What ING Group (ING) Said on Its Q3 Earnings Call

Key Points

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• Strong Q3 performance: ING reported 16% return on tangible equity, with total income up 6% year over year as commercial net interest income rose 13% and fee income increased 9%. Customer growth, lending, deposits and investment inflows also remained robust.

• Major capital return and restructuring: ING announced an additional €1.9 billion distribution, including a €1.65 billion share buyback and a €250 million cash payment. Its Wholesale Banking unit will be reorganized as Corporate and Institutional Banking, involving about 400 redundancies and expected annual savings of €75 million from 2028.

• Positive outlook: The bank expects full-year commercial net interest income near the upper end of its €16.8 billion–€17 billion range and remains on track to exceed its 2027 income, expense and return targets, while maintaining a 13.3% CET1 ratio.

ING Group (NYSE:ING) said its third-quarter performance was supported by customer growth, higher lending and deposits, expanding fee income and operating leverage, while the bank announced a €1.9 billion additional capital distribution and a restructuring of its Wholesale Banking unit.

Chief Executive Officer Steven van Rijswijk said the company’s “Growing the Difference” strategy, launched in 2024, has driven profitability ahead of its previous targets. ING reported a 16% return on tangible equity in the third quarter, with its four-quarter rolling return improving by two percentage points from a year earlier.

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The bank added 259,000 mobile primary customers during the quarter, bringing growth over the past 12 months to more than 1.1 million. ING said it has added 900,000 retail customers over that period, reaching more than 41 million total customers. Van Rijswijk said primary customers tend to have deeper product relationships, higher balances and greater fee-generating activity.

Income growth and customer activity

Total income rose 6% year over year, according to Chief Financial Officer Ida Lerner, driven by growth in commercial net interest income and fee income. Commercial net interest income increased 13% from the prior year and rose €161 million sequentially, supported by customer balance growth, commercial pricing and the continued repricing of the bank’s replicating portfolio of customer deposits.

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ING expects full-year commercial net interest income of €16.8 billion to €17 billion, with a liability margin of about 110 basis points. Lerner said the bank was looking toward the upper end of that range based on current conditions, while noting continued competition for deposits.

Fee income increased 9% year over year, including 10% growth in Retail Banking and 9% growth in Wholesale Banking. The company expects to generate €5 billion in fee income for the full year, reaching that target one year earlier than originally planned.

• Net core lending increased €11 billion during the quarter, including €8.5 billion in Retail Banking and €2.5 billion in Wholesale Banking.

• Net core deposits rose €12.1 billion, with €9.4 billion contributed by Wholesale Banking payments and cash-management activity.

• Assets under management recorded €20 billion of year-over-year net inflows, while ING added 100,000 investment-product customers during the quarter.

• Sustainable volume mobilized increased 19% year to date.

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Van Rijswijk said lending and deposit volumes grew at annualized rates of 6%. He noted that mortgage demand remained strong in several markets, including the Netherlands, Germany, Australia, Italy and Spain, though he said higher interest rates and economic uncertainty could eventually moderate loan growth.

Costs, restructuring and Wholesale Banking changes

Expenses excluding regulatory costs and incidental items rose 3.6% year over year, reflecting investments in new revenue streams in retail markets and transaction banking capabilities. Expenses were broadly stable from the second quarter as lower headcount and marketing costs offset wage increases in the Netherlands.

ING reported €63 million of restructuring costs in the third quarter, which it expects to produce €40 million in annual savings once fully implemented. The bank also announced a broader restructuring of its Wholesale Banking organization, which will be renamed Corporate and Institutional Banking.

The changes are intended to streamline the business and place greater emphasis on client relationships and a more diversified mix of transaction services and financial-markets revenue. ING expects approximately 400 redundancies globally and plans to book about €175 million in restructuring provisions in the fourth quarter. The program is expected to result in annual cost reductions of about €75 million from 2028 onward.

“We will create a more streamlined structure which supports closer relationships with clients,” van Rijswijk said.

Risk costs and capital distribution

Total risk costs were €403 million in the quarter, including €111 million related to an IFRS model update. Lerner said risk costs excluding the model update and charges related to significant risk transfer, or SRT, transactions were below ING’s through-the-cycle average of 20 basis points.

Net additions to stage-three provisions totaled €239 million, mainly related to collective provisions in consumer lending due to portfolio growth and model refinement. The company said stage-three individual risk costs remained modest and reiterated confidence in loan-book quality.

ING generated about 80 basis points of common equity tier 1 capital during the quarter and ended with a CET1 ratio of 13.3%. Risk-weighted assets fell €4.3 billion, including €3 billion of relief from SRT transactions in Wholesale and Retail Banking.

The company’s €1.9 billion additional distribution consists of a €1.65 billion share repurchase program that commenced on the day of the call and a €250 million cash payment planned for January. ING said both components are funded from results reserved outside CET1 capital and will not affect its CET1 ratio.

Outlook and strategy update

ING said it remains on track to add 1 million mobile primary customers during 2026. It expects total income to exceed its original 2027 target by at least €1 billion and operating expenses to come in about €300 million below its original 2027 target. The bank also expects its 2027 return on tangible equity to exceed its prior target by at least two percentage points, to more than 16%.

The company plans to provide its next strategic update and 2030 financial targets at a Capital Markets Day scheduled for June 14, 2027, in London.

About ING Group (NYSE:ING)

ING Groep N.V. is a Netherlands-based international banking group headquartered in Amsterdam. Through its principal banking operations, ING provides retail and commercial banking services to individuals, businesses and institutions, with a strong emphasis on digital banking and mobile financial services.

The company’s products and services include current and savings accounts, consumer and residential lending, business loans, payments, investment services, and wholesale banking. Its wholesale banking operations serve corporate and institutional clients with services such as lending, transaction banking, financial markets, and corporate finance.

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