Slide 1: Second quarter 2023 results
Second quarter 2023 results ING posts net result of €2,155 mln Steven van Rijswijk, CEO of ING 3 August 2023
Slide 2: Delivering strong value in 2Q2023
Delivering strong value in 2Q2023 Continued primary High share of Growing volume mobilised2) customer growth mobile-only customers1) to finance the transition +227,000 60% €25.0 bln versus +106,000 in 1Q2023 versus 57% in 1Q2023 versus €21.9 bln in 1Q2022 Strong total income growth Increasing return
Slide 3: We are executing our strategy
We are executing our strategy Our purpose Empowering people to stay a step ahead in life and in business Our strategic priorities Superior customer experience Sustainability Straight-through-processing of Organised our first internal Retail customer journeys improved to 69%1) Global Sustainability W
Slide 4: ING's strengths are amplified in a positive rate environment
ING’s strengths are amplified in a positive rate environment Total income excluding incidental income items (in € bln)1) Low rate environment Positive rate environment 11.4 10.1 1.2 9.1 9.0 9.1 9.2 9.1 9.5 8.9 8.7 8.8 1.1 0.6 0.7 0.8 0.7 0.7 0.9 0.7 0.9 1.2 0.5 1.8 0.4 0.3 0.3 0.3 0.5 0.6 0.5 0.5 0.
Slide 5: Well on track towards our 2025 targets
Well on track towards our 2025 targets Financial target 2Q2023 2025 target Drivers ▪ Primary customer growth 5-10% ▪ Increasing package and service fees in daily banking to better reflect cost of service Fee income1) 2.7% annual growth ▪ Growing base in investment products, both in number of account
Slide 6: 2Q2023 results
2Q2023 results Full P&L overview on slide 17 6
Slide 7: Continued strong NII development
Continued strong NII development Net interest income (in € mln) Lending and deposit margin (in bps) Net interest margin (in bps) 3,545 4,012 4,061 135 3,465 3,332 129 127 128 129 71 159 156 76 121 114 137 135 136 3,604 3,860 4,012 4,061 3,389 94 145 140 136 134 71 128 52 -343 -315 2Q2022 3Q2022 4Q20
Slide 8: Continued loan growth and significant deposit inflow
Continued loan growth and significant deposit inflow Customer lending (in € bln) Net core lending growth €2.8 bln 639.5 2.2 0.3 0.9 643.2 0.7 0.3 0.4 1.9 -2.5 -0.2 -0.2 1Q2023 Retail Retail Retail Retail WB WB WB Treasury FX Other 2) 2Q2023 Netherlands Belgium Germany Other Lending DB&TF 1) Other 1)
Slide 9: Fee income growth supported by Wholesale Banking Lending
Fee income growth supported by Wholesale Banking Lending Net fee & commission income per business line (in € mln)1) Net fee & commission income per product category (in € mln) 888 876 888 896 912 888 876 888 896 912 92 96 105 106 131 280 295 318 323 346 226 194 201 217 206 247 238 258 244 253 610 58
Slide 10: Lower operating expenses despite continued investments
Lower operating expenses despite continued investments Expenses (in € mln) ▪ Expenses excluding regulatory costs and incidental items were 6.9% higher YoY 3,071 2,888 ▪ Main driver was higher staff expenses, reflecting the 2,738 impact of indexation and CLA increases across our markets 2,629 291 525
Slide 11: Low risk costs reflecting high quality and resilience of the loan book
Low risk costs reflecting high quality and resilience of the loan book Risk costs per business line (in € mln)1) Stage 2 ratio2) Stage 3 ratio 403 11.2% 1.5% 10.2% 10.8% 1.5% 1.5% 1.4% 128 269 8.9% 1.4% 152 202 65 6.6% 7.1% 7.2% 6.9% 1.4% 98 7.0% 1.4% 88 274 1.4% 1.4% 203 242 5.3% 1.3% 1.4% 1.3% 1.3
Slide 12: CET1 ratio improved to 14.9%
CET1 ratio improved to 14.9% CET1 capital ratio development (in %) 14.8% 14.4% +0.3% +0.2% 14.9% ~12.5% -0.5% -0.0% 10.7% 1Q2023 Announced share Pro forma 1Q2023 Profit added Other capital RWA 2Q2023 Basel IV CET1 ratio CET1 ratio buyback CET1 ratio to CET1 movements CET1 ratio target Capital ratio
Slide 13: Wrap up and Q&A
Wrap up and Q&A 13
Slide 14: Appendix
Appendix 14
Slide 15: Attractive and growing shareholder return
Attractive and growing shareholder return Increasing earnings per share Attractive shareholder return Based on (announced) payment date 12.5% 10.7% 15.3% 9.4% YTD 1.28 1.24 11.2% 6.7% 9.4% 9.2% 5.4% 1.01 0.70 0.50 7.2% 2.07 0.67 0.68 0.41 4.8% 1.21 1.23 1.27 1.02 0.74 0.64 Dividend 0.60 0.58 ban 2)
Slide 16: Long-term benefit from replicating portfolio
Long-term benefit from replicating portfolio Drivers of liability NII ▪ Liability income is driven by replicating portfolio, deposit pass-through and volumes ▪ Retail eurozone replicating portfolio of €~480 bln ▪ ~45% is <1 year, which has helped to quickly restore liability margins once interest ra
Slide 17: 2Q2023 results overview
2Q2023 results overview In € mln Reported P&L Volatile items P&L excluding volatile items Net interest income 4,061 2 4,059 Net fee and commission income 912 0 911 Investment income 1 -0 2 Other income 785 -23 807 Total income 5,759 -21 5,779 Expenses excl. regulatory costs 2,534 6 2,528 Regulatory
Slide 18: Volatile income and expense items
Volatile income and expense items Volatile items (in € mln) 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 WB/FM – valuation adjustments 90 -15 -2 -10 33 Capital gains/losses 8 -3 0 15 -0 Hedge ineffectiveness1) -31 -431 -71 35 -46 Other items income2) -155 -218 -319 -69 -6 Total volatile items – income -89 -66
Slide 19: Hyperinflation accounting in Türkiye
Hyperinflation accounting in Türkiye Application of IAS 29 to consolidation of ING in Türkiye Impact on results (in € mln) ▪ We applied IAS 29 (‘Financial Reporting in Hyperinflationary 1Q2023 2Q2023 Economies’) to the consolidation of our subsidiary in Türkiye, Profit or loss effective as of 1 Janu
Slide 20: Accounting asymmetry impacting net interest income
Accounting asymmetry impacting net interest income Treasury interest rate differential (in € mln) WB Financial Markets (in € mln) 33 36 359 47 443 349 18 267 261 282 287 26 184 120 346 452 41 -15 176 215 345 -102 -137 19 27 22 -234 -225 78 78 50 41 47 -37 -141 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 2Q20
Slide 21: Developments in our strategy enablers
Developments in our strategy enablers 4Q2022 2Q2023 2025 targets Workload on (private) cloud 52% 57% >70% Seamless digital experience Customer online traffic using Touchpoint 61% 61% >90% Adoption of shared engineering platform 48% 55% >90% Scalable Tech & Operations 1) Digi index score 67% 69% >75%
Slide 22: Well-diversified lending credit outstandings by activity
Well-diversified lending credit outstandings by activity 1) ING Group Retail Banking Wholesale Banking 5% 12% 17% 32% 21% 2% 14% €810 €550 6% €550 €259 bln 19% bln bln bln 16% 22% 60% 17% 65% 4% 8% 68% 12% Retail Banking Residential mortgages Mortgages Netherlands Lending Wholesale Banking Consumer
Slide 23: Wholesale Banking lending credit outstandings
Wholesale Banking lending credit outstandings 1) Loan portfolio is well diversified across geographies… …and sectors Wholesale Banking Wholesale Banking 1% 13% NL 2% 9% Real Estate, Infra & Construction 13% Belux Commodities, Food & Agri 2% Germany 30% 11% TMT & Healthcare 10% Other Challengers Tran
Slide 24: 2Q2023 provisioning per Stage
2Q2023 provisioning per Stage Stage 1 provisioning (in € mln)1) Stage 2 provisioning (in € mln) 1,2) Stage 3 provisioning (in € mln) 2) 52 407 48 37 21 318 2 98 86 23 33 4 239 16 -9 230 -78 -50 -39 177 197 35 31 17 -117 6 -48 11 -194 43 1 6 -45 161 124 -31 8 -15 167 141 155 116 -14 -190 70 2Q2022 3Q
Slide 25: Important legal information
Important legal information ING Group’s annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS-EU’). In preparing the financial information in this document, except as described otherwise, the same accounting principles are