Good morning. This is Laura welcoming you to ING's 1Q 2025 Conference Call. Before handing this conference 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 businesses, 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, Laura. And good morning, and welcome to our results call for the first 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; our CFO, Tanate Phutrakul, and we had a good start to 2025. Today, I will show you how the strength of our franchise enabled continued commercial growth during the first quarter, as evidenced by exceptional growth in deposits and higher mortgage volumes. I will also explain how our strategy and strong business fundamentals enable us to navigate the current geopolitical and macroeconomic uncertainty. And as a leading European bank, we are well-positioned to support the European economy and capture growth opportunities as we remain confident in our outlook. Later in the presentation, Tanate will walk you through the quarterly financials, including the financial impact from the progress we're making on our strategic priorities. And at the end of the call, we will be happy to take your questions. Now let's move to Slide 2. And this slide gives more details on our strong growth trajectory in the first quarter. Our relentless focus on providing superior value for our customers has again proven to be a key differentiator. The total number of private individual customers increased to more than 40 million, and the number of customers choosing us as their primary bank grew as well. We also recorded significant growth in our loan book. Net core lending and retail banking grew by €8.6 billion, which was primarily driven by mortgages, while we also captured growth in business lending and consumer lending. In Wholesale Banking, we saw a modest decline in lending, mainly due to seasonal volatility in working capital solutions, but also as a result of consistent capital optimization. On the liability side, we saw exceptional growth driven by a strong inflow in Retail Germany after a promotional campaign. Net quarter positive growth in Wholesale Banking reflected higher short-term client balances in our cash pooling business. This commercial growth also resulted in a significant increase in fee income, which was 10% higher than the first quarter of last year. We continue to support clients in their sustainability transitions with the volume of sustainable finance mobilized, rising 23% from the first quarter of last year to €30 billion. And I'm proud to say that ING is the first global systematically important bank to have climate targets validated by the Science-based Targets Initiative. Slide 3 summarizes how our strategy and strong fundamentals enable us to navigate the current turmoil. And let me start by saying that the introduction of tariffs and the current macroeconomic uncertainty have led to lower growth forecasts worldwide. However, we remain confident in our ability to grow in line with our targets, as our diversified presence allows us to capture opportunities in different geographies and across various sectors. Most of our lending growth is driven by residential mortgages, which is less sensitive to changes in the economic outlook. And as one of the largest and most diversified wholesale banks, we’re also well-positioned to support the economy and benefit from the investment plans across Europe. On asset quality, although the potential longer-term indirect impacts from the tariffs are not yet clear, we are confident that our prudent risk management framework will also prove itself going forward. Around 65% of our portfolio is fully or partially secured. We have a large and growing residential mortgage book with historically low risk costs. And in our main markets, house prices remain high and unemployment rates remain low, as illustrated on the next slide. In Wholesale, we have further increased the portion of our exposure to investment-grade clients. Then our funding and liquidity position remains very strong. As you know, around 70% of our balance sheet is funded by granular retail deposits, and we maintain strong funding and liquidity positions in all currencies. And lastly, on interest rates, we have again been volatile over the past weeks. We have proven our ability to manage our margins by taking disciplined repricing actions, and we can confirm our outlook for the liability margin for 2025 to 2027 periods. Then we move to Slide 4. And here you can see how market dynamics and our position as the leading European mortgage bank enable us to achieve continuous growth. The outlook for mortgages is positive, and we expect the market to continue growing. Mortgage demand in some of our markets, such as the Netherlands, have already recovered after a temporary dip when interest rates went up sharply. And in other countries, such as Germany, we still expect a further recovery. In addition to this increased demand, volume growth is also supported by a sustained increase in house prices across most markets. At ING, we have been able to strengthen our mortgage offering and significantly increase our market share in those growing markets. In the Netherlands, for example, our market share in new production is currently 17% versus 10% a few years ago, supported by our strategy, which focuses on digitalization and flexible operations to facilitate new production. Default rates in our mortgage portfolio remain very strong, mostly driven by the constant low unemployment rates in our largest markets. The average loan-to-value in our mortgage book is 56%, with a low Stage 3 ratio below 1%. And on the next slide, I will show that we see growth opportunities in Wholesale Banking as well. Because as we are one of the most geographically diversified banks in Europe, with leading positions in lending across many markets, we are really well positioned to support the investment initiatives. We have strong expertise in key focus sectors, such as infrastructure and TMT, and we have adopted a more proactive stance on defense-related funding. In this sector, we, of course, have an ESR policy to make sure that what we finance is responsible, but within that context, we’re open to finance defense initiatives to safeguard European security. And demand there is picking up, and we see this reflected in our pipeline as well. And while we do see a growth opportunity in Europe, we will also remain focused on optimizing our capital usage in Wholesale Bank, as we have shown over the last few quarters. On Slide 6, we highlight that our robust capital position and strong results have allowed us to consistently distribute cash and deliver value to shareholders. Our CET1 ratio came in at 13.6% at the end of the first quarter, and this includes the impact of the implementation of Basel IV and the 20% stake in Van Lanschot Kempen. And with the acquisition of this financial stake, we have further increased the capital allocation towards Retail Banking in line with our strategy. Today, we announced another share buyback of €2 billion. And including this amount, we have distributed over €28 billion to shareholders since 2021, and we are committed to providing an attractive shareholder return going forward. Our CET1 ratio target is unchanged at 12.5%, but we'll steer to end this year at a slightly higher level, as we take the prevailing macroeconomic and geopolitical uncertainty into account in line with our distribution policy. And we now steer on the CET1 ratio between 12.8% and 13% by the end of 2025. We will update the market on next steps with our third quarter results this year as per our normal rhythm. Then on to Slide 7. I would like to emphasize again that we remain confident in our ability to execute on our strategy even in these more volatile markets, and this is also reflected in our strong performance in the first quarter. And we, therefore, reconfirm our outlook for 2025, including the refinement of our CET1 target and reiterate our targets for 2027. And now I will hand over to Tanate, who will take you through the results of the first quarter in more detail, starting on Slide 9. Tanate, over to you.

Thank you, Steven. I would like to start on Slide 9, where we show the development of our total income, which increased significantly compared to the previous quarter. Commercial NII was resilient and was supported by exceptional growth in deposits and the continued growth of our mortgage portfolio. Fee income increased significantly and grew by 10% compared to last year. We're confident that most of this growth is structural, and I'll explain why in a few minutes. Lastly, all other income, which is a combination of other NII, investment income and other income was supported by strong client activity in Financial Markets and good results in Treasury. Now let's move to Slide 10, where we show the growth in customer balances. What is clearly visible in this slide is that our commercial growth has continued in the first quarter of this year. Our net core lending grew by €6.8 billion, which was again mostly driven by strong performance in the residential mortgage market. As Steven already explained, we have been able to further increase our market share in a growing market situation, which resulted in €6 billion of growth in mortgages. We were also able to grow in consumer lending and business lending. In Wholesale Banking, we saw seasonal volatility in balances for Working Capital Solution, and we continue our efforts to optimize capital usage. On the liability side, we saw core deposits increase by almost €23 billion in the first quarter due to strong performance in both Retail and Wholesale Banking. This strong growth underscores our ability to attract deposits. In Retail, growth was particularly coming from Germany, mainly driven by a successful promotional campaign. In the Wholesale segment, the growth mainly reflected higher client balances of our Cash Pooling business, which can be volatile. On Slide 11, you can see our commercial NII was resilient. Liability NII increased, a strong growth in customer balances, and our repricing action compensated for lower ECB deposit facility rates. It also included a structural shift from other NII to liability NII. On lending NII, it was broadly stable. However, the growth in balances was offset by lower margin, which is driven by a continued mix shift towards mortgages, which have a higher ROE, but a lower margin. It also reflects the impact of having two fewer days in the quarter. On commercial net interest margin, which is based on commercial NII was stable quarter-on-quarter. Turning to Slide 12. Fee income growth year-on-year was again almost double-digit, mostly driven by structural revenue drivers or, as we call it, alpha. Growth in Retail Banking was driven by strong performance in investment products as well as higher daily banking fees. The strong performance in investment products was driven by a further growth in active investment product customers and an increase in assets under management and much higher customer trading activities. Daily banking fees rose on the back of strong customer growth and an updated pricing for payment packages. In addition, Retail Banking grew its fee income from insurance products and also from lending, but that was more than offset by lower fee from lending in Wholesale Banking. Given the strong performance across the bank, we remain confident that we can grow our fee income by 5% to 10% this year and reaching our €5 billion goal target in 2027. On Slide 13, we show the development of all other income. Financial Markets had a strong quarter, as we benefited from increased client activity and favorable market conditions. Treasury had a good quarter as well with income up on both comparable quarters, mainly driven by strong results from FX ratio hedging. And we also received an interim dividend from our stake in the Bank of Beijing. On Slide 14, our operating expenses, excluding regulatory costs and incidental items increased by just over 6% in the first three months of the year. This is in line with our guidance, and we still expect these expenses to end up in line with our outlook for the full year 2025 or between €12.5 billion to €12.7 billion. This increase was mainly driven by the impact of inflationary pressure and our continued investment in business growth, particularly in customer acquisition, developing products for new customer segments and in building and scaling our tech platform. Operational efficiencies compensated for a part of these increases, as we continue to digitize our services and infrastructure to further increase our operational leverage. We have, for example, used generative AI to improve the customer proposition in contact centers and in our Know Your Customer processes, which has also resulted in lower expenses. On the risk costs side, on the next slide, Slide 15, total risk cost was €313 million this quarter or 18 basis points of average customer lending, which is below our through-the-cycle average. Net addition to Stage 3 provision amounted to €215 million and were mainly related to collective provisioning in the consumer and business lending portfolio. Individual Stage 3 cost decreased, reflecting lower new inflows and low provision in Wholesale Banking, driven by repayments and recoveries. Stage 1 and Stage 2 risk costs were €98 million, mainly reflecting an update of the macroeconomic forecast, model updates and some risk migration. We remain confident in the quality of our loan book. This is also reflecting a decrease in Stage 2 and Stage 3 ratio. Slide 16 shows the development of our core Tier 1 ratio, which is increasing slightly from the levels of year-end 2024, as higher risk weight was more than offset by strong capital generation. The impacts of Basel IV and other model updates on our risk-weighted assets was a negative €1.4 billion. So that's an improvement on capital. If we exclude this impact and the impact of foreign exchange movements, credit risk weight increased by €5.2 billion, mainly driven by volume growth in Retail Banking. Operational risk weight remained flat, while market risk weight increased by €1.3 billion, again, excluding the impact of Basel IV and other model updates. Today, we announced our next share buyback program of €2 billion, which will have a pro forma impact of 59 basis points on our core Tier 1.

Thanks, Tanate. And indeed, I would like to recap a few key messages before going into the Q&A. First of all, we have had a very strong start of the year, with outstanding commercial growth, resilient commercial NII and strong fee growth, which has allowed us to announce the next share buyback program. Furthermore, our strategy and strong fundamentals enable us to navigate the current geopolitical and macroeconomic uncertainty. As one of the leading European banks, we're well positioned to support the economy and capture growth opportunities, and we are, therefore, confident in our ability to execute on our strategy going forward and to reconfirm our 2025 outlook and 2027 targets. And with that, I would like to open the floor for Q&A.

Thank you. In the interest of time, we kindly ask each analyst to limit themselves to two questions only. Thank you. We will now take our first question from Benoit Petrarque of Kepler Cheuvreux. Your line is open. Please go ahead.

Yes. Good morning. So I've got two questions. The first one is on the liability and lending margin, and the second one is on the share buyback. So maybe starting with the liability margin, I guess the 101 bps posted in Q1 is a strong achievement versus expectations. What is your view on liability margin for the rest of the year? I think in the previous quarter, you put a comment that it could drop temporarily below the 100 bps mark. I'm just wondering is it still something you expect? I don't see any similar comments in the Q1 presentation. And then on lending margin, also again, could you maybe give us a bit of a kind of update on the guidance, which was at 130 bps before? And also clarify the impact of day count, specifically in the first quarter. And also if you continue to expect the mix effect to be negative in the coming quarters on lending margin. And then maybe just briefly on buyback, it was just to get a bit of a view of how you got to the 12.8%, 13%. What have been the considerations taken on board to get to that level? Thank you very much.

All right. Thank you very much, Benoit. And Tanate will take the questions on liability and lending margins, and let me answer you the question with share buyback. Look, we have a target of around 12.5%. Clearly, the world now knows quite some volatility and macroeconomic uncertainty given the tariffs and all the discussions that are going on. And in that setting, we have said we want to be prudent. And in that mist or fog, if you want to call it that way, we are targeting for 2025, 12.8% to 13%, but our longer-term target remains 12.5%.

Benoit, to answer your question on liability NII first, I think our expectation is that our net interest margin on liability will remain at roughly similar levels in Q2, okay? What has – we've seen in Q1 in terms of our optimism is that the volume growth has been strong. As you know, in a number of markets, we have had significant rate cuts, including the Netherlands, and we have seen no reduction in terms of balances based on those rate cuts, which means that if we had to take further rate cuts, we are confident in the resilience of our liability franchise, okay? Then in terms of lending margin, yes, so the lending margin is coming down a little bit in Q2. I think it's driven by three impacts. First is the day count impact, which has an impact of approximately 1.5 basis points. The lending mix has changed, particularly strong growth in terms of mortgages, and the mix in terms of wholesale banking has also changed. So those are the second. And the third is that the funding of the mortgage book has lengthened somewhat in light of interest rate movements. So that is something on lending margin. But I think guidance for the rest of the year, we don't give that guidance on lending margin. But I give you the components of what's moving the margin during the course of Q1.

Great. Thank you very much.

Thank you. We will now move on to our next question from Giulia Aurora Miotto of Morgan Stanley. Your line is open. Please go ahead.

Yes. Hi. Good morning and thank you for taking my questions. So I – the first one is a quick follow-up on the 12.8% to 13% just to reassure the market. Did that involve any ECB request? And if the situation normalizes, do you plan to go back to 12.5%? And then secondly, to stay on the capital topic, during the quarter, you have taken a stake in Van Lanschot, and there have been headlines around potential M&A activity in Spain and Italy. So can you please comment on whether you are indeed looking at something in Spain and Italy and whether you would consider buying something which is sort of an old school bank with branches even if you are mostly digital in these countries? Thank you.

All right. Thank you, Giulia, for your questions. And now let me confirm that the 12.8% to 13% is our own decision, it has nothing to do with the ECB. So this was not – this has not been discussed with ECB, that as such we have just taken it on decision based on what we see, nothing more, nothing less. And the goal remains 12.5%, and everybody knows that, including the ECB. You start with Van Lanschot, but you basically – the question is about, are you looking at acquisitions? Or – and then where are you going to look at acquisitions, I believe? And would you buy an old school bank? We are very pleased with our autonomous strategy, where we also during Capital Markets Day said that we want to diversify more, diversify within existing segments in Gen Z or mass affluent, for example, whereby we want to provide more specific propositions to our existing customer base. Diversification in terms of deeper product capabilities and wholesale banking and financial markets and transaction services in the markets in which we're active and diversification in terms of filling in the blanks, if you will. If for example, Business Banking, Consumer Lending, Private Banking and Wealth Management, markets where we are active, but don't have these activities as yet. We have these activities, for example, in Belgium and the Netherlands, but not all of them – and Poland, but not all of them in Germany and Spain and Italy and other markets. So that's what we're doing, and we're good at it. At the same time, if we can accelerate that growth, if it is a skill or a product that we do not have or if it can increase our domestic market position because retail is still largely a local skill game given the compartmentalization of regulation in Europe, then we will look at it, and we are looking at it in all the markets in which we are active. And then it has to also fulfill our strict M&A and ROE criteria that we have, and that's how we will look at it. And when there is something to tell you about it, we will, but there's currently nothing to comment about any specific opportunity.

Thank you.

Thank you. And we will now take our next question from Hari of KBW. Your line is open. Please go ahead.

Hi there. Can I ask on Slide 23, and I appreciate you're quite consistent here in getting the quarter-end forward curve, but just given the rates have been quite volatile, if we roll forward a month, I would guess that the kind of the €9 billion in 2025 would move towards €8 billion. But I'm just wondering with the steeper yield curve, is that kind of €10 billion number in 2027, is that a little more sticky? And then my second question is on the Wholesale business. I can see the RWAs are coming down and that's in line with the strategy. But I was a bit surprised that the FTEs are increasing. It's up 5% this quarter and up 11% year-on-year. So any color on that would be helpful.

Thank you very much, Hari. I will give the question on Page 23 to Tanate. When it comes to the FTE in Wholesale Banking, yes, it has to do with more fee business so that we are broadening our capabilities in financial markets, which by the way had a very good quarter. We're putting salespeople more on the ground to be able to diversify better. And that's why we continue to invest there as well. And that's why you see the FTEs going up. So we have scalability in our operations. And when we reach more scalability, we can also invest more in either our sales capabilities, our product capabilities or our tech platforms.

Hari, on Page 23, as you see, we're consistent in providing this every quarter to show the impact. And I think what we have done also during the course of the last six months has been extending the duration of the replication so that instead of 50-50 duration, we have now gone to 55-45, which should help stabilize a bit the replication results in 2026 and 2027. We also are quite – demonstrating quite strong engine in terms of liability growth in the first quarter, and we expect that, that trend to continue into the rest of the year. And lastly, of course, we manage for margin, right? That you can see that we have taken significant rate action in the first quarter of this year with a full-year impact of €1 billion, and that our room in terms of cutting rates remains in place. For every 10 basis points cut, it means €400 million additional revenue. So those are some of the components to describe a bit what's happening and how levers that we could pull in terms of stabilizing our replicated revenue.

Thank you.

Thank you. We will now take our next question from Farquhar Murray of Autonomous. Your line is open. Please go ahead.

Good morning. Just had two questions, if I may. Firstly, I mean, deposit volumes are clearly running better than the 4%. You seem to expect that to continue to a degree and replicating dynamics are better. So I just wondered why you perhaps maybe aren't hedging NII guidance a bit better. On the other hand, I presume the 130 bps on lending margins, they're probably a little bit stretching given the dynamics you outlined earlier. And then secondly, on the CET1 targeting for full-year 2025, I mean, it's early in the year, the tariffs discussion could frankly settle out as quickly as it flared up. In those circumstances, would you revert back to the 12.5% CET1 target for this year end? Or when realistically might you do that? Thanks.

On CET1 target, look, there is quite a bit of uncertainty. And we want to at least remain consistent. There is a consistency right now. So for 2025, we stick to that target. And then depending on how things will be, then we're going to move back to the 12.5%.

Then on liability margin and the volume outperformance in Q1, but I emphasize it's only Q1. So in fact, it's early in the year. We are much more optimistic and confident in maintaining our net interest margin or liability, but no change in guidance for now.

Thanks.

Thank you. We will now move on to our next question from Tarik El Mejjad of Bank of America. Your line is open. Please go ahead.

Hi, good morning everyone. Just two questions from me as well. On the margins first, can you explain a bit the deposit growth strategy you have in Germany? And this campaign targets what exactly, what type of deposits? And what's your plan for the rest of the year on this? And still on the margins, you mentioned before, Tanate, that your replicated portfolio was purely to replicate the positive behaviors and you're not playing with duration or mix, and now, you've shifted from 40-50 to 50-50 and now 55-45. How is that – I mean, are you still willing to actually pull it even further if the rate pressure intensifies to maintain your leverage margin around 100 and 110? And then on the capital return, I mean, I just – I mean, to follow up on Farquhar's question on reversing back, I mean, I just want – I don't want to be too cynical here. But if, let's say, I mean, situation improved a bit better – I mean, this capital, higher capital target is not also a bit to gather or retain some capital for potentially M&A? Or is it purely macro-driven kind of uncertainty driven? Yes, I'll keep it here? Thank you.

All right. Thanks, Tarik. I'll take the one on capital and on deposit strategy, and then, Tanate will talk about duration. On the deposit strategy, look – I mean, we have a great deal of experience on these customer acquisition campaigns, and we've done this for decades. So we know fairly well what to do, at which point in time and what to expect. And, therefore, we've seen that in Germany previously as well, but also in other markets that we deploy these campaigns. And these campaigns, basically, then are aimed either at fresh money that should show an NPV – as a fresh money of existing customers that would show a positive NPV on a six to 12-month basis or if they are linked to new-to-customer banks and they show a two to three-year payback period. And again, the target, of course, is that we make these guys primary customers, because then they will do more business with us at higher ROE levels. And so these campaigns are very targeted, very precise, very data-driven, which means that we continuously monitor what they do, how much money will remain in the bank, and we've seen the success of that also in the past couple of years. And that's how we go about that. And again, you saw it this quarter that we had a very successful campaign in Germany. And in each market, we continuously look at and discuss where and how do we plan these campaigns to get money in and get more customers to work with us because it drives scalability and that drives ROE. Tanate?

Yes. On duration, you're right, basically, we manage duration on a basis of maintaining stable balance sheet, right? That is what is our hedging goal. And as interest rates start to decline sharply in the next – the last few months, we have also adjusted the duration to the anticipated client behavior situation that we have. And as a side effect of that, by increasing the duration it brings further stability to our income in 2026 and 2027.

And then on the third question, I forgot, Tarik, everybody is entitled to their own cynicism. But I can assure you, this is only because of macroeconomic circumstances, nothing else.

Okay. Thank you very much.

Thank you. We'll now take our next question from Benjamin Goy of Deutsche Bank. Your line is open. Please go ahead.

Good morning. Two questions please from my side. So the first on loan growth. You mentioned a healthy pipeline in Wholesale Banking, but maybe you can speak a bit about how much more specific it has become and how much confidence you have in an improving outlook from here. And then secondly, on Van Lanschot, specifically, maybe you can explain again why a minority stake is the right amount of investment? Thank you.

All right. I think if you look at loan growth in the Wholesale Bank, look, what we do see is very healthy pipelines. And I think that if you look at our Wholesale Bank, which has good global diversification, but also a very good diversification in Europe, with strong typically top five lending positions in most of the markets in which we're active in Europe, which is 20-plus, then we can benefit quite a bit from, let's say, the investment push that Europe wants to give in infrastructure and in defense and in technology. And also the plan that Germany has. It will always take a while for these plans to come to fruition. So the pipeline is healthy. The question will be the conversion. So – and of course, there is uncertainty. We've seen that industry and consumer confidence parameters are relatively low. So we need to see what the conversion levels are, but we are confident that when they come, that we are then a bank that will be able to benefit from it, and it's just a matter of time when the uncertainty will lift. So that's where we currently are, and that will then result in a higher or lower conversion. On Van Lanschot, I mean, like we also said during Capital Markets Day, we want to diversify further. But also want to diversify our capital more towards the Retail segment, which has more sustainably higher return levels. And that's why we have a capital velocity program in Wholesale Banking, whereby we increasingly use all kinds of techniques and insurances and secondary sell-downs to reuse the capital more often in Wholesale Banking until we grow faster in Retail Banking. And as part of this, with Van Lanschot, which is also a retail player, we have also moved part of our capital, again, into the Retail Banking space, which is exactly what we wanted to increase the weight of capital from wholesale to retail. And this adds to it.

Thank you.

We will now take our next question from Delphine Lee of JPMorgan. Your line is open. Please go ahead.

Yes. Thank you for taking my questions. So my first one is going back to liability margins. So just wanted to understand a little bit with the actions – I mean, so with the actions you've taken on deposit rates that leads to total €1 billion, I mean, what is – is your target for the full-year still €1.3 billion? Or do you think – I mean, how much more can you really get, just to understand the moving parts within NII given the low rates? And then my second question is just on sort of cost of risk asset quality. I've seen you've increased your Stage 1, Stage 2 provisions, if you don't mind just reminding us a little bit your assumptions macro-wise under IFRS 9 accounting? Thank you.

All right. I'll give the question on liability, the €1.3 billion to Tanate, and on Stage 1, Stage 2 to Ljiljana.

Let me start. Thank you very much for the question. You've seen the asset quality in the first quarter has improved when it comes to all of the indicators. And what we are specifically proud of is that the Stage 3 ratio has decreased and specifically provisions for Stage 3 have decreased, specifically on the individual side. You are right, Stage 2, combined also with Stage 1, amounts to €98 million this quarter, and it's the impact of several parts. First is, correct, the macroeconomic forecast. And when we do the macroeconomic forecast, we use the external unbiased scenarios, and we update our models regularly in order to make sure that they are objective and that they are following the latest, I would say, outlooks. That's one. Secondly, you've seen in the first quarter differently than previously that there has not been significant overlays decrease. That means that the risk cost as shown is in Stage 1 and Stage 2 are the real risk costs coming from the, as I say, macroeconomics, risk migration and some model also changes. However, normalized, we do see the situation still below through the cycle. And we do expect to remain there.

Okay. Just on liability margin, again, I think you go back to Page 23 that shows the replication impact. I think a couple of points to add there. One is that the savings rate cuts that we have taken year-to-date, May 6, results in €1 billion. But we didn't explain further that, in fact, the term deposit rate cuts also has a positive impact on top of that €1 billion. So that's the first point to make. The second is that, as you know, in a number of markets, we are not the best price in terms of deposit costs. And yet by our rate actions, our deposit volume continues to be stable or increasing. So that gives us confidence, and that's because of the granular levels of our retail deposits, which average around €15,000 per person. And then the last point is that our blended cost of eurozone deposits for savings and term deposits is 143 basis points at the end of Q1. So we do have room for further rate action if required. And every 10 basis points reduction means €400 million annualized impact.

Great. Thank you very much.

Thank you. We'll take our next question from Matthew Clark of Mediobanca. Your line is open. Please go ahead.

Hi. I have some questions on the replicating portfolio, please. So firstly, just to understand, you said that the shift from 50% to 55% invested over one year happened over the last six months, can you be a bit more – was it genuinely a gradual implementation? Because I wasn't aware in prior commentary that you'd said that it had – that it was moving. And then what duration or what maturity instruments have you been buying at in order to make that shift? And what's the overall updated duration of the replicating portfolio overall now? I think it used to be 2.4% you guided, but presumably, that's moved up as a result of this shift. So some commentary there, please.

All right. I give the questions to Tanate.

Yes. The shift to 55% is happening gradually over time. And that's shifting with the forward curve coming down, right? So the replication stretches over time. So it's been gradual, not happening in one fell swoop over six months, okay? In terms of the majority instrument that we use, it's a combination of using swaps to extend the duration, and of course, using our investment portfolio as a hedge. And then the average duration is around 2.4 years still, roughly, a bit higher.

Sorry, can you just elaborate how you kind of moved – shifted the – out of the liquidity into the duration part by 5 percentage points, but it doesn't impact the average duration? I mean it implies you've been buying at or around that kind of two-year maturity level. Is that the right way to think about it?

Yes, I suppose in a way. We do what we would call barbell hedging. So we have a significant part of our replication in the 3-month bucket, and then, over one year, it's anywhere from over one year to 10, 15 years, right? So it's a barbell strategy. But I think if you want to follow us – and by the way, we do the calculations for you on Page 23, anyway, but the average duration on the part which is more than one year is around four years, something like that. So if you look at the curve around four years, you should get a sense of how accretive that is. But we – as always, we reaffirm, and we will keep updating Page 23 every quarter.

Okay. So you weren't selling 364 days and buying 367-day instruments in order to...

No. No, we're not doing that.

Thank you. Our next question comes from Kiri of HSBC. Your line is open. Please go ahead.

Hi. Yes good morning everyone. A couple of questions, if I may. On fees and the 24% growth in the insurance part of the fees, could we just have a bit more color which geographies, which partnerships, which specific products are driving that growth? And then secondly, actually, still on fees, the Retail brokerage activity, the data looks pretty strong through April with all the market volatility. And I guess we've seen that movie before. But does it feel like there's some sustainability there? Or should we think of the kind of recent April as more of a blip in terms of retail brokerage and maybe some weakening as we go into the summer on that side of things? So two questions on fees, please.

All right. First of all, I think that on fees, what we want to do is to continuously increase the alpha, that also means that in the past couple of years we have put in substantial efforts to not only have daily banking, but also to grow our investment product business and our insurance business. And I'm sure we're going to add a few more in the next couple of years. And when it is the case, I will tell you something about that. But one of them was insurance because that is good annuity income for our existing customer base. And so we have, in all the retail markets, contracts with providers. There's different providers that we work with. There are different structures we work with depending on the market. And also we introduced insurance also for Business Banking in different markets, which in the past we did not have. So it started out small a few years ago. And once or twice I've made remarks about that we have relatively small insurance distribution fees. But now you see it's becoming quite sizable, and we expect this to continue. When we talk about retail brokerage, the first quarter, we had – and more higher assets under management and we had more trade and we had a higher number of people who are trading with us that is now currently 4.6% in Capital Markets Day – sorry, €4.6 million. I said in the Capital Markets Day last year, it was about €4.2 million. So okay, now we moved up to about 11%, 12%. It's good, but that still means that approximately 88% of our customer base is not trading through ING if they are trading. So there's a lot of upside there. And we continue to refine our products, improve and centralize our investment engine, improve our reporting. So move to additional segments also not only brokerage, but also simple advice and personal advice. So those are new brackets we are setting. So we are confident in being able to further grow that and that will support the fee guidance that we have given, but we remain very confident on that.

Great. Thank you.

Thank you. And our next question comes from Johan Ekblom of UBS. Your line is open. Please go ahead.

Thank you. Can I just follow up on two things that we haven't spoken about? One is, at the Capital Markets Day, we spoke about the use of significant risk transfer trades. Can you just give us an update on where you are, if there is anything – any impact in Q1 or where you are in terms of timelines there? And then, I guess, secondly, also just an update on the Business Banking rollout in Germany, where we are there, would be helpful? Thank you.

On Business Banking, I will say something, and then, I give the SRT question to Tanate. Now on Business Banking, roll out is going well. We focus on the digital part of Business Banking. So that means self-employed SME. We also – with that, we have a savings proposition, but also a payment proposition that we then – that will go with it. And that is – and therefore, we greatly grow step by step, but still in the bigger scheme of things, it remains small, but we're confident that we're going to be able to also realize the position in that market because there's a lot of untapped potential, especially on the digital side, where there's no other player really in Germany that rolls it out in a way that we are currently rolling it out.

We're still planning on doing an SRT trade this year. We're in the process of preparing for that. And we expect that – trades to happen in the second half of the year. In terms of size, I think we expect, subject to regulatory approval and market condition, somewhere around a 10 basis point relief on core Tier 1 in the second half of the year.

Thank you. We will now take our next question from Anke Reingen of RBC. Your line is open. Please go ahead.

Hi. Yes, thank you very much. Just two follow-up questions. The first is on your – the increase in your – temporary increase in your target capital ratio of 12.8% to 13%, the sort of like cautious stance that's underpinning this increase. What other business decisions has it sort of like impacted? Are you looking more cautious on your lending investment spend? Or how – where else does it sort of like impact your operations or your thinking? And then just in terms of April and the tariffs, given you are obviously very strong in the corporate banking world, just curious about what you're seeing from customers. So maybe a bit more cautious at the beginning of April, but are you seeing more demand for loans or cash balances in the last few days? Thank you very much.

All right. I'll take the question on customers, and I will give the question on where we are – where are we cautious and how do we look at, let's say, the circumstances on Ljiljana? So if you look at our customers, look, I mean, there's two tails, if you will, maybe even a few more. But on the one hand, we have Retail, and there – which is 65% of our lending book, and there you see that a significant part of that retail lending book is mortgages. And if you then look at mortgages, we are active in markets which have low unemployment rates, Netherlands, Belgium, Germany, Poland, Spain. And you see – actually in all of those markets, you see good growth on the back of low unemployment, on the back of the market restoring after, let's say, the start of the Ukraine War and the high interest rates that it brought with it, which are then coming down on the back of house shortages. And then you see also depicted on one of the slides where we show a number of these developments that are supporting that. That's one element on the retail side. Secondly, on the retail side, you see customer confidence relatively low, but we don't actually see that back in our payment volumes. We are one of the biggest payment providers in Europe, and these – the number of payments that are being done or the volume of those payments remains strong, so we can't see it in indicators there. So there is not so much to see on the retail side of things. What we do see in Wholesale Banking is that you saw the lending demand and the lending growth in Wholesale Banking was relatively subdued with a small decrease. Yes, there, companies are a bit uncertain depending on the sector and the import tariffs that are being levied. You can – you maybe see that in – there was a lot of quick demand in the first quarter in the expectation that these tariffs would come, that demand then goes a bit down at the end of the first quarter and into the second quarter. And then you see that in terms of production companies or transportation companies, there is a bit more conservatism in terms of investments. That's what we currently see. We don't see a big inflow currently in our restructuring departments that not you see a bit caution in further growth and investments being made on the wholesale side. Ljiljana?

Thank you for the question, Anke. And I think Steven already gave some flavor to how we think. Maybe to add, we know the tariffs are not good for everyone, and there are clearly no winners in that game. And they have several of the consequences. And one we've seen in April, which was the spikes in market volatility. And during that spikes, I think ING has weathered really strongly through it and with no extra demand for cash or non-honored margin calls or collateral calls. So everything was business as usual. And through our strict monitoring, we're going to ensure that in case of eventual future spikes, we do the same. The other consequence that the tariffs have brought are definitely economic uncertainty. And here, our clients need a bit more time and we need a bit more time as to understand how is it exactly going to impact the economy and their business models. And while we have dissected our Wholesale Banking portfolio depending on geographies, industry sectors, we have concluded that the direct impact of the tariffs would be limited based on the fact that we are well diversified into the economies that are less affected by the tariffs, but as well that we are well diversified in industry sectors that are under less pressure. And that is all confirmed also by strong financial flexibility of our clients. As you know, approximately 84% of our Wholesale Banking client base is investment grade, and 2/3 of our exposure are fully or partially collateralized. Also, the portion of the clients in our portfolio that have strong exports to the U.S. is limited. All of that gives us, I would say, current confidence that the direct impact from it will be very limited. However, we have to look into when and how the conflicts are going to be resolved in order to understand longer-term impacts on our clients.

Okay. Thank you very much.

Thank you. And our next question comes from Namita Samtani of Barclays. Your line is open. Please go ahead.

Good morning and thanks for taking my questions. My first question, is there a correlation between the mobile customers only growing 174,000 this quarter and the amount of deposit cuts you've done? I'm just curious, given the 1 million target of mobile customers you have this year and whether you would sacrifice on the mobile customers target in order to cut deposit rates and defend net interest income. And secondly, I just wanted to make sure the 25 bps deposit cut in Germany, which takes place on the 7th of May, is that included in the €1 billion deposit cost guidance or not? Thanks very much.

All right. I'll take the question on customers, and Tanate, the 25% – basis points cut in Germany. Is there a correlation? No, not, there is no correlation. If you look at the first quarter, typically it's slow. So if you look at the first quarters in many of the previous years, that's also the case. And people come out of, let's say, the festive season, and then, generally, there are less products being sold in terms of new customers. So the last year it was about 180,000. Now it's about 174,000. So that statistical difference is small. So we're still well on our way to reach the 1 million for this year.

And just to confirm, the second rate cut in Germany of 25 basis points is included in the €1 billion.

Thanks very much.

Thank you. We will now take our next question, a follow-up from Farquhar Murray of Autonomous. Please go ahead.

Good morning, all. Just two quick follow-ups. Just on the Dutch mortgage market, 1Q was notably strong. I just wondered whether you saw any moderation there in the second quarter so far. And also, can you just give an outline on how mortgage pricing on new business compares to the back book? And then secondly, one slightly technical question on the new commercial NII disclosure, which is a really positive improvement, and thanks for that. It includes a reallocation shift of €160 million, I think, on full-year 2024. I just wondered if you could give a 1Q 2025 impact and perhaps how that compare Q-on-Q? Thanks.

All right. I give the reallocation question to Tanate. On the Dutch mortgage market, I see you have two sub-questions. The one is, do you see good momentum continuing also in the second quarter? The answer is yes. We do see continued good momentum also after the first quarter. And the margin versus the back book, I think that the margins are a little bit higher on the client side. The only pressure that you get is, let's say, not from the back book, but the fact that people are extending their mortgages, so, therefore, you partially refinance the back book, and that gives a bit of pressure, but the margins for the new production is not higher.

Farquhar, just in terms of commercial NII, I'm glad you liked the new way we present our commercial NII. And you're right that the reclass is around €160 million because of our cash pooling reclassification. And I think €160 million is a good basis for which, if you're doing your spreadsheet for 2025, that's a good number to use.

Okay, great. Thanks.

Thank you. And our next question comes from Matthew Clark of Mediobanca. Your line is open. Please go ahead.

Hi. Just very simplistically, given commercial NII was up first quarter versus the fourth quarter, given you're guiding liability margins flattish for the next quarter, can we draw the conclusion that commercial NII has now troughed and should be drifting up from here? Thanks. That was it.

Tanate?

I think, again, I would only describe the moving parts, right? It depends on what the forward curve will do, it depends on our volume growth, lending margin – sorry, lending volume, liability volume, and depends on any further rate action that we do, right? So those are still the moving parts. But I think looking at where we see now, we do see stability, we see a stabilization of our commercial NII and our NII on liability. And then we should grow from there.

Thank you.

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

Yes. Thanks very much, Laura. And again, we had a strong quarter – first quarter with good commercial momentum. We are confident about our outlook for 2025 and 2027 with our targets, and we continue to go at it. And with that, I thank you very much for your time, for your questions. I wish you a very good Friday. I'm looking forward to speaking to you again soon. Thank you.