? You gave the number for revenues? Do you have the number for costs?

No, we don't. But we'll consider it in future disclosure.

And up next, we have a question from Benoit Petrarque from Kepler Cheuvreux.

So the first question is actually on commercial NII. I get the reason of the downgrade, which is really coming from the FX rates. Just wanted to talk about the underlying commercial NII trends, if you are satisfied with all the trends you see around replicating income, lending margin, whether this is all in line with plans, so ex-FX impacts.

The second one is on commercial NII guidance. So when you look at the Q4 -- implicit Q4 guidance, I get to a 2.5% to 5% quarter-on-quarter improvement in the fourth quarter. So I'm just wondering, if you could walk us through the moving parts around the -- this improvement in the fourth quarter. Just maybe last 1 to Steven, we've seen an interview in the Dutch Financial Daily a few days ago. I think you referred to the lack of level-playing field regarding capital requirements in Europe. And I think you mentioned that moving the head office to the German border will be very efficient from a capital standpoint. I think we discussed that quite some time ago, but could you maybe talk about that? And are you kind of serious to consider a plan to the head of -- to move the head office to German?

Yes. Let me talk about the Gelsenkirchen remark I made in the newspaper, and then Tanate will talk about the NII and the fourth quarter implicit guidance in terms of what you mentioned. So I think in that article, I said a few things. First of all, that in Europe, we have still many trade imperfections between countries in and of itself with our own import tariffs between markets and our own non-harmonized regulation, and that goes for many sectors. And we need to work on that in Europe because we really need -- because we need to become more competitive.

Then talking about the banking sector, you see that there as well. So -- and I gave an example, but there was a statistic example of, if I just moved the head office to Gelsenkirchen, which is just across the border from the Netherlands, then with the same activity that we have, given the current regulation, I need to hold less capital and they will pay less taxes. Yes, that is strange. And I want also in this country, and I'm concerned about the business climate in this country that a country also needs to have strong banks to also make sure that businesses can -- and households can thrive in good times and in the bad times and you should, as a country once they have strong banks and not try to chase them away.

So in that sense, European rules are not harmonized enough. And I find it odd that banks from, for example, Germany and France, even if they serve clients here, have to hold less capital. And the same goes then for those banks that also have to pay less taxes because we pay taxes over our business abroad in this country and others then will not. And I think we should also in this country think much more about how to make our banks competitive.

Thank you, Steven. I think if you ask about our commercial NII, what's positive compared to last quarter and what may be more challenging, I think what remains the same is the part of the ECB rate cut, right, the facility rate going to 175, that remains per plan, and the steeper forward curve is also what we were expecting then and what we see now. So those are things, which remain the same in terms of our outlook.

What I think has changed in a positive front is the fact that the volumes have come in higher than plan, both on lending and on deposits. So I think that is also quite strong and positive. And then maybe on the challenging side is that the demand for long-term lending in Wholesale Banking has been more soft -- continuing to be soft and the outlook remains challenging. I think these are the moving parts that I'd like to cover.

Maybe on the Q4 improvements?

Yes, I think on the Q4 improvements, I think the big driver is really volumes and maybe less impact on FX in Q4. At the same time, we never comment on further rate actions, but you can imagine that we will manage our margin at around 100 basis points on liability and rising to 100 to 110 in 2026.

And Tarik El Mejjad from Bank of America has our next question.

Just a couple of questions on my side, please, focused on M&A and deposit strategy. So can you give us a bit of an update on what have been your main deposit gathering campaigns in Q2 and those that you probably launched in Q3. And then on the M&A, is my understanding is correct to see that the focus you would have -- you have at the moment is more into buying deposits. And kind of going back to your ING Direct DNA of making much more spread on deposits versus targets on fees, where for the fees, you're still mainly focusing on getting more primary clients and cross-selling. Those are my 2 quick questions.

All right. Talking about the deposit strategy first. So we didn't have really big campaigns in the second quarter. We had a big campaign in Germany in the first quarter that led them to an increase in deposits with EUR 23 billion in aggregate, of which about EUR 16 billion came from Germany. Now that campaign is now ending. And then you -- that means that some of the money that we then gained will flow out in the third quarter of this year, which could have an impact on deposit growth for the third quarter, also because it coincides with people going on holidays, so they spend more money that they received in the second quarter.

So that could have an impact. But there's no big campaigns going on at this time. And the impact, by the way, of these campaigns is what we see in Germany is similar to what we have seen in previous campaigns that about 2/3 of the money is sticky and 1/3 of the money leaves. So that is good. With regards to M&A, but also our activities, no, I think that what we are doing is that we're diversifying our business. So on the one hand, we become more specific in the type of services that we offer to existing customers. So not one size fits all, but Gen Z and expats and mass affluent and affluent. So we become more specific in targeting those customer segments.

And that then helps also to get more mobile primary customers in. And the second -- and who will do more business with ING, diversified business. And secondly, we tried to fill in the blanks in markets where we are already active, but we're in some markets only active in wholesale banking, so the top end and private individuals, the low end, if you will.

And then we need to want to fill it up with SME, self-employed, mid-corporates, private banking, wealth management. So we try to broaden the business. And that's what you also see reflected in our figures that we're actually growing. Yes, of course, we grow in lending and deposits. And I'm happy with that because we're a good bank and people like to do business with us, but I'm particularly proud of the fact that we continue to grow our fee income because that is diversifying our income streams, and that's what we want.

And our next question now comes from Chris Hallam from Goldman Sachs.

Just a few clarifications, I guess. So first of all, what's embedded in the commercial NII guide with regards to savings rates cuts in H2? And is the planning there around the rate mainly in response to your own planning or, I guess, relative to competition, i.e. are you driving to a predetermined liability margin outcome? Or are you just paying what needs to be paid relative to this? And then second, on market share, what are you seeing on mortgage market share, particularly given the extra capital you're putting to work there? And do those share trends differ much across your main markets?

I think on the market share in mortgages, clearly, by the way, we price the mortgage to the return. So we don't grow for the sake of growing. We grow when we also can make the right return on that. But we have, over the past year, improved our processes and made them more easy in digital, whether it's direct selling or through the brokers. And that has meant that in some markets, most notably in the Netherlands, we have been increasing the market share of the new production, which now hovers around 17%. So it's now stabilizing, so -- but that's where we currently are. And we're happy with the growth that we show there.

Chris, obviously, we can't give any guidance around any further deposit rate action in the future. But I think as you see, we manage commercial NII on margin, and we have been able to manage the liability NII at around 100 basis points this year, and that continues to be our guidance. And you can see that despite the rate action we've taken earlier this year, liquidity remains strong and deposit growth remains strong.

And from KBW, we have Hari Sivakumaran with our next question.

I just wanted to ask on the fee guidance. I appreciate you improved it to the upper end of the 5% to 10%. But you're currently running at kind of 11%, half 1 versus half 1 last year, and that's EUR 2.2 billion. Is there anything that's kind of holding you back from going above 10% fee growth this year? And then my second question is on the wholesale business, and I appreciate the slide on the change in the mix of capital consumption. But the ROE has sort of been stuck at around 10.5% for the last 2 quarters. I'm just wondering if there's anything more that can be done to improve that.

So let me first start with the RE and Wholesale Bank. So we have given guidance on 2025 for an ROE combined of 12.5% or around '27 of 14%, and we're confident on both counts. And we also want to make improvements in both businesses. For both, it means we need to diversify more. I just talked about retail, but the same goes for wholesale. So we have been investing consistently in transaction services and financial markets to cross-sell next to the big lending engine that we have in Wholesale Banking to get to higher returns. That's 1 element.

The second element to improve our return there is to improve capital velocity, which means we want to do more with the same capital or the same with less capital. That's also why you see a shift in capital from wholesale to retail. But we are still embarking on our first SRT, which will come in the second half of this year, and that will also help the return of Wholesale Banking and that's only the first and then in '26, we will continue with SRTs and the years thereafter as well.

When we talk about fee guidance, yes, look, we're -- yes, indeed, we have very good growth with 12%. We have been able to show average growth of 5% to 10% over the last 5 years. We continue to give that guidance over the period '24, '27. So yes, we are happy with what we're doing. We, of course, want to sustain these levels. But we stick now -- for now to our guidance of 5% to 10%, albeit at the higher end of the 5% to 10%, so we become more specific.

And from Barclays, we now have Namita Samtani with our next question.

Just my first one. Just wondering on the liability margin when you guide to 100 to 110 bps in 2027 when the replicating portfolio becomes the severe tailwind. To me, 110 bps would be the floor. Would you agree with that? So what stops the group from printing above 110 bps liability margin in 2027? And secondly, I just wanted to ask Steven, I just wondered related to Tanate's intentions to step down as CFO, in the press release, you write after 7 years as CFO on the Board, it's a logical moment for Tanate to step down. I just wondered why it's a logical time. ING has targets up to 2027, which we're yet to see if they can achieve. And I also wondered, if you're looking at internal or external candidates as the CFO?

All right. Thank you very much. And by the way, I heard it's your birthday today. Is that correct?

It's my sweet 16.

Very good. Congratulations in the case. Yes. Look, the 7 years logical time to step down, I think what I meant with that, look, this has been a very good period. Tanate and I know each other for a long time, we have been working together since I believe the year 2000 when we were both stationed in Asia, and I'm very grateful that he has been with me for 7 years at the Board. And now Tanate is retiring from ING. And this was my expression to be grateful. There was not anything particularly meant by 7 years or what it should be exactly, but this is very good time at our Board, which I'm very grateful for. Nothing more, nothing less.

And in terms of candidates, yes, we never disclosed who we are exactly looking for. But of course, you can be sure that this is a rigorous process, and we have ample time to announce a successor before the AGM of 2026. Tanate, on liability margin?

Yes. More to mundane topics, liability margins for next year. I think, look, it's always a balance when you look at liability margin around competition in the market. Our ambition to grow our volumes and managing margin, right? And if we look historically, what we see is that the margin has been around that 100, 110 over the long cycle. So that's something that we plan on. Maybe something that I think gives me comfort around that 100, 110 is that the mix of our deposits have stabilized, right?

The current account has now normalized to before the 0 rate level. The level of term deposits are coming down, the level of savings is going up. So that also bodes well for improving the net interest margin on liability. So is -- to summarize, it's a balance between volume and margin.

Our next question now comes from Farquhar Murray from Autonomous.

Just 1 question for me and really just a follow-up to a degree on Hari's question earlier on fees. I mean the upper end of 5% to 10% full year '25 seems a bit more confident than earlier in the year. I just wondered if that is indeed slightly more confident and also what kind of products or geographies are behind that? And then more generally, what kind of proof points can you give for your kind of view that that's alpha-driven rather than beta.

All right. Well, indeed, that shows more confidence than given just the range. And why is there more confidence? Now we see good mobile primary customer growth. We see the number of -- and as a result of it, you also then do more payments. We see a higher percentage of our customers becoming primary customers. We see a growth in our number of trading accounts that was last year, 4.6 million, is now 4.9 million. So the number of people that trade with us is increasing. We have put in place over the past couple of years, insurance products in private individuals and in business banking.

And now you see and I would say, insurance, I would say, sort of a snowball. It draws down a hill and step by step by step by step, it becomes a bit bigger. And we saw also the number of the lending deals in Wholesale Banking increased, the syndicated loans, so that all helped. But there you see that by broadening our customer base, by broadening the type of service that we provide, we are making this step-by-step bigger, and you see -- and therefore, we are seeing with these actions that a number of people that do fee business with us is just larger and it helps in our confidence.

Just a follow-on, would you have a magnitude on the insurance revenues now?

Yes. It's with this, for the first time that we put it in the presentation, it's now EUR 69 million this quarter. So we split that out now.

And up next, we have Benjamin Goy from Deutsche Bank.

Two questions, 1 follow-up and 1 more general question. The first on the implied increase in the Q4 NII. I was just wondering, Tanate, you mentioned volume growth is part of the assumption there. Is there any specifics that you can share? Is there an uptick expected in long-term corporate lending that you would need to see to get this increase or yes, volumes across the board loans and deposits?

And then secondly, your digital business banking is part of your growth area in the retail business. And in Germany, you entered the Amazon partnership. I mean I know it's only one partnership and probably don't want to over interpret it. But never it looks promising, and it seemed to be below expectation. I was wondering how successful is the digital business banking in your markets without branch-based networks? And how much can growth be driven by that?

All right. I'll answer on the business banking and Tanate on NII. If you look in general, in business banking, business banking consists of 3 parts. Self-employed, SME and mid-corporates and self-employed is being done fully digitally like private individuals, SME is being done mostly digital first, supported by sales teams who are remote and mid-corporates or what you perhaps in Germany would call Mittelstand or maybe even lower Mittelstands, you would do with a relationship model and with sector knowledge supported by digital.

So a large part of activities in business banking are digital. And in Germany, in particular, we started from the low end because we are already with private individuals. And then the move towards self-employed and SME is not so difficult to make because we already have a number of the digital services. In the past, we only did that through indirectly through a partnership with Amazon, but now we approach these customers directly compared to the significant mortgage and customer lending book and wholesale banking book that we have in Germany, business banking in Germany is relatively small, but it's almost like with the insurance. Like I just said, it starts small and then we do it step by step by step, we grow it to diversify our business.

Benjamin, just on the commercial development in the fourth quarter. I think we look at a number of factors in giving our scenario. I think we look at volume, right? We have a longer-term planning estimate of 4%, but we're ending up at least the first half year high at around 7%. So that's something that factor in our thinking. We're still planning on another ECB facility rate cut in September of 25 basis points, and we will take the necessary rate action to maintain a margin of 1%. So those are the consideration that goes into our guidance about commercial NII?

And from UBS, we now have Johan Ekblom with our next question.

Just maybe if we can come back to NII and look a bit further ahead into next year. I mean you flagged in the presentation a further headwind from the replicating book. But then I guess there are some tailwinds on the deposit repricing. If I add those up, that's about a EUR 400 million tailwind into next year and then you plan on 4% volume growth. Are there any other significant drivers than those that we should think about in terms of NII '26 versus 2025? Because I guess that pick up you're flagging for Q4.

It should really continue throughout all of next year, if I'm not mistaken. And then maybe digging a bit deeper on the volume side. I mean, we've seen a couple of quarters of very strong volume growth, and I think you flagged in the past that the strong mortgage growth at a system level in the Netherlands is probably not long-term sustainability levels. But maybe if you can give us an update on what you're seeing there and I also noted that there was quite a strong pickup in the Belgian loan book, in particular in the non-mortgage side, is there anything structurally going on there? I mean you've been losing share in Belgium for a number of years. Is there any chance of a decent turnaround there?

All right. I'll take the view on the mortgages. If we look at mortgages in the different markets, we see actually sales volumes that are growing in all these markets. And the reason being that is that there are still shortages on houses. So that's what we are seeing. Of course, there was a dip in new mortgages in a number of the countries with the uncertainties coming in as a result of the war and the supply chain challenges that we have seen in 2022 and '23, but that is largely gone.

It's gone in the Netherlands, and it's gone in Belgium. So if you look at the Dutch housing market, there is a 17% year-on-year increase expected in terms of number of houses sold in this country. If you look at the Belgium housing markets, we also see an increase of about 15% when we talk about building permits in sum of the months and 18% mortgage production year-on-year up in total compared to the previous year. So we're also benefiting from that. Same in Germany, whereby we saw mortgage lending coming down, new mortgage lending quite steeply to about 60% of what was normal over the years '22 and '23 and '24 gradually recovering, but now really recovering well.

So with a 35% increase in terms of houses sold. So in that sense, we're benefiting from that, again, we have been working on improving our processes over the past years. And, therefore, that helps us in our mortgage share on new production. But in the end, we will only print if we also can make adequate returns. So that is on mortgages. Sorry, then, regarding in Belgium, in business banking, there we saw higher balances, but that has to do with the very large clients, which can be volatile quarter-on-quarter. .

So in terms of looking to 2026, I think on the lending side, we plan on a recovery in terms of lending margin from 125 for 2025 to between 125 to 130 in the coming period. I think that kind of better outlook is driven by the fact that we have seen higher business banking loan growth, right? That is coming in with better margin. High consumer lending growth, again, with better margin and more return to normalization in terms of corporate lending, which has higher margins.

So these are driving our expectations for higher lending margin. And then if you talk about the liability side, I think we give now a bit more details about the impact on replication on Page 26 of our presentation, where you do see that based on the curve prevailing in June, that there's a EUR 300 million reduction in terms of replicated income. But we have also given a better look into 2026 that without any further rate action on savings, we expect that the EUR 1 billion additional income from savings repricing would go to EUR 1.3 billion and term deposits will go from EUR 400 million to EUR 800 million. So that helps compensate from that additional headwind from replication.

We're now moving on to a question from Matthew Clark from Mediobanca.

A few questions again on NII, I'm afraid. Firstly, in terms of the German deposit campaign of the first quarter. Should we still be expecting an outflow from that to come through in the third quarter? I think the special interest rate period ended during the second quarter, but near the end. So just wondering we've seen any of that outflow effects yet or whether that's still to come?

Second question is on commercial NII, in the third quarter, which you're guiding flat. I'm just trying to understand why it can't be more positive. You've got a very positive kind of volume tailwind, even despite the FX and actually the FX has rebounded quarter-to-date, and then flat margin guidance effectively for both the lending margin and perhaps even implicit a bit of an improvement in the liability margin guidance in order to meet that full year 100 basis point guide. So why can't we see commercial NII up already in the third quarter is the question.

Yes. Thanks, Matt. On deposit campaign, yes, that campaign indeed, you have seen it rightly that we started in the first quarter and ended early June. So there was some outflow, but we will continue to see some outflow in the third quarter, at least we expect that based on also what we have seen in previous campaigns, where typically 2/3 of the money stays and 1/3 of the money goes. So that's why we also said that, that may also have an impact in deposit growth in the third quarter because also in the third quarter, people are typically going on summer holiday, and that means that they spent a bit more money than they do in other quarters. So that could be a seasonal effect that we can see -- sort of could see it in the third quarter. Tanate, NII?

Yes. NII guidance. I think what you see is not a full impact of foreign exchange impact in Q2. We expect the full impact in Q3. That's why we think that the impact on FX would be more significant in Q3, hence our guidance on flat commercial NII.

Can I just follow up your guidance on FX, what FX date is that based on? Is that based on the end of June? Or is that based on 30th of July FX rate?

That's based on the end of June FX rate.

And from RBC, we now have Anke Reingen with our next question.

Just very simply, first, on the liability margin. Is it as simple as given the German campaign has finished that the liability margin should everything else being equal, go back to the 100 basis points in Q3. I mean, obviously, everything else being equal. And then on your upgrade to the 2025 ROE, I mean, do you think it's -- I mean, 2027 is also obviously also some time out. But do you think that we'll have better 2025 trends leading to structurally a better outcome in 2027 as well? Or is it more of a timing effect some of the measures coming through quicker?

Okay. Look, we don't give current new guidance on 2027, but we are comfortable about '25, but we're also very comfortable on 2027. Tanate, on liability margin, how is that developing?

On a like-for-like basis, with the German campaign ending, liability margin would be at around 100 basis points. In fact, a little bit better than 100 basis points.

And we're moving to another question, now coming from Juan Pablo Cobo from Santander.

First 1 is regarding expenses. I don't know if you could give us a bit more detail. You are mentioning that you are doing some initiatives on KYC contact centers. It could be useful if you could give some color on how much are you spending on this? And if there is any additional room to cut costs there. Maybe related to still new expenses regarding the incidental items. And maybe just to have some feeling about future initiatives. What could be the payback for instance, of the EUR 85 million wholesale banking business initiative.

So what's the savings that we could expect in the future? And then my second question is regarding your ROE guidance. I don't know if you could give us a bit more detail that upgrades where does it come? Because also it's true that equity is coming down because of -- probably because of the FX impact. So that upgrades on ROE, what part is coming from, actually, better net income and what part is coming from lower equity.

All right. I'll talk about expenses and the initiatives that we've taken in wholesale banking and Tanate talks about ROE. So talking about expenses. And look, I mean, we have experienced so far still higher inflation levels that came in, in our cost line from previous years. We, of course, are investing for growth. So that is end marketing and new products. And that we're partly offsetting by digitalizing our operations further. And there, we do and we're looking currently in various initiatives. And these initiatives have to do with KYC, how can we utilize that? How can we further digitalize our contact center operations with AI, but also with the GenAI chatbots? We look at GenAI in lending. We look also at GenAI in coding. So those are all initiatives that are currently being developed centrally steered. Step by step, we will integrate them in our operations. And as soon as their outcome from that, we will let you know.

With regards to the initiatives we've taken in wholesale banking, where we did the restructuring in the front office side of Wholesale Banking the, 230 FCE, that we took a provision of EUR 85 million. Annualized, the benefit of that will be EUR 40 million, but that will only start to come in, in the course of 2026.

And then, Juan, just in terms of the composition for our updated outlook on return on equity, it's a combination of factors. I think we are more fee-intense in terms of our revenue, which is more ROE accretive, right? This is part of our strategy even going to 2027. I think we operate at the lower end of our cost guidance that also improves profitability and a combination of that improved fee intensity, lower cost drives different guidance on ROE.

[Operator Instructions] And next, we have Delphine Lee from JPMorgan.

Just wanted to go back to NII, to understand a little bit sort of the improvement that you expect in '26, '27 on the lending margin. So from what you said previously, I think it is basically the result of some improving mix with a better growth in kind of higher-margin products? I mean, is that -- is there anything else? Or if you could just comment a bit because yes, just want to understand a bit like how much pickup we should expect on that.

And on the liability margin, just to go back to another question on the liability margin for '27, I mean, from what you're saying, you do have more than a bit in pickup in the replicating income. And it feels like you're basically saying the deposit mix is improving, and you're still getting volumes as well. So I'm not so sure why the liability margin could not meaningfully exceed 110 basis points and the guidance is still unchanged at 100, 110?

I'm not sure how many different ways I can answer the same questions. But I think really on the lending, it's about resumption of commercial lending growth in the wholesale bank, right? That has been solved the last 2 quarters. And in our outlook for the next couple of years, we expect that to resume to a more normal pace. And I think we also expect that consumer loans and business banking loans will take a greater share, and that's why our guidance of 125 and 130 basis points. And then coming to the liability margin, yes, we have some positive tailwind coming at us, right?

The pressure from the facility cuts by the ECBs, according to the forward curve, is coming to an end. So the long-term replication is getting there. But at the same time, we think competition will be normalized, which means that we need to balance between margin and volume on deposits and that we think the guidance of 100 to 110, it's a good number to plan for.

Thank you very much. And as there are currently no further questions in the queue. I'd now like to hand the call back over to you, Mr. van Rijswijk for any additional or closing remarks.

Thank you very much, and thanks, everybody, for your time and your questions. I know it's probably a busy time for you as well, given that many companies are coming out with the figures in this week. So I hope that you deal with it all well. And I hope that you can also enjoy a summer break. Thanks again, and we'll speak, in any case, in 3 months' time again. Thank you.

Thank you for joining today's call. Ladies and gentlemen, you may now disconnect.