Good morning, this is Laura welcoming you to ING's 4Q2025 conference call. Before handing this conference call over to Stephen Wendrysbeck, 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 20F 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, Stephen. 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 I thank you for joining us today. As usual, I'm joined by our CEO, Liliana Chortan, and our CEO for Tenet Putrakul, and today I'm proud to walk you through another year of outstanding commercial growth and financial performance driven by the quarter of 2026, and I will also share our updated and upgraded outlook for 2027, which further underlines the strength and resilience of our business. After that, Tenet 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 two 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 started which had our capital markets day long growth but 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 10.1 billion in net core lending growth driven mainly by residential mortgages also banking at a 10.3 billion supported by strong demand and lending and working capital solutions as our clients find sensing needs increased we also saw healthy the positive elements corridor for the deposits rose by 38.1 billion for the full year or 5.5 percent in the fourth quarter retail banking contributed 11.3 billion benefiting from targeted campaigns and normal seasonal inflows and also banking record a small net outflow mainly due to lower short-term balances in our cash pool activities fee income also committed a 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 66 million all this translated into very solid financial results our return on equity for 2025 of 13.2 percent 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 166 billion for the year representing a 28% increase for 2024 now let's move to the next slides to look at how the commercial momentum drove our financial performance outside three you can see that commercial and I remain very strong at 15.3 billion this result was supported by the significant increase in customer balances both on the lending side and in liabilities 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 a structural driver such as customer growth and increased cross-sell investment products performed particularly well with strong increases across all metrics the number of customers as a center management and the number of trades and taking together the strong NRI 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 four on this slide we highlight actually stated to strengthen operational leverage reinforcing a different discipline approach to cost management we continue to invest in growth and diversification while increasingly leveraging new technologies were able to assess these investments by enhanced operational efficiency as a 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 jets 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 number one position in five of out of ten 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 investment scalability are also translating into a higher efficiency and this is visible in our FTE over customer balances ratio which has improved by more than seven percents since 2023 then we move to slide five where we show how our bus 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 6.3 billion in our profits contributing almost two percentage points to our ct-1 ratio and of this 6.3 billion 50% is distributed as a regular case dividends offering shareholders an attractive and predictable cash yields 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 true SRT transactions completed in November finally we announced additional distributions to a total amount of 3.6 billion which also helped bring our ct1 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 six 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 yields including in 2025 a year in which our share price increased by almost 60% the share our back program we announced in November is currently underway and is expected to be completed in april 2026 and in addition we paid out 500 million euro in cash earlier in january which helps us to meet the cash hurdle for this year now finalized at 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 eight 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 eight 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 rule out this concept in other markets as well which will help grow income from daily banking services our effort 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 a business banking we successfully launched our propositions in Italy and Germany where we are seeing strong and ongoing customer growth and also banking we are expanding our range of fee generating capital light products to support sustainable and of our diversified revenue growth now secondly we will further improve our operational leverage by scaling processes people and technology while maintaining strict cross-discipline the further utilization and scaling of GNI will enhance efficiency and will help us to reach our FTE over customer balances start 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 and attract a shareholder return supported by a 50% payout policy. Secondly, we will continue to invest in value-accredited growth, diverse for income streams, respond the loan book in a capital-efficient way, and consider M&A opportunities that meet our strict criteria. And thirdly, we will return any capital strictly above our CET1 targets to shareholders. We will also further increase the capital allocated to retail banking and optimize the capital usage in the wholesale bank. and know 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 there I'll present our outlook for 26 and 27. And for 2026, we expect total income of around 24 billion euro. And this outlook is supported by continued volume growth and anticipated 5 to 10% increase in fee income. Total operating expenses excluding internals, sorry incidentals, are projected to be in the range of 12.6 to 12.8 billion. We will continue to manage our CD1 capital ratio at around targets 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 two metrics was around 40 basis points for zero basis points in 2025 then looking ahead of 2027 we are introducing a new outlook for total income we now expect it to exceed 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 five 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 13 billion one three 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 Tenet 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 Stephen.

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 a strong performance we achieved in 2025. All other income is expected to be around $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 rates environment, taking 2024 last quarter as a run rate would be a fair starting point. Taken together, total income is expected to reach around $24 billion in 2016, and then on the next page I'll walk you through the drivers behind the expected cost development. We expect total annual costs to be in the range of $11.6 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 Stephen 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 continue optimization of our footprint. Given the strong income outlook this modest cost growth results in a positive draw for the year. Now let's move to the quarterly financial 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 while the liability margin remains 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 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 that core lending increased by 20 billion euros retail banking contributed 10.1 billion driven by continue mortgage growth increases across both business lending and consumer lending portfolios wholesale banking also posted strong growth of 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 $100 million quarter on quarter and was almost 5% higher than last year. Lending NII was up $75 million in the fourth quarter, driven by volume growth and a one basis points improvement in lending margin to 126 basis points. The liability NII also increased by €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 remains strong, increasing 22% year-on-year. Excluding the 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 high insurance fees, and increase in daily banking fees. Investment products also perform really well across several metrics. For example, 9% growth in customers, 16% growth in asset under management, or 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 market and corporate finance. Slide 17 showed 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 condition mostly with foreign exchange and interest rate management Treasury was impacted by lower results from foreign currency hedging next slide 18 expenses excluding regular 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 plan FTE reductions in corporate staff and retail banking. Once these are fully implemented, these measures are expected to generate approximately $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 $365 million in the quarter, equivalent to 20 basis points of average customer lending. This is in line with our through-the-cycle average. In addition to stage 3 provision amounts to $389 million, mainly driven by individual stage 3 provisioning for a number of new and existing files 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 State 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 forecasts. Overall, we remain confident in the strength and quality of our loan book. On slide 20, we showed 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 $4.5 billion this quarter. credit risk-weight asset rose by $1.5 billion, excluding FX impact, driven by volume growth. This was offset by the risk-weighted asset relief from two SRT transactions executed in November. Operational risk-weight asset increased by $2.2 billion, while market risk-weight asset increased by half a billion euros. We'll pay a final cash dividend of 73.6 cents per share on the 24th of April, 2026, subject to our annual general meetings approval. Now I hand back to Stephen to wrap up today's presentation.

Yeah, thank you, Taneet. And for the ones who have been here longer with us, this is Taneet's last analyst presentation. presentation and we have been knowing each other tonight's for for more than 25 years and we've been in the board together already for for seven years or more so thank you very much for working with us all these years tonight 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 to thank tonight also for the friendship also for the leadership and a 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 and year, successfully executing our strategy, accelerating growth, increasing impact and delivering value. We achieved a record total income for the third consecutive year. we maintain cost disciplines and operational efficiency gains and they more than upset 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 will remain confident are in our ability to stay on track to become the best European bank and with this conference 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 that's you

thank you ladies and gentlemen if you would like to ask questions please press star one on your telephone keypad and in the interest of time we kindly ask each analysts to limit yourself to two questions suddenly thank you we will now take our first question from venra patroc of capital shuri your line is open please go ahead yes good morning um all the best tonight um i guess you will not miss the dutch winter uh but after in uh in thailand so it's an interesting time to to to to live actually um it's a the first quarter i actually

see the volume growth benefitting fully the commercial NI as the negative effect of lower interest rates is getting smaller. I was wondering on the guidance of 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 25 billion total income, wondering where you stand on 27 or on liability margin. And then maybe on wholesale banking, where are you on the risk-related assets growth plan for the wholesale um i think you were planning some optimization there um but i do see wholesale growing quite sharply again uh in the fourth quarter so um where do you see growth in wholesale going forward thank you all right i'll take uh thank you and uh yeah tonight for sure uh won't miss the dutch winter neither would i by the way if i would go to thailand but in any case i'm i'm here um if we look i will talk to about the the question about rwa and wholesale banking

And also, and then tonight we'll talk about the NII and the growth for 26 and 27. So if you look at wholesale banking, 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 two SRTs in November that had an impact of around 12 basis points on our CET1. for 26 we want and 27 by the way we want to continue to doing these SRTs so we have just started with our more improvements that we have been making for 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 CT1 of 15 to 20 basis points so a bit higher than we realized over 2025.

Tinet? Yes thanks I think in terms of the major assumptions we use in terms of giving our outlook, we have assumed 5% balanced 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 used the December curve to do that projection, which is quite constructive in our view. And then the third, margins. I think the three 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.

Yes, thank you.

Thank you. And we'll now take our next lesson from Benjamin Goy of DirectorBeng. Jelani Sezlin, please go ahead.

Good morning. First question is on loans versus deposit growth. So another strong quarter of loan growth in particular, and I think it's a 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 cost, for the underlying cost guidance, but there has been historically a bit of incidentals every year. Should that now be smaller than 25 going forward, or what's best to assume for the incidental to come on top of the cost guidance?

Yeah, I think that on the loan versus deposit growth, I mean, if you look at 2025, the loan growth was about 8%, The deposit growth was about 6%, so 57 billion against about 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 the same growth over longer periods with loans and with deposits. But one year can be a bit higher in loans and one year can be a bit higher in deposits. But I think on both sides of the balance sheet, we see continued 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, yeah, look, we continue to work on our cross-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 basic banking, for example, in Germany and Italy. We have been investing in diversifying our capital light income in wholesale banking, introduction services, and in financial markets. At the same time, we have seen since 2023 our FTE overbalances decrease 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 percent earlier than we anticipated what we then said in 2027 so we'll work to work towards this year um so it we we we work on both levers but we always do this in a buy side thing so so what you see for example with restructuring costs in 2025 those restructuring costs should deliver us a benefit of 100 million 2026 and each time that we have a process or area where we can realize better servers better post optimization better visualization better use of gen ai then we will announce it because i just want to make sure that front to back when one 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 five years and we will continue to do so thank you and all the best to tonight thank you and we'll now move on to our next question from julia year or two of Morgan Stanley.

Jolani Susan, please go ahead.

Yes, hi, good morning. Thank you for your patience, you know, with answering our questions and all the best for the life after ING. But now I have two questions, please. So the cost outlook beyond 26, 26 looks quite a bit better. I think it's encouraging to see operating jobs 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're seeing could suggest something better than that. And then separately, Stephen, I wanted to pick your brain on M&A. We have seen some headlines in Romania but also Spain and Italy have been in focus in your comments although we don't see much actions. So any comments on you know what you're thinking strategically on the M&A front? Thank you.

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, I 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 and 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 Lansford last year in the fourth quarter we announced buying the majority and thereby in the end 100% of an asset manager in Poland integrating it as a manager into ING how we bought it from Goldman Sachs if it is 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 other numbers of customers that we serve we have been drawing again also lending deposits and fees and we have a very strong return 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 markets and then the caveat it needs to fit it needs to add to that local scale and diversification and we wanted to also to be a creative for shareholders and that's the concert in which we're working and which we're willing to consider M&A tonight the jaws yes I think given the

outlook we have now turned the corner in terms of positive job for 26 and we're confident that we continue that positive joy in 2027 if you look at the three 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 Stephen 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 20-27 as well.

So I take away that probably growth will be more modest than what the street expects in 20-27.

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

Thank you. Can I didn't even blink when you asked that question?

Thank you. And we'll now move on to our next question from Tariq El-Majab of Bank of America. Please go ahead.

Hi, good morning, and from my side as well tonight, thanks all for the very interesting interactions we had all these many years, and good luck for what's to come. Just from my side, two 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 markets expect, assuming, you know, asset margins are quite stable or growing a bit the volumes we can 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 um to think that the the gap between uh i mean the the downside potential risk is for the market expect consensus is too optimistic perhaps assumptions of of rate cuts or no rate raise in the core saving deposits in 27 because if you use the forward curves 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 cost is more really to understand how you think about the investments because I mean you have some head room now created on the revenue side by higher growth and you know 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 two years in terms of investments in ai and tech i mean yes you had 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 and how much of more investments needed to deliver your ambition on that front thank you let me take the question to recon on AI and then tonight we'll talk about the margins look I mean we do clearly see benefits of of AI coming through I mean we have been working with AI already for a decade and then with Gen AI will work with that in the last couple of years but there you see both on let's say the clients on the client side and on the operational leverage side benefits coming through and let me give you a few examples as you look at PI onboarding the STP increased last year from 66 to 79 percent so that means that close to 90 percent of our private individual clients were onboarding through STP we do end-to-end mortgage delivery and we increase that approvals with 11% last year so the time T has therefore improved we do about 60 billion in a customer lending without manual intervention so you see a number of customer benefits coming through when we talk specifically about Gen AI and also in chatbot we have better scores for CSET scores which are sort of satisfaction scores for our customers so we do see benefits coming through for gen AI both on the revenue side doing more with our customers and having more satisfied customers and on the operational leverage we do that in five areas at current so we took the five big wins that we see starting with contact centers in IT coding in lending in personalized marketing any KYC so so that those are the big areas we do these benefits we see them coming through every quarter you see announcement you seen announcements whereby we say okay what impact does it have on our style what impact does it have in operations and you see it also coming through in FTE overbalances, 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 direct 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 how do you balance that additional revenue in terms of margins and in terms of mix, right? And what we see is that we're looking at 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 balance dynamics of growth, competition, and to be remaining competitive by at the same time being a free dip to our shareholders thank you i mean i don't want to put uh but basically uh to to to deliver on the consensus or market numbers means that marketers should be much more bullish on the volume growth and lending and probably be less positive on the margin margin side but but um i just want to reconcile a bit what your guidance outlook which is very helpful versus where market is positioned okay thank you and we'll now take

our next question from galton lee of jp malvin please go ahead yes good morning um also i want to take the opportunity to um some of my best wishes to donate um and thank you for everything um so my two questions first of all um sorry just want to follow up on sorry to I have questions around the NII, but so if we look at your guidance for 2026, which implies about 600 million increases for liability margins, but, you know, if you look at the repricing actions that you've done in 25, I mean, the impact on 26 is already 700 million, And then, on top of that, you have some small benefits from, well, you know, replicating income as well in 26 small, but, like, still. So, I'm just kind of wondering, like, what is your current assumption in terms of the deposit cost and deposit pass-through from 42% into four? And if you could just, you know, sort of elaborate a little bit on, you know, what are you seeing on competition on deposits at the moment? What do you expect for, you know, 26 and runwards? My second question is on cost. So, you know, he's done a good job at trying to kind of contain a little bit of inflation with, you know, the savings. I'm just trying to understand a little bit if, you know, 2%, 3% is really kind of like the run rate that we should expect even beyond 27. Is that something that you're, you know, trying to achieve in the long run? Yeah, just trying to understand a little bit the moving parts of that cost number.

If, you know, you've provided this for 26, but, you know, even beyond that, like what what are the savings you you've mentioned a couple you know benefits from fte reductions but just kind of trying to quantify a little bit you know what else um can really expect in in the long run thank you all right thank you very much i think that on the on the costs you see the effects of our uh digitalization and scalability now really seeing take shape and we that now also in the fourth quarter but also i'm pointing again as the FTE overbalancers 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 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 a guidance to give you in terms of where we want to end up. Indeed, therefore, you will see in 2016-2017 improved cost income to what we have been shown and positive jaws territory that we have now been gotten into and I want to stay in that territory. 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. stand tonight on the deposit cost and margins.

I think we give 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 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 700 million is factored into that guidance.

Great. Thank you very much. And we'll now take our next question from Lamita Centerni of Barclays. Please go ahead.

Good morning, and thanks for taking my questions, and thank you to today. 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, a group level, but are you telling us that we're at peak earnings for Germany in retail, given high expense spend and beta spend to other deposits? And my second question, based on your updated 27 targets today, the cost income implied, 27 is maybe 51, 52 percent, it's hardly a standout amongst European banks. even APM is now going for 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?

Yeah, thank you very much. On the cost-income side, our main opportunity is to grow our revenues, our revenues over our client balances, our diversification, and also making 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 income but what we need to do that's why our strategy called drawing the difference is draw our revenues because that's where we can make the biggest difference in further improving our returns and then indirectly also our cost 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 tonight yes the German cost-income ratio is a robust one despite the increase in in investments that we make in Germany one thing that you have to remember is that the client growth that we have a 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 product 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 job 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.

Thank you. And we'll now take our next question from Cyril Tutondi of BNP Paribas. Please go ahead.

Thank you for taking my questions and good morning, everyone. So I've got two, 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. So I'm just curious in which market that 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?

Yeah, thank you, Cyril. So I'll take the question on deposit campaigns, and then Nate talks about the lending margin. So yeah, about the deposit campaigns, look, we we have these campaigns regularly we had them also in a fourth quarter with Black Friday in some markets or in Germany as they call it Black Friday so we will continue these campaigns and then we typically see that there's a good response in in getting either a new money from existing clients or getting new clients in and then typically we see that we get money to to stick to around two-thirds of the money that after the campaign is over will stick with ING and therefore we can gain new primary customers and increase our deposit levels. So first 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 here tonight's 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 one basis points 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 fresh pressure in terms of new production margin in the Netherlands thank you and all the best techniques thanks thank you we'll now take our next question from Johan Esblom of UBS please go ahead thank you very much and And thank you for everything tonight, and best of luck.

Just most questions have been answered, but, you know, at the Capital Markets Day, we talk 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.

Yeah, 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, 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 zero, so that's one. 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 basic banking franchises in the Netherlands and Belgium for example of course it is very minimal because we have 114 billion business banking lending book yeah and in Germany we're just starting so that will take time but it is almost like we saw with the insurance fees and there you see in a fee income line as an example it was not even a separate fee line and there you 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 Shrej Shabastava of City. Please go ahead.

Hi, and thank you for taking my questions, and thank you to Nate for answering all the questions over the previous quarters. I just want to look more top-down, because obviously, following on the 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 campaign so what are some of the things you think about when deciding to give up that short-term upside and for sort of longer-term growth thank you all right so that can you give for the elements of our replication income or these liability margin again yes I think you know 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 three moving parts, right? It's really the impact of the short-term replication still having a tail impact, is to continue accretion of long-term replication coming through, and the actions that we would take in terms of rates increases or decreases over time. And I think we'd 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.

Thank you. And we'll take our next question from Seamus Murphy of Carragill. The line is open. Please go ahead.

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 16 – sorry, 16.3 to 16.5 for commercial AI in 2026, but in Q4 it was 3.928, so that suggests an exit rate of just over 4 billion. into Q1 2026. That's already in the bag. And if I annualize that, I'm kind of getting 16.2 billion at the start of the year, just before anything else happens. And the opening year 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 maths? As you start the year, did you have kind of 16.2 billion of NII heading into – sorry, 16.2 billion into this year at to 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 over 5 billion, I think to 175 billion now. And secondly is that obviously the curve has steepened. So it would be super useful if you could tell us how much the long end of the replication portfolio would contribute in 26 and 27 um and the last question i i asked this also on the q3 call um 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 thank you thanks simus for your questions um 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 continually see an improvements or expected improvements based on our digitalization and AI and 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 balances perspective we should see further improvements. Tanit, how does it work with that?

Yes, 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 a billion euros right that's a 7% growth in net interest income which I think it's a strong number and strong guidance and I is 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.

Thank you.

Thank you. If you find that your question has been answered, you may remove yourself from the queue by pressing star two and kindly be reminded this is limited to a maximum of two questions only thank you and we'll now move on to our next question from anke rayon of rbc please go ahead yeah thank you very much for taking my questions um but firstly um thank you very much to nate um and all the best um and then to the question so firstly can you just talk a bit about your expectation on lending 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 in terms of the mix. And then you commented earlier on about the SRTs of 15 basis points benefit. But can I just clarify, is that per year or is that over the two years, 26 and 27? Thank you very much.

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 away 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 fourth quarter that both in and mortgages and in business banking and also banking we continue to see good growth the pipelines are good uh clearly um 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 in belgium that is in germany That is the case in Spain. We have a total mortgage book of $370 billion. So we are top three mortgage provider in the region, in Europe. And in many of the markets which 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, or an increase in a number of households and those fundamentals continue to be there and that's why that is going to be a significant driver of the long growth in 2026 and 27.

Thank you. Thank you and we'll now take our next question from Matthew Clark of Media Banker. Please go ahead.

So firstly coming back to this 25 billion target for 2027 revenues or greater than 25 billion. I mean, are you trying to talk down consensus there, which is 25.8, I think, or do you think that's still consistent with the greater than component of that target? So 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 etc and I guess asking that in the context of an uptick in credit losses on wholesale this quarter thank you yeah thank you very much well let me put it this way for 2027 so we said that the revenues are larger than 25 billion so we're confident about our growth and we're also called about 27 so don't forget the larger dent sign in 10 25 billion for 27 but yeah that's that's where we currently are and we're very comfortable with that level when you talk about so also being lending well look we have 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 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 and retail and then 45 and also 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 and also banking we can do more with less capital to help the return going up so it's not a particular focus on lending alone in the end we're focused on return thank you and we'll now take our next question from Flacco Murray of autonomous please go ahead and obviously

congratulations and best wishes for the future coming back to the day job though for now I have two questions if I may firstly please can you reconcile the indication of 0.4 billion of hedging tailwinds into 26 off form on a year-on-year basis on slide 29 is that simply a matter of how things came through in in the quarters and perhaps can you just flash that out through 25 and into 26 and also these are 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 out paid deposits if we look at the eight percent versus the five percent

i know you said the kind of planning assumption as a kind of balanced five percent but what's your general sense about where customer demand is our present thanks i think that so on the on the customer demand the presence i mean we actually we we do see continued good mortgage growth again because we see the the macroeconomic elements that we saw in there we 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 or in a number of these housing markets to continue in 2026 and 27 so again that we have were very positive towards that stands I think in business banking we have also been improving our processes and therefore we've made it easier for customers to bore 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 in Germany Italy and potentials and other markets that we're looking at how we've spoken about Spain before and then also banking it's always more lumpy funnily enough where 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. Yeah, probably that the 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 Tenet.

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 3.7 to 3.8, and from 3.8 to 3.9 billion during the course. So you already see signs of that replication impact. I think what the 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 three factors that drives a 400 million euros tailwind.

And we'll now take our next question from Chris Hellen of Goldman Sachs International. Please go ahead.

Yeah, morning, everybody. I just have one question left, and obviously good luck tonight. 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 two 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 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 imagine yeah I think prison yeah tonight will miss those questions but luckily we have either learner 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 yeah I mean on the wholesale side you saw that 10.3 billion lending and working capital solutions grow so part was indeed working capital solutions that had to do with a couple of large deals and very large companies doing very large deals and we were leading those deals so that that doesn't necessarily have a link with each other that those are let's say seasonal swings that sometimes you have 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 boring base behind it they have lower margins but we have many of these and so that doesn't have a particular big impact on a lending margin when we we talk about the cash pooling business that's that's the the pooling both in our payment and cash management and the notion of pooling business typically clients at the end of the year they will consolidate their positions and let them off and because they let them all they let them all in our accounts and therefore you see a lower amount coming in there so seasonal pattern thank you there are no further questions in case I will now hand it back to Steven and Ryzrek for closing remarks yeah thank you very much I think we can And we are very proud of our 2025 members 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, Nate, 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.