Ing Groep NV (ING) 20-F for FY2020, filed Mar 12, 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐

REGISTRATION

STATEMENT

PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES

EXCHANGE ACT OF 1934

☒

ANNUAL REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the fiscal year ended 31 December 2020

☐

TRANSITION REPORT PURSUANT TO SECTION

13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

☐

SHELL COMPANY REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File Number: 001-14642

ING GROEP N.V.

(Exact name of Registrant

as specified in its charter)

ING GROUP

(Translation

of Registrant’s

name into English)

The Netherlands

(Jurisdiction of incorporation or organization)

ING Groep N.V.

Bijlmerdreef 106

1102 CT Amsterdam

P.O.

Box 1800, 1000 BV Amsterdam

The Netherlands

(Address of principal executive offices)

Erwin Olijslager

Telephone:

+31 20 564 7705

E-mail: Erwin.Olijslager@ing.com

Bijlmerdreef 106

1102 CT Amsterdam

The Netherlands

(Name, Telephone,

E-mail and/or Facsimile number and Address

of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Trading symbols

Name of each exchange on which

registered

American Depositary Shares

ING

New York Stock Exchange

Ordinary shares

New York Stock Exchange

(i)

3.150% Fixed Rate Senior Notes due 2022

ING22

New York Stock Exchange

3.950% Fixed Rate Senior Notes due 2027

ING27

New York Stock Exchange

Floating Rate Senior Notes due 2022

ING22A

New York Stock Exchange

Floating Rate Senior Notes due 2023

ING23A

New York Stock Exchange

4.100% Fixed Rate Senior Notes due 2023

ING23

New York Stock Exchange

4.550% Fixed Rate Senior Notes due 2028

ING28

New York Stock Exchange

3.550% Fixed Rate Senior Notes due 2024

ING24

New York Stock Exchange

4.050% Fixed Rate Senior Notes due 2029

ING29

New York Stock Exchange

(i)

Not for trading, but only in connection with

the registration of American Depositary Shares representing such

ordinary shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant

to Section

12(g) of the Act.

None

Securities for

which there is a reporting obligation pursuant to Section

15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the

close of the period covered by the annual report.

Ordinary

Shares, nominal value EUR 0.01 per Ordinary Share

3.900.668.

Indicate by check mark if the registrant is a well-known seasoned issuer,

as defined in Rule 405 of the Securities

Act.

☐

Yes

☒

If this report is an annual or transition report, indicate by check mark if the registrant

is not required to file

reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 193

☐

Yes

☒

Note — Checking the box above will not relieve any registrant

required to file reports pursuant to Section 13 or

15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections

Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d)

of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the

registrant was required to

file such reports), and (2) has been subject to such filing requirements for the past 90

days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted

electronically every Interactive Data

File required to

be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12

months

(or for such shorter period that

the registrant was required to submit and post

such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated

filer, an accelerated

filer, a non-accelerated

filer, or an emerging growth

company. See definition of “large

accelerated filer,”

and

“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Emerging growth company

☐

If an emerging growth company that prepares its financial statements

in accordance with U.S. GAAP,

indicate by

check mark if the registrant has elected not to use the extended transition

period for complying with any new or

revised financial accounting standards† provided pursuant

to Section 13(a) of the Exchange Act.

☐

†

The term “new or revised financial accounting standard” refers

to any update issued by the Financial

Accounting Standards Board to its Accounting Standards Codification

after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation

to its management’s

assessment of the effectiveness of its internal control

over financial reporting under Section 404(b) of the

Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting

firm that prepared or issued its audit

report.

☒

Indicate by check mark which basis of accounting the registrant has used to prepare

the financial statements

included in this filing:

U.S. GAAP

☐

International Financial Reporting Standards as issued

by the International Accounting Standards Board

☒

Other

☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial

statement item the registrant

has elected to follow.

☐

Item 17

☐

Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined

in Rule

12b

2 of the Exchange Act).

☐

Yes

☒

ING GROUP

Annual Report 2020 on Form 20-F

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

Contents

Part I

PRESENTATION

OF INFORMATION

CAUTIONARY STATEMENT

WITH RESPECT TO FORWARD

-LOOKING

STATEMENTS

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

OFFER STATISTICS

AND EXPECTED TIMETABLE

KEY INFORMATION

INFORMATION ON THE COMPANY

UNRESOLVED STAFF

COMMENTS

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

MAJOR SHAREHOLDERS AND RELATED PARTY

TRANSACTIONS

119

FINANCIAL INFORMATION

121

THE OFFER AND LISTING

122

ADDITIONAL INFORMAT ION

123

QUANTITATIVE

AND QUALITATIVE

DISCLOSURE ABOUT MARKET RISK

129

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

130

Part II

DEFAULTS,

DIVIDEND ARREARAGES AND DELINQUENCIES

132

MATERIAL MODIFICATIONS

TO THE RIGHTS OF SECURITY HOLDERS AND USE

OF PROCEEDS

132

CONTROLS AND PROCEDURES

132

16A

AUDIT COMMITTEE FINANCIAL EXPERT

134

16B

CODE OF ETHICS

134

16C

PRINCIPAL ACCOUNTANT

FEES AND SERVICES

136

16D

EXEMPTIONS FROM THE LISTING STANDARDS

FOR AUDIT COMMITTEES

136

16E

PURCHASES OF REGISTERED EQUITY SERVICES BY THE ISSUER AND AFFILIATED

PURCHASERS

136

16F

CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

137

16H

MINE SAFETY DISCLOSURE

138

Part III

FINANCIAL STATEMENTS

139

FINANCIAL STATEMENTS

139

EXHIBITS

140

Additional information

RISK MANAGEMENT

142

SELECTED STATISTICAL

INFORMATION ON BANKING OPERATIONS

242

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

PRESENTATION

OF INFORMATION

In this Annual Report, and unless otherwise stated or the context otherwise dictates,

references to "ING Groep

N.V.",

"ING Groep" and "ING Group" refer to ING Groep N.V.

and references to "ING", the "Company", the

"Group", "we" and "us" refer to ING Groep N.V.

and its consolidated subsidiaries. ING Groep N.V.'s

primary

banking subsidiary is ING Bank N.V.

(together with its consolidated subsidiaries, "ING Bank"). References to

"Executive Board"

and "Supervisory Board" refer to the Executive Board or Supervisory Board of ING Groep N.V.,

respectively.

ING presents its consolidated financial statements in euros, the

currency of the European Economic and

Monetary Union. Unless otherwise specified or the context otherwise requires, references

to “$”,

“US$” and

“Dollars” are to the United States dollars and references

to “EUR” are to euros.

ING prepares financial information in accordance with International

Financial Reporting Standards as issued by

the International Accounting Standards Board (“IFRS-IASB”) for

purposes of reporting with the U.S. Securities and

Exchange Commission (“SEC”), including financial information contained in this Annual Report on Form 20-F.

ING

Group’s accounting policies and its use of various options under IFRS

-IASB are described under ‘Principles of

valuation and determination of results’ in the consolidated financial statements.

In this document the term “IFRS-

IASB” is used to refer to IFRS-IASB as applied by ING Group.

The published 2020 Annual Accounts of ING Group, however,

are prepared in accordance with IFRS-EU. IFRS-EU

refers to International

Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”), including

the decisions ING Group made with regard to the options available under IFRS as adopted

by the EU (IFRS-EU).

IFRS-EU differs from IFRS-IASB,

in respect of certain paragraphs in IAS 39 ‘Financial Instruments: Recognition and

Measurement’ regarding hedge accounting for portfolio hedges of interest

rate risk. Under IFRS-EU, ING Group

applies fair value hedge accounting for portfolio hedges of interest

rate risk (fair value macro hedges) in

accordance with the EU “carve-out” version of IAS 39. Under the EU “IAS 39 carve-out”,

hedge accounting may be

applied, in respect of fair value macro hedges, to core deposits and hedge ineffectiveness

is only recognised

when the revised estimate of the amount of cash flows in scheduled time buckets

falls below the original

designated amount of that bucket, and is not recognised when the revised amount of cash

flows in scheduled

time buckets is more than the original designated amount. Under IFRS-IASB, hedge accounting

for fair value

macro hedges cannot be applied to core deposits and hedge ineffectiveness

arises whenever the revised

estimate of the amount of cash flows in scheduled time buckets is either more or less than the original

designated amount of that bucket. IFRS-IASB financial information

is prepared by reversing the hedge accounting

impacts that are applied under the EU “carve-out”’ version of IAS 39. Financial information under IFRS-IASB

accordingly does not take account of the possibility that, had ING Group applied IFRS-IASB as its primary

accounting framework, it might have applied alternative

hedge strategies where those alternative hedge

strategies could have qualified for IFRS-IASB

compliant hedge accounting. These decisions could have resulted in

different shareholders’ equity and net result amounts

compared to those indicated in this Annual Report on

Form 20-F.

Other than for the purpose of SEC reporting, ING Group intends to continue to prepare

its Annual Accounts

under IFRS-EU. A reconciliation between IFRS-EU and IFRS

-IASB for shareholders’ equity and net result is included

in Note 1 ‘accounting policies’ to the consolidated financial statements.

Certain amounts set forth herein, such as percentages, may

not sum due to rounding.

This Annual Report on Form 20-F contains inactive textual addresses to Internet

websites operated by us and

third parties. Reference to such websites

is made for information purposes only,

and information found at such

websites is not incorporated by reference

into this Annual Report on Form 20-F.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

CAUTIONARY STATEMENT

WITH RESPECT

TO FORWARD

-LOOKING STATEMENTS

Certain of the statements contained herein

are not historical facts, including, without limitation, certain

statements made of future expectations

and other forward-looking statements that

are based on management’s

current views and assumptions and involve known and unknown risks and uncertainties that

could cause actual

results, performance or events to differ materially

from those expressed or implied in such statements. Actual

results, performance or events may differ

materially from those in such statements due to a number of factors,

including, without limitation,

●

changes in general economic conditions, in particular economic conditions in ING’s

core

markets, including changes affecting currency exchange

rates,

●

the effects of the COVID-19 pandemic and related response

measures, including lockdowns and

travel restrictions, on economic conditions in countries in which ING operates,

on ING’s business

and operations and on ING’s employees, customers

and counterparties,

●

changes affecting interest

rate levels,

●

any default of a major market participant and related

market disruption,

●

changes in performance of financial markets, including in Europe and developing markets,

●

political instability and fiscal uncertainty in Europe and the United States,

●

discontinuation of or changes in ‘benchmark’ indices,

●

inflation and deflation in our principal markets,

●

changes in conditions in the credit and capital markets generally,

including changes in borrower

and counterparty creditworthiness,

●

failures of banks falling under the scope of state

compensation schemes,

●

non-compliance with or changes in laws and regulations, including those financial services and

tax laws, and the interpretation

and application thereof,

●

geopolitical risks, political instabilities and policies and actions of governmental and regulatory

authorities,

●

legal and regulatory risks in certain countries with less developed legal

and regulatory

frameworks,

●

prudential supervision and regulations, including in relation to stress tests and regulatory

restrictions on dividends and distributions, (also among members of the group),

●

regulatory consequences of the United Kingdom’s

withdrawal from the European Union,

including authorizations and equivalence decisions,

●

ING’s ability to meet minimum capital

and other prudential regulatory requirements,

●

changes in regulation of US commodities and derivatives businesses of ING and its customers,

●

application of bank recovery and resolution regimes, including write-down and conversion

powers in relation to our securities,

●

outcome of current and future litigation, enforcement

proceedings, investigations or other

regulatory actions, including claims by customers who feel mislead and other conduct issues,

●

changes in tax laws and regulations and risks of non-compliance or investigation

in connection

with tax laws, including FATCA,

●

operational risks, such as system disruptions or failures,

breaches of security, cyber-attacks,

human error,

changes in operational practices or inadequate controls including in respect

third parties with which we do business,

●

risks and challenges related to cybercrime including the effects

of cyber-attacks and changes in

legislation and regulation related to cybersecurity and data

privacy,

●

changes in general competitive factors, including ability to

increase or maintain market share,

●

the inability to protect our intellectual property and infringement claims by third parties,

●

inability of counterparties to meet financial obligations or ability to enforce rights against

such

counterparties,

●

changes in credit ratings,

●

business, operational, regulatory,

reputation and other risks and challenges in connection with

climate change,

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

●

inability to attract and retain key

personnel,

●

future liabilities under defined benefit retirement plans,

●

failure to manage business risks, including in connection with use of models, use of derivatives,

or maintaining appropriate policies and guidelines,

●

changes in capital and credit markets, including interbank funding, as well as customer deposits,

which provide the liquidity and capital required to fund our operations, and,

●

the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V.

(including the Risk Factors contained therein) and ING’s

more recent disclosures, including press

releases, which are available on www.ING.com

This annual report contains inactive textual addresses to internet

websites operated by us and third parties.

Reference to such websites is made for

information purposes only, and information

found at such websites is not

incorporated by reference

into this annual report. ING does not make any representation

or warranty with

respect to the accuracy or completeness of,

or take any responsibility for,

any information found at any

websites

operated by third parties. ING specifically disclaims any liability with respect to any information

found at

websites operated by third parties. ING cannot guarantee

that websites operated by third parties remain

available following the filing of this annual report or that any information

found at such websites will not change

following the filing of this annual report. Many of those factors are

beyond ING’s control.

Any forward looking statements

made by or on behalf of ING speak only as of the date they are made, and ING

assumes no obligation to publicly update or revise any forward

-looking statements, whether as a result of new

information or for any other reason.

This document does not constitute an offer to sell, or a solicitation of an offer

to purchase, any securities in the

United States or any other jurisdiction.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

PART

Item 1.

dentity of Directors,

Senior

Management And Advisors

Not Applicable.

Item 2.

Offer Statistics

and Expected

Timetable

Not Applicable.

Item 3.

Key Information

Selected financial data

Not applicable.

Capitalization and indebtedness

This item does not apply to annual reports on Form 20-F.

Reasons for the offer and use of proceeds

This item does not apply to annual reports on Form 20-F.

Risk Factors

Summary of Risk factors

The following is a summary of the principal risk factors that could have a material

adverse effect on the business

activities, financial condition, results and prospects of ING. Please carefully consider all of the information

discussed in this Item 3.D “Risk Factors” for a detailed description of these risks.

Risks related to financial conditions, market

environment and general economic trends

●

Our revenues and earnings are affected by the volatility

and strength of the economic, business,

liquidity, funding and capital markets

environments of the various geographic regions in which we

conduct business, as well as by changes in customer behaviour in these regions, and an adverse change

in any one region could have an impact on our business, results and financial condition.

●

ING’s business, results and financial condition have

been, and likely will continue to be, adversely

affected by the Covid-19 pandemic.

●

Interest rate volatility

and other interest rate changes may

adversely affect our business, results and

financial condition.

●

The default of a major market participant could disrupt the markets

and may have an adverse effect

our business, results and financial condition.

●

Continued risk of political instability and fiscal uncertainty in Europe and the United States,

as well as

ongoing volatility in the financial markets and the economy generally

have adversely affected,

and may

continue to adversely affect, our business, results and financial condition.

●

Discontinuation of or changes to ‘benchmark’ indices may negatively affect

our business, results and

financial condition.

●

Inflation and deflation may negatively affect

our business, results and financial condition.

●

Market conditions, including those observed over the past few years,

and the application of IFRS 9 may

increase the risk of loans being impaired and have a negative effect

on our results and financial

condition.

●

We may incur losses due to failures of banks falling

under the scope of state compensation schemes.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Risks related to the regulation and supervision of the Group

●

Non-compliance with laws and/or regulations concerning financial services or financial institutions,

including with respect to financial economic crimes, could result in fines and other liabilities, penalties or

consequences for us, which could materially affect our business and reduce our profitability.

●

Changes in laws and/or regulations governing financial services or financial institutions or the application

of such laws and/or regulations may increase our operating costs

and limit our activities.

●

We are subject to additional legal and regulatory risk in certain

countries where we operate with less

developed or predictable legal and regulatory frameworks.

●

We are subject to the regulatory supervision of the ECB and other regulators

with extensive supervisory

and investigatory powers.

●

The regulatory consequences of the United Kingdom’s withdrawal

from the European Union may have

adverse effects on our business, results and financial condition.

●

Failure to meet minimum capital and other prudential regulatory requirements

as applicable to us from

time to time may have a material adverse

effect on our business, results and financial condition and on

our ability to make payments on certain of our securities.

●

Our US commodities and derivatives business is subject to CFTC and SEC regulation under the Dodd-

Frank Act.

●

We are subject to several other bank recovery

and resolution regimes that include statutory write down

and conversion as well as other powers, which remains subject to significant

uncertainties as to scope

and impact on us.

Risks related to litigation, enforcement

proceedings and investigations and to

changes in tax

laws

●

We may be subject to litigation, enforcement

proceedings, investigations or other regulatory actions,

and adverse publicity.

●

We are subject to different

tax regulations in each of the jurisdictions where we conduct business, and

are exposed to changes in tax laws, and risks of non-compliance with or proceedings or investigations

with respect to, tax laws.

●

We may be subject to withholding tax if we fail to

comply with the Foreign Account Tax

Compliance Act

(“FATCA”)

and other US withholding tax regulations

●

ING is exposed to the risk of claims from customers who feel misled or treated

unfairly because of advice

or information received.

Risks related to the Group’s

business and operations

●

Operational risks, such as systems disruptions or failures,

breaches of security, cyber attacks,

human

error,

changes in operational practices, inadequate controls

including in respect of third parties with

which we do business, natural disasters or outbreaks of communicable diseases may

adversely impact

our reputation, business and results.

●

We are subject to increasing risks related

to cybercrime and compliance with cybersecurity regulation.

●

Because we operate in highly competitive markets,

including our home market, we may not be able to

increase or maintain our market share, which may have

an adverse effect on our results.

●

We may not always be able to protect

our intellectual property developed in our products and services

and may be subject to infringement claims, which could adversely impact our core business, inhibit

efforts to monetize our internal innovations

and restrict our ability to capitalize on future opportunities.

●

The inability of counterparties to meet their financial obligations or our inability to fully enforce our

rights against counterparties could have a material

adverse effect on our results.

●

Ratings are important to our business for a number of reasons, and a downgrade or a potential

downgrade in our credit ratings could have an adverse

impact on our results and net results.

●

We may be exposed to business, operational, regulatory,

reputational and other risks in connection with

climate change.

●

An inability to retain or attract key

personnel may affect our business and results.

●

We may incur further liabilities in respect of our defined benefit retirement

plans if the value of plan

assets is not sufficient to cover potential obligations, including as a result of differences

between actual

results and underlying actuarial assumptions and models.

Risks related to the Group’s

risk management practices

●

Risks relating to our use of quantitative models or assumptions to model client behaviour

for the

purposes of our market calculations may adversely impact our reputation

or results.

●

We may be unable to manage our risks successfully through derivatives.

Risks related to the Group’s

liquidity and financing activities

●

We depend on the capital and credit markets, as well

as customer deposits, to provide the liquidity and

capital required to fund our operations, and adverse conditions

in the capital and credit markets, or

significant withdrawals of customer deposits, may impact our liquidity,

borrowing and capital positions,

as well as the cost of liquidity, borrowings

and capital.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

●

As a holding company, ING Groep

N.V.

is dependent for liquidity on payments from its subsidiaries, many

of which are subject to regulatory and other restrictions on their ability to transact with affiliates.

Additional risks relating to ownership of ING shares

●

Holders of ING shares may experience dilution of their holdings.

●

Because we are incorporated under the laws of the Netherlands and many

of the members of our

Supervisory and Executive Board and our officers reside outside of the United States,

it may be difficult

to enforce judgments against ING or the members of our Supervisory and Executive

Boards or our

officers.

Risk factors

Any of the risks described below could have a material adverse effect

on the business activities, financial

condition, results and prospects of ING. ING may face a number of the risks described below simultaneously and

some risks described below may be interdependent. While the risk factors below have

been divided into

categories, some risk factors could belong in more than one category

and investors should carefully consider all

of the risk factors set out in this section. Additional risks of which the Company is not presently aware,

or that are

currently viewed as immaterial, could also affect the business operations

of ING and have a material adverse

effect on ING’s

business activities, financial condition, results and prospects. The market price of ING shares or

other securities could decline due to any of those risks including the risks described below,

and investors could

lose all or part of their investments.

Although the most material risk factors have been presented

first within each category,

the order in which the

remaining risk factors are presented is not necessarily an indication

of the likelihood of the risks actually

materialising, of the potential significance of the risks or of the scope of any potential negative impact to

our

business, results, financial condition and prospects.

Risks related to financial conditions, market

environment and general economic trends

Our revenues and earnings are affected by

the volatility and strength of the economic, business,

liquidity, funding and capital markets

environments of the various geographic

regions in which

we conduct business, as well as by changes in customer behaviour in these

regions, and an

adverse change in any one region could have

an impact on our business, results and financial

condition.

Because ING is a multinational banking and financial services corporation, with a global presence and serving

around 39.3 million customers, corporate

clients and financial institutions in over 40 countries, ING’s business,

results and financial condition may be significantly impacted by turmoil and volatility in the worldwide financial

markets or in the particular geographic areas in which we operate.

In Retail Banking, our products include

savings, payments, investments, loans and mortgages

in most of our Retail Banking markets. In Wholesale

Banking, we provide specialised lending, tailored corporate finance, debt and equity market

solutions, payments

& cash management, trade and treasury services. As a result, negative developments

in financial markets and/or

countries or regions in which we operate, have

in the past had and may in the future have a material adverse

impact on our business, results and financial condition, including as a result of the potential consequences listed

below.

Factors such as interest rates,

securities prices, credit spreads, liquidity spreads, exchange rates,

consumer

spending, changes in customer behaviour,

business investment, real estate values

and private equity valuations,

government spending, inflation or deflation, the volatility and strength of the capital

markets, political events

and trends, terrorism, pandemics and epidemics (such as Covid-19, as described in greater detail below under the

heading “– ING’s business, results and financial condition have

been, and likely will continue to be adversely

affected by the Covid-19 pandemic”) or other widespread health emergencies all impact the business and

economic environment and, ultimately,

our solvency, liquidity and the amount and profitability

of business we

conduct in a specific geographic region. Certain of these risks are often experienced globally as well as in specific

geographic regions and are described in greater detail below under the headings “–Interest

rate volatility and

other interest rate changes may

adversely affect our business, results and financial condition”,

“–Inflation and

deflation may negatively affect

our business, results and financial condition”,

“–Market conditions, including

those observed over the past few years and the application of IFRS 9 may

increase the risk of loans being

impaired and have a negative effect

on our results and financial condition” and “–Continued risk of political

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

instability and fiscal uncertainty in Europe and the United States, as well as ongoing

volatility in the financial

markets and the economy generally have

adversely affected, and may continue

to adversely affect, our business,

results and financial condition”.

All of these are factors in local and regional economies as well as in the global

economy,

and we may be affected by changes in any one of these factors

in any one country or region, and more

if more of these factors occur simultaneously and/or in multiple countries or regions

or on a global scale.

In case one or more of the factors mentioned above adversely affects

the profitability of our business, this might

also result, among other things, in the following:

◾

reserve and provisions inadequacies, which could ultimately be realised through profit and loss and

shareholders’ equity;

◾

the write-down of tax assets impacting net results and/or equity;

◾

impairment expenses related to goodwill and other intangible assets, impacting net result;

and/or

◾

movements in risk weighted assets for the determination of required

capital.

In particular, we are

exposed to financial, economic, market and political conditions in the Benelux countries and

Germany, from

which we derive a significant portion of our revenues in both Retail Banking and Wholesale

Banking, and which present risks of economic downturn. Though less material, we also derive substantial

revenues in the following geographic regions: Turkey,

Eastern Europe (primarily Poland among others), Southern

Europe (primarily Spain among others), East Asia (primarily Singapore among others) and Australia

which also

present risks of economic downturn. In an economic downturn, we expect that

higher unemployment, lower

family income, lower corporate earnings, higher corporate

and private debt defaults, lower business investments

and lower consumer spending would adversely affect the demand for

banking products, and that ING may need

to increase its reserves and provisions, each of which may result in overall lower

earnings. The impact of the

Covid-19 pandemic, as an example of an economic downturn, as well as the substantial monetary and

government measures, are still materialising and expected

to continue to affect our business. For more

information, refer to the risk factor

described under heading “–ING’s business, results and financial condition

have been, and likely will continue to be adversely affected

by the Covid-19 pandemic”. Securities prices, real

estate values and private equity valuations

may also be adversely impacted, and any such losses would be

realised through profit and loss and shareholders’ equity.

We also offer a number of financial products that

expose us to risks associated with fluctuations in interest rates,

securities prices, corporate and private default

rates, the value of real estate

assets, exchange rates and credit spreads.

For further information on ING’s exposure

to particular geographic areas, see Note 35 ‘Information on

geographic areas’ to the consolidated financial statements

ING’s business, results and financial condition have

been, and likely will continue to be,

adversely affected by the Covid-19 pandemic.

The Covid-19 pandemic and the related response measures introduced by various national and

local

governmental authorities aimed at preventing the further spread of the disease (such as bans on public events

with over a certain number of attendees, closures of places where larger groups

of people gather such as schools,

sports facilities, bars and restaurants, lockdowns,

border controls and travel and other restrictions)

have

disrupted the normal flow of business operations in those countries and regions where we and our customers

and counterparties operate (such as, among others, Benelux, Germany,

France, Italy,

Spain, the U.K. and the

U.S.). This disruption has adversely affected, and will likely

continue to adversely affect, global economic growth,

supply chains, manufacturing, tourism, consumer spending, asset prices and unemployment levels, and has

resulted in volatility and uncertainty across the global economy and financial markets.

In addition to the measures aimed at preventing the further spread of Covid-19, governments and central

banks

around the world have also introduced measures aimed at mitigating

the economic consequences of the

pandemic and related response measures, such as guarantee schemes, compensation

schemes and cutting

interest rates. For example,

the Dutch government has implemented economic measures aimed at protecting

jobs, households’ wages and companies, e.g., by way of tax payment holidays,

guarantee schemes and a

compensation scheme for heavily affected sectors

in the economy. These announced measures and any

additional measures, including any payment holidays with respect to mortgages

or other loans, have had and

may continue to have a significant impact on our customers

and other counterparties.

Governments, regulators and central

banks (including the ECB), have also announced that they are taking or

considering measures seeking to safeguard the stability of the financial sector,

to prevent lending to the business

sector from being jeopardised and to ensure the payment system

continues to function properly.

The ECB

currently allows banks to operate below the level

of capital required by the Pillar 2 Guidance, capital

conservation buffer and the liquidity coverage ratio,

and banks are also permitted to use a portion of their capital

instruments that do not qualify as CET1 capital to meet the Pillar 2 Requirements. Several

countries also released

or reduced countercyclical buffers

(CCyB). The ECB has also issued a recommendation to the banks that it

supervises that such banks should exercise extreme prudence when deciding on or paying out dividends or

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ING Group Annual Report 2020 on Form 20-F

performing share buy-backs until September 30, 2021. However,

it is not certain whether these or future

measures will be extended or maintained for a sufficient period of time, or whether such measures will be

successful in mitigating the economic consequences of the pandemic and related response measures. If the

pandemic is prolonged or the actions are unsuccessful, additional actions by governments and central banks may

follow and the adverse impact on the global economy will deepen, and our business, results and financial

condition may be materially adversely affected.

In 2020, the Covid-19 pandemic affected all of our businesses, including lower or negative interest

rates, lower oil

prices and credit deterioration of loans to ING’s

customers. These effects have

also resulted in an increase in the

allowance for credit losses and impairments on non-financial assets, and reduced net interest

income due to

lower interest rates. While these effects

were partly offset by resilient fee

and commission income in 2020, this

level of activity may not persist in future periods. With Covid-19 infection rates

having recently increased,

especially in some European countries, and further lockdowns measures having been reintroduced,

this may

result in changes in government responses and further downside risk towards macro-economic

developments,

with possibly a deeper risk aversion and a delayed recovery.

These developments may result in further negative

impact on our business, results and financial condition.

In 2020, ING also took certain measures to support customers impacted by the Covid-19 pandemic, including

payment holidays, offering credit

facilities to business customers under government guarantee

schemes and

providing liquidity under credit facilities to large corporate

customers. Although, following supervisory guidelines,

payment holidays do not automatically trigger an immediate classification

of the loans as in default or as

forborne, the credit quality of these loans will be monitored for future transitions into

Stage 2 and could result in

increased risk costs and additional risk weighted assets in future periods. As of December 31, 2020, in line with

the European Banking Association (EBA) moratoria guidelines, ING has a total amount of €19.4 billion of payment

holidays or 2.6% of total credit outstandings, granted

to approximately 196,000 customers. While these

customers are located across nearly all countries

in which ING operates, over 55% of these customers are in the

Netherlands and Belgium. ING also recorded €2,675 million of net additions to loan loss provisions in 2020

compared with €1,120 million in 2019. The 2020 risk costs were severely impacted by a combination of increased

collective provisioning reflecting the worsened macro

-economic indicators due to the Covid-19 pandemic, higher

Individual Stage 3 provisions, and negative rating

migration. Should these global economic conditions be

prolonged or worsen, or should the pandemic lead to additional market disruptions, we may

experience more

customer defaults and further additions to loan loss provisions. In these circumstances, we

may also experience

reduced customer activity and demand for its products and services, increased utilization of lending

commitments and higher credit and valuation adjustments on financial assets. In addition, persistently

low

interest rates for

a longer period, as well as a potential further decline in interest rates

might result in further

decreases in net interest income. These factors

and other consequences of the Covid-19 pandemic may

materially adversely affect our business, results and financial condition.

Our capital and liquidity position may also be adversely impacted by the Covid-19 pandemic and related response

measures, including as a result of changes in future levels of savings and deposits from customers, changes

asset quality, and the effects

of government or regulatory responses to the pandemic, and may require

changes

to our funding structure, impact our ability to comply with regulatory capital requirements

and adversely affect

our cost of capital and credit rating. Any of the foregoing

developments may have a material adverse

impact on

our business, results and financial condition.

As of December 31, 2020, most of our staff continue to work from home. Since May 2020, staff

in various

countries have started rotation

schemes to return to work in the office in a controlled manner,

taking into

account local circumstances and any applicable government

measures (including with respect to social

distancing). This controlled office opening process is expected to

allow for essential face-to-face meetings.

However,

with Covid-19 infection rates having recently

increased, we expect that more staff will again

work from

home. Due to the uncertainties relating to the future development of the Covid-19 pandemic, it is not certain

when our employees may be generally expected or permitted

to return to the offices. If due to illness, technical

limitations or other restrictions in connection with the pandemic, employees are unable to work or are not able

to operate as effectively

and efficiently as in the office, this may adversely affect

our business, results and

financial condition.

In addition, a situation in which most or some of our employees continue working from home may raise

operational risks, including with respect to information security,

data protection, availability of key

systems and

infrastructure integrity.

There is also a risk that we will not be effective in implementing regulatory or strategic

change programs in the current environment.

The Covid-19 pandemic has led to new banking behaviour from

customers. There has been an increase in the digital behaviour of our customers

leading to reduced traffic in

branches. Over 80% of our customers now interact

with us via digital channels only. Criminals are also taking

advantage of the Covid-19 pandemic to carry out financial fraud and exploitation

scams, with examples including

advertising and trafficking in counterfeit medicines, offering

fraudulent investment opportunities, fundraising for

fake charities and engaging in phishing schemes that prey on virus-related

fears. National authorities and

international bodies (including the Financial Action Task

Force) warn citizens and businesses on impostor,

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ING Group Annual Report 2020 on Form 20-F

investment and product scams. Although we have organized

a Covid-19 taskforce to identify and analyse new

behavioural patterns, leading to new cases of unusual transactions being reported

to the relevant authorities,

new banking behaviours may result in additional Know Your

Customer (KYC) risks. If any of these risks were to

materialize that may adversely affect

our business, results and financial condition.

The duration of the pandemic and the impact of measures taken in response by governmental

authorities,

central banks and other third parties, whether direct or indirect, such as by increasing sovereign

debt of certain

countries which may result in increased volatility and widening credit spreads, remain

uncertain. Therefore, it is

difficult to predict the extent to which our business, results and financial condition, as well as our ability to access

capital and liquidity on financial terms acceptable for us, may be materially adversely

affected.

Interest rate

volatility and other interest rate

changes may adversely affect our business,

results

and financial condition.

Changes in prevailing interest rates

may negatively affect our business, including the level of net interest

revenue

we earn, and the levels of deposits and the demand for loans. A sustained increase in the inflation rate

in our

principal markets may also negatively affect

our business, results and financial condition. For example, a

sustained increase in the inflation rate may

result in an increase in nominal market interest

rates. A failure to

accurately anticipate higher inflation and factor

it into our product pricing assumptions may result in mispricing

of our products, which could materially and adversely impact our results. On the other hand, recent concerns

regarding negative interest

rates and the low level of interest rates

generally may negatively impact our net

interest income, which may have an adverse

impact on our profitability.

A prolonged period of low interest rates,

and in some situations negative interest rates,

has resulted in, and may

continue to result in:

◾

lower earnings over time on investments, as reinvestments

will earn lower rates;

◾

increased prepayment or redemption of mortgages and fixed

maturity securities in our investment

portfolios, as well as increased prepayments of corporate

loans. This as borrowers seek to borrow at

lower interest rates potentially

combined with lower credit spreads. Consequently,

we may be required

to reinvest the proceeds into assets at

lower interest rates;

◾

lower profitability as the result of a decrease in the spread between client rates

earned on assets and

client rates paid on savings, current account and other liabilities;

◾

higher costs for certain derivative instruments that

may be used to hedge certain of our product risks;

◾

lower profitability since we may not be able to fully track the decline in interest

rates in our savings

rates;

◾

lower profitability since we may not always be entitled

to impose surcharges to customers to

compensate for the decline in interest rates;

◾

lower profitability since we may have to

pay a higher premium for the defined contribution scheme in

the Netherlands for which the premium paid is dependent on interest rate

developments and the Dutch

Central Bank’s (“DNB’s”)

methodology for determining the ultimate forward rate;

◾

lower interest rates may

cause asset margins to decrease thereby lowering our results. This may for

example be the consequence of increased competition for investments

as result of the low rates,

thereby driving margins down; and/or

◾

(depending on the position) a significant collateral posting requirement

associated with our interest rate

hedge programs, which could materially and adversely affect

liquidity and our profitability.

The foregoing impacts have been and may be further amplified in a negative

interest rate environment,

since we

may not be able to earn interest on our assets (including reserves). In addition, we have, and may

continue to,

earn negative interest on certain of our assets (including cash balances, loans and bonds), while still paying

positive interest or no interest to

others to hold our liabilities, resulting in an adverse impact on our credit spread

and lowering of our net interest income. Furthermore, in the event that

a negative interest rate

environment

results in ING’s depositors being forced

to pay interest to ING to hold cash deposits, some depositors

may choose

to withdraw their deposits rather than pay interest

to ING, which would have an adverse effect on our

reputation, business, results and financial condition. For example, in March

2020, the U.S. Federal Reserve has

cut the benchmark U.S. interest rate in response to

the Covid-19 pandemic and related impacts on the economy

and financial markets. On 1 January 2021, ING announced that it will charge negative interest

to customers on

current and deposit accounts exceeding €250,000 (such negative

interest rate will only apply to the amount by

which the current or deposit account exceeds €250,000 ). Such declines in interest rates

in the United States or

other markets in which ING and its customers and counterparties operate

may have a significant adverse effect

on our business and operations.

Alternatively,

any period of rapidly increasing interest rates

may result in:

◾

a decrease in the demand for loans;

◾

higher interest rates to be paid on customer

deposits and on debt securities that we have issued or may

issue on the financial markets from time to time to finance our operations, which would increase our

interest expenses and reduce our results;

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◾

higher interest rates which can lead to

lower investments prices and reduce the revaluation reserves,

thereby lowering IFRS equity and the capital ratios. Also the lower securities value leads to a loss of

liquidity generating capacity which needs to be compensated by attracting

new liquidity generating

capacity which reduces our results;

◾

prepayment losses if prepayment rates

are lower than expected or if interest rates

increase too rapidly

to adjust the accompanying hedges; and/or

◾

(depending on the position) a significant collateral posting requirement

associated with our interest rate

hedge program.

The default of a major market participant could disrupt the markets

and may have an adverse

effect on our business, results and financial condition.

Within the financial services industry, the severe distress

or default of any one institution (including sovereigns

and central counterparties (CCPs)) could lead to defaults

by, or the severe

distress of, other market

participants.

While prudential regulation may reduce the probability of a default

by a major financial institution, the actual

occurrence of such a default could have a material adverse

impact on ING. Such distress of, or default

by, a major

financial institution could disrupt markets or clearance and settlement

systems and lead to a chain of defaults by

other financial institutions, since the commercial and financial soundness of many financial institutions may be

closely related as a result of credit, trading, clearing or other relationships. Also the perceived lack of

creditworthiness of a sovereign or a major financial institution (or a default by any such entity)

may lead to

market-wide liquidity problems and losses or defaults by us or by other institutions. This risk is sometimes

referred to as ‘systemic

risk’ and may adversely affect financial intermediaries, such as clearing agencies, clearing

houses, banks, securities firms and exchanges with whom we interact on a daily basis and financial instruments

of sovereigns in which we invest. Systemic

risk could impact ING directly, by exposing

it to material credit losses

on transactions with defaulting counterparties or indirectly by significantly reducing

the available market liquidity

on which ING and its lending customers depend to fund their operations and/or leading to a write down of loans

or securities held by ING. In addition, ING may also be faced with additional open market risk for which hedging

or mitigation strategies may not be available

or effective (either by hedges eliminated by defaulting

counterparties, or reduce market liquidity). Systemic

risk could have a material adverse effect

on our ability to

raise new funding and on our business, results and financial condition. In addition, such distress or failure could

impact future product sales as a potential result of reduced confidence in the financial services industry.

Continued risk of political instability and fiscal uncertainty in Europe and the United

States, as

well as ongoing volatility in the financial markets and the economy

generally have adversely

affected, and may continue to adversely

affect, our business, results and financial condition.

Our global business and results are materially affected by conditions in the global capital

markets and the

economy generally.

In Europe, there are continuing concerns over weaker

economic conditions, levels of

unemployment, the availability and cost of credit, credit spreads,

and the impact of continued quantitative

easing within the Eurozone through bond repurchases and the ECB’s

targeted longer-term

refinancing operation

(‘TLTRO’). In addition, geopolitical issues, including trade tensions between the US and China, increasing

protectionism between key countries,

and issues with respect to the Middle East, Russia/Ukraine and North

Korea may all contribute to adverse

developments in the global capital markets and the economy generally.

Adverse developments in the market have

included, for example, temporary decrease in liquidity,

increased price

volatility, credit

downgrade events, and increased probability of default for

fixed income securities. Moreover,

there is a risk that an adverse credit event at one or more

European sovereign debtors (including a credit rating

downgrade or a default) could trigger a broader economic downturn in Europe and elsewhere. In addition, the

confluence of these and other factors has resulted in volatile foreign

exchange markets. International

equity

markets have also continued to experience

heightened volatility and turmoil, with issuers, including ourselves,

that have exposure to the real estate,

mortgage, private equity and credit markets

particularly affected. These

events, market upheavals and continuing

risks, including high levels of volatility,

have had and may continue to

have an adverse effect on our results,

in part because we have a large investment

portfolio.

There is also continued uncertainty over the long-term outlook for the tax,

spending and borrowing policies of

the US, the future economic performance of the US within the global economy and any potential future

budgetary restrictions in the US, with a potential impact on a future sovereign credit ratings

downgrade of the US

government, including the rating of US Treasury

securities. A downgrade of US Treasury securities could also

impact the ratings and perceived creditworthiness of instruments issued, insured or guaranteed

by institutions,

agencies or instrumentalities directly linked to the US government.

US Treasury securities and other US

government-linked securities are key

assets on the balance sheets of many financial institutions and are widely

used as collateral by financial institutions to meet their day-to

-day cash flows in the short-term debt market.

The

impact of any further downgrades to the sovereign credit rating

of the US government or a default by the US

government on its debt obligations would create

broader financial turmoil and uncertainty,

which would weigh

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ING Group Annual Report 2020 on Form 20-F

heavily on the global financial system and could consequently result in a significant adverse

impact to the

Group’s business and operations.

In many cases, the markets for investments

and instruments have been and remain illiquid, and issues relating to

counterparty credit ratings and other factors

have exacerbated pricing and valuation uncertainties.

Valuation of

such investments and instruments is a complex process involving

the consideration of market transactions,

pricing models, management judgment and other factors, and is also impacted by external factors,

such as

underlying mortgage default rates, interest

rates, rating agency actions and property valuations.

Historically

these factors have resulted in, among other things, valuation

and impairment issues in connection with our

exposures to European sovereign debt and other investments.

Any of these general developments in global financial and political conditions could negatively

impact to our

business, results and financial condition in future periods.

Discontinuation of or changes to ‘benchmark’ indices may negatively

affect our business, results

and financial condition.

Financial markets

have historically relied on Interbank Offered

Rates (‘IBORs’) benchmarks, such as the London

Interbank Offered Rate (‘LIBOR’), the Euro

OverNight Index Average (‘EONIA’)

and the Euro Interbank Offered

Rate (‘EURIBOR’). These interest rate

‘benchmarks’ have been the subject of ongoing national and international

regulatory reform. For example,

ICE Benchmark Administration (IBA), as the administrator of LIBOR, issued a

consultation with respect to its plans for the cessation for most

LIBOR rates at the end of 2021, with an 18 month

extension proposed for USD LIBOR, one of the most widely used LIBOR rates. EONIA

will cease to be published by

1 January 2022 and the European Money Markets Institute (EONIA’s

administrator) has indicated that EONIA

cannot be used in any contracts that may be outstanding as of 1 January 2022. Following the implementation

such reforms, the manner of administration of benchmarks may change, with the

result that they may perform or

be calculated differently than in the past, or such benchmarks

may cease to exist entirely,

or there could be other

consequences which cannot be predicted.

Public authorities have initiated industry working groups in various jurisdictions to develop

and recommend

alternative rates that could serve as replacements

when such rates cease to exist or materially change. This is

commonly referred to as a fallback rate.

The US Federal Reserve’s

Alternative Reference Rates

Committee

(commonly referred to as ‘ARRC’)

has recommended adoption of the Secured Overnight Financing Rate

(commonly referred to as ‘SOFR’) as an alternative to

USD LIBOR, and the limited extension announced by the

IBA has eased the timeline for the transition of existing contracts referencing

USD LIBOR. For EURIBOR, the

Working Group on Euro Risk-Free

Rates is continuing its work on developing recommended fallback rates

based

on the “euro short-term rate”

(€STR). €STR is being published and is now widely used, and calculation of the

EONIA benchmark described above has been modified to refer to the €STR benchmark until the EONIA

benchmark is discontinued.

Public authorities have also recognised that certain LIBOR contracts do not contain

any alternatives, contain

inappropriate alternatives, or cannot be renegotiated

or amended prior to the expected cessation of LIBOR. In

response to this challenge the FCA, as the supervisor of LIBOR, plans to make use of the proposed powers

granted to them to enable continued publication of a “synthetic”

LIBOR using a different methodology and

inputs, which may help reduce disruption to holders of tough legacy contracts.

However,

there is no certainty as

to whether the FCA will exercise these powers or what

form the revised methodology would take, and the FCA

has consequently encouraged users of LIBOR to renegotiate

or amend as many contracts as possible before the

relevant LIBOR ceases.

In response, the European Commission has announced various legislative fixes, that most

notably reduce the scope for potential conflict with the solutions proposed by other jurisdictions. However,

there

is no guarantee that regulators will implement

measures to address such legacy contracts, or that such measures

will be effective in avoiding business disruption or contractual

disputes.

The potential discontinuation of interest rate

benchmarks or any other benchmark, or changes in the

methodology or manner of administration of any benchmark, could result in a number of risks for the Group,

its

customers, and the financial services industry more widely. These risks

include legal risks in relation to changes

required to documentation for new and existing

transactions. The Group may also be exposed to operational

risks or incur additional costs due to the potential requirement to

adapt IT systems, trade reporting infrastructure

processes, or in relation to communications with clients or other parties and engagement during the transition

period. In addition to the heightened conduct and operational risks, the process of adopting new reference

rates

may expose the Group to an increased level of financial risk, such as potential earnings volatility resulting

from

contract modifications and changes in hedge accounting relationships.

It is not currently possible to determine

the full impact of such changes on the Group, and the implementation of alternative benchmark rates

may have

a material adverse effect on our business, results and financial condition

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Inflation and deflation may negatively

affect our business, results and financial condition.

A sustained increase in the inflation rate in our principal markets

would have multiple impacts on us and may

negatively affect our business, results and financial condition. For example,

a sustained increase in the inflation

rate may result in an increase in market

interest rates, which may:

◾

decrease the estimated fair value of certain fixed

income securities that we hold in our investment

portfolios, resulting in:

◾

reduced levels of unrealised capital gains available

to us, which could negatively impact our

solvency position and net income, and/or

◾

a decrease in collateral values,

◾

result in increased withdrawal of certain savings products,

particularly those with fixed rates below

market rates,

◾

require us, as an issuer of securities, to pay higher interest rates

on debt securities that we issue in the

financial markets from time to time to finance our operations, which would increase our interest

expenses and reduce our results.

A significant and sustained increase in inflation has historically also been associated with decreased

prices for

equity securities and sluggish performance of equity markets generally.

A sustained decline in equity markets

may:

◾

result in impairment charges to equity securities that we hold in our investment portfolios and

reduced

levels of unrealised capital gains available to

us which would reduce our net income, and

◾

lower the value of our equity investments impacting our capital position.

In addition, a failure to accurately anticipate

higher inflation and factor it into our product pricing may result in a

systemic mispricing of our products, which would negatively impact

our results.

On the other hand, deflation experienced in our principal markets may also adversely affect

our financial

performance. In recent years, the risk of low inflation and even deflation (i.e., a continued

period with negative

rates of inflation) in the Eurozone has materialized.

Deflation may erode collateral values

and diminish the

quality of loans and cause a decrease in borrowing levels, which would negatively affect

our business and results.

Market conditions, including those observed over the past few

years, and the application of IFRS

9 may increase the risk of loans being impaired and have a negative

effect on our results and

financial condition.

We are exposed to the risk that our borrowers

(including sovereigns) may not repay their loans according to their

contractual terms and that the collateral

securing the payment of these loans may be insufficient. We may

see

adverse changes in the credit quality of our borrowers and counterparties, for

example, as a result of their

inability to refinance their indebtedness, with increasing delinquencies, defaults and insolvencies across a range

of sectors. This may lead to impairment charges on loans and other assets, higher costs and additions to loan loss

provisions. A significant increase in the size of our provision for loan losses could have

a material adverse effect

on our business, results and financial condition. Also see above under the heading “–ING’s business, results and

financial condition have been, and likely will continue to be adversely affected

by the Covid-19 pandemic”.

As set

out there, we expect to be affected by

the Covid-19 pandemic through its impact on, among others, the financial

condition of our customers or other counterparties.

IFRS 9 ‘Financial Instruments’ became effective as per 1 January 2018 and results in loan loss provisions that

may

be recognized earlier,

on a more forward looking basis and on a broader scope of financial instruments than was

previously the case under IAS 39. ING has applied the classification, measurement, and impairment requirements

retrospectively by adjusting the opening balance sheet and opening equity as at 1 January 2018. As a result of

applying IFRS 9, a shift in the forward looking consensus view of economic conditions may materially impact the

models used to calculate loan loss provisions under IFRS 9 and cause more volatility in, or higher levels of,

loan

loss provisions, any of which could adversely affect the Group’s

results, financial condition or regulatory capital

position.

Economic and other factors could lead to contraction

in the residential mortgage and commercial lending market

and to decreases in residential and commercial property prices, which could generate

substantial increases in

impairment losses. Additionally, continuing low oil prices could have

an influence on the repayment capacity of

certain corporate borrowers

active in the oil and oil related services industries.

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ING Group Annual Report 2020 on Form 20-F

We may incur losses due to failures

of banks falling under the scope of state compensation

schemes.

While prudential regulation is intended to minimize the risk of bank failures, in the

event such a failure occurs,

given our size, we may incur significant compensation payments

to be made under the Dutch Deposit Guarantee

Scheme (DGS), which we may be unable to recover from the bankrupt estate,

and therefore the consequences of

any future failure of such a bank could be significant to ING. Such costs and

the associated costs to be borne by

us may have a material adverse effect

on our results and financial condition.

On the basis of the EU Directive on

deposit guarantee schemes, ING pays quarterly risk-weighted

contributions into

a DGS-fund.

The DGS-fund is to

grow to a target size of 0.8% of all deposits guaranteed

under the DGS, which is expected to be reached in July

In case of failure of a Dutch bank, depositor compensation is paid from the DGS-fund. If the available

financial means of the fund are insufficient, Dutch banks, including ING, may be required pay to

extraordinary ex-

post contributions not exceeding 0.5% of their covered deposits per calendar year.

In exceptional circumstances

and with the consent of the competent authority,

higher contributions may be required. However,

extraordinary

ex-post contributions may be temporarily deferred

if, and for so long as, they would jeopardise the

solvency or

liquidity of a bank. Depending on the size of the failed bank, the available financial means in the fund, and the

required additional financial means, the impact of the extraordinary ex-post contributions on ING may

material.

Since 2015, the EU has been discussing the introduction of a pan-European deposit guarantee scheme (‘EDIS’),

(partly) replacing or complementing national compensation schemes in two or three phases. Proposals contain

elements of (re)insurance, mutual lending and mutualisation of funds. The new model is intended to be ‘overall

cost-neutral’.

Discussions have continued in 2020, but it remains uncertain when EDIS will be introduced and, if

introduced, what impact EDIS would have on ING’s

business and operations.

Risks related to the regulation and supervision of the Group

Non-compliance with laws and/or regulations concerning financial services or financial

institutions,

including with respect to financial economic crimes, could result in fines and other

liabilities, penalties or consequences for us, which could materially affect our business and

reduce our profitability.

ING has faced, and in the future may continue to face, the risk of consequences in connection with non-

compliance with applicable laws and regulations. For additional information on legal

proceedings, see Note 45

‘Legal proceedings’ to the consolidated financial statements.

There are a number of risks in areas where

applicable regulations may be unclear,

subject to multiple interpretations or under development, or where

regulations may conflict with one another,

or where regulators revise their previous guidance or courts overturn

previous rulings, which could result in our failure to meet applicable standards.

Regulators and other authorities

have the power to bring administrative or judicial proceedings against

us, which could result, among other things,

in suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, criminal penalties or

other disciplinary action, which could materially harm our results and financial condition. If we fail to address, or

appear to fail to address, any of these matters

appropriately,

our reputation could be harmed and we could be

subject to additional legal risk, which could, in turn, increase the size and number of claims and damages brought

against us or subject us to enforcement actions, fines and penalties.

Furthermore, as a financial institution, we are exposed to the risk of unintentional involvement

in criminal

activity in connection with the commission of financial economic crimes, including with respect to money

laundering and the funding of terrorist and other criminal activities. The failure or perceived failure

by us to

comply with legal and regulatory requirements with respect to

financial economic crimes may result in adverse

publicity, claims and allegations, litigation

and regulatory investigations and sanctions, which may have

a material

adverse effect on our business, results, financial condition and/or

prospects in any given period. For further

discussion of the impact of litigation, enforcement proceedings, investigations

or other regulatory actions with

respect to financial economic crimes, see “– We may be subject to litigation,

enforcement proceedings,

investigations or other regulatory actions, and adverse

publicity” below.

Changes in laws and/or regulations governing

financial services or financial institutions or the

application of such laws and/or regulations may

increase our operating costs and limit our

activities.

We are subject to detailed banking laws and financial regulation in the jurisdictions in which we conduct

business. Regulation of the industries in which we operate is becoming increasingly more

extensive and complex,

while also attracting supervisory scrutiny.

Compliance with applicable and new laws and regulations is resources-

intensive, and may materially increase our operating

costs. Moreover,

these regulations intended to protect our

customers, markets and society as a whole can limit our activities, among others, through stricter

net capital,

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ING Group Annual Report 2020 on Form 20-F

market conduct and transparency requirements

and restrictions on the businesses in which we can operate or

invest.

Our revenues and profitability and those of our industry have been and will continue to

be impacted by

requirements relating to capital, additional loss-absorbing capacity,

leverage, minimum liquidity and long-term

funding levels, requirements related to resolution and recovery

planning, derivatives clearing and margin rules

and levels of regulatory oversight, as well as limitations on which and, if permitted,

how certain business

activities may be carried out by financial institutions.

We are subject to additional legal and regulatory

risk in certain countries where we operate

with

less developed or predictable legal and regulatory frameworks.

In certain countries in which we operate, judiciary and dispute resolution systems

may be less effective. As a

result, in case of a breach of contract, we may have

difficulties in making and enforcing claims against contractual

counterparties and, if claims are made against us, we might encounter difficulties

in mounting a defence against

such allegations. If we become party to legal proceedings in a market

with an insufficiently developed judicial

system, it could have an adverse

effect on our operations and net results.

In addition, as a result of our operations in certain countries, we are subject to risks of possible nationalisation,

expropriation, price controls, exchange

controls and other restrictive government actions, as well as the outbreak

of hostilities and or war,

in these markets. Furthermore, the current economic environment

in certain countries

in which we operate may increase the likelihood for

regulatory initiatives to enhance consumer protection or to

protect homeowners from foreclosures.

Any such regulatory initiative could have

an adverse impact on our

ability to protect our economic interest, for

instance in the event of defaults on residential mortgages

We are subject to the regulatory

supervision of the ECB and other regulators with extensive

supervisory and investigatory powers.

In its capacity as principal prudential supervisor in the EU, the ECB has extensive supervisory and investigatory

powers, including the ability to issue requests for information,

to conduct regulatory investigations

and on-site

inspections, and to impose monetary and other sanctions. For example, under the Single Supervisory Mechanism

(SSM), the regulators with jurisdiction over the Group, including the ECB, may

conduct stress tests and have

discretion to impose capital surcharges on financial institutions for

risks that are not otherwise recognised in risk-

weighted assets or other surcharges depending on the individual situation of the bank and take or require

other

measures, such as restrictions on or changes to the Group’s

business. Competent authorities may also, if the

Group fails to comply with regulatory requirements,

in particular with supervisory actions, minimum capital

requirements (including buffer requirements)

or with liquidity requirements, or if there are shortcomings in its

governance and risk management processes, prohibit the Group from making dividend payments

to shareholders

or distributions to holders of its regulatory capital instruments. Generally,

a failure to comply with prudential or

conduct regulations could have a material adverse

effect on the Group’s

business, results and financial condition.

The regulatory consequences of the United Kingdom’s

withdrawal from the European Union may

have adverse effects on our business, results

and financial condition.

On 24 December 2020, the United Kingdom and the EU agreed to the EU-UK Trade

and Cooperation Agreement

(the “TCA”) in connection with the departure of the UK from the EU (commonly referred to

as ‘Brexit’). However,

the financial services provisions of the TCA are very limited and , as a result, UK-based financial services providers

lost EU passporting rights as of 1 January 2021 and EU-UK financial services are now subject to unilateral

equivalence decisions. EU and UK regulators have, however,

taken certain measures to address overall

financial

stability risks, such as the temporary extension by the EU of equivalence recognition to

UK-based central

counterparties (UK CCPs) through to 30 June 2022. There is, however,

no guarantee that such equivalence

decisions will be issued by the EU or the UK in the future, or that any extensions or renewals of temporary

equivalence decisions or similar transitional arrangements will be made by the EU or the UK in the future. The

absence of such equivalence decisions for financial services could have a negative impact on ING’s

activities, with

the absence of future UK CCPs recognition expected to increase costs

for both ING and its financial markets

customers. In addition, Brexit has required and will require

other changes to ING’s business and operations,

including requiring ING to apply for a third country branch banking licenses in the UK for which ECB conditions

and PRA & FCA authorisation decisions remain pending. ING is also progressing the move of certain financial

markets activities from London to Amsterdam in light

of ECB’s supervisory expectations on booking models as a

result of Brexit. The regulatory impact of Brexit continues to

present material risks and uncertainties, particularly

as to how regulations may diverge between the EU and the UK, which could materially

increase ING’s compliance

costs and have a material adverse effect

on ING’s business, results and financial condition.

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Failure to meet minimum capital and other prudential regulatory

requirements as applicable to

us from time to time may have a material

adverse effect on our business, results and financial

condition and on our ability to make payments on certain

of our securities.

ING is subject to a variety of regulations that require us to comply with minimum requirements

for capital (own

funds) and additional loss absorbing capacity, as well as for liquidity,

and to comply with leverage restrictions. In

addition, such capital, liquidity and leverage requirements and their application

and interpretation may change.

Any changes may require us to maintain more

capital or to raise a different

type of capital by disqualifying

existing capital instruments from continued inclusion in regulatory

capital, requiring replacement with new

capital instruments that meet the new criteria. Sometimes changes are introduced

subject to a transitional

period during which the new requirements are being phased in, gradually progressing to a fully phased-in, or

fully-loaded, application of the requirements.

Any failure to comply with these requirements,

or to adapt to changes in such requirements, may have a material

adverse effect on our business, results and financial condition, and may require

us to seek additional capital.

Failures to meet minimum capital or other prudential requirements

may also result in ING being prohibited from

making payments on certain of our securities. Because implementation phases and transposition into EU or

national regulation where required may often involve

a lengthy period, the impact of changes in capital, liquidity

and leverage regulations on our business, results and financial condition, and on our ability to make payments

certain of our securities, is often unclear.

For further discussion of the impact of minimum capital and other prudential regulatory requirements on ING,

see “Item 4. Information on the Company—Regulation and Supervision—Regulatory

Developments—Basel III and

European Union Standards as currently applied by ING Group.”

Our US commodities and derivatives business is subject to CFTC

and SEC regulation under the

Dodd-Frank Act.

Our affiliate ING Capital Markets LLC is registered

with the Commodity Futures Trading Commission (“CFTC”) as a

swap dealer and is subject to CFTC regulation of the off-exchange

derivatives market pursuant to Title VII of the

U.S. Dodd-Frank Wall Street Reform

and Consumer Protection Act

(“Dodd-Frank”).

Operating as a swap dealer

requires compliance with CFTC regulatory requirements,

which may be burdensome, impose additional

compliance costs and could adversely affect

the profitability of this business, as well as exposing ING to the risk

of non-compliance with these regulations.

ING Capital Markets LLC is also expected to register

with the SEC as a security-based swap dealer pursuant to

Dodd-Frank and SEC regulations enacted thereunder effective

1 November 2021. SEC registration may increase

ING Capital Markets LLC’s operational

costs as a result of compliance, margin, capital and other requirements,

and result in a substantial portion or all of ING’s security-based

swap activities with U.S. persons being conducted

through ING Capital Markets LLC. These registration

and related requirements may also reduce trading

activity,

reduce market liquidity and increase volatility in the relevant

markets.

In addition, new position limits under Dodd-Frank applicable to the derivatives market generally

for uncleared

swaps referencing any of twenty

-five commodity futures contracts could limit ING’s

position sizes in these swaps

and similarly limit the ability of counterparties to utilize certain of our products to the extent

hedging exemptions

from the position limits are unavailable. Such regulation of the derivative

markets and market participants will

likely result in increased cost of hedging and other trading activities, both for ING and its customers,

which could

expose our business to greater risk and could reduce the size and profitability

of our customer business. The

imposition of these regulatory restrictions and requirements, could also result in reduced

market liquidity,

which

could in turn increase market volatility and the risks and costs of hedging and other trading

activities.

Any of the foregoing factors, and any

further regulatory developments with respect to commodities and

derivatives, could have a material impact on our business, results and financial condition.

For further discussion of the impact of regulation of commodities and derivatives on ING, see “Item 4.

Information on the Company—Regulation and Supervision—Regulatory Developments

—Dodd-Frank Act and

other US Regulations.”

We are subject to several

other bank recovery and resolution regimes that include statutory

write down and conversion as well as other powers,

which remains subject to significant

uncertainties as to scope and impact on us.

We are subject to several recovery

and resolution regimes, including the Single Resolution Mechanism (‘SRM’),

the ‘Bank Recovery and Resolution Directive’ (‘BRRD’) as implemented in national legislation, and the Dutch

‘Intervention Act’ (Wet bijzondere maatregelen financiële ondernemingen,

as implemented in the Dutch

Financial Supervision Act). The SRM applies to banks that are supervised by the ECB under the SSM, with the aim

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of ensuring an orderly resolution of failing banks at minimum costs for taxpayers

and the real economy. The

BRRD establishes a common framework for the recovery

and resolution for banks within the European Union,

with the aim of providing supervisory authorities and resolution authorities with common tools and powers to

address banking crises pre-emptively in order to safeguard

financial stability and minimise taxpayers’ exposure

losses. In addition, the Intervention Act confers wide-ranging powers

to the Dutch Minister of Finance, including,

among other things, in relation to shares and other securities issued by us or with our cooperation or other

claims on us (including, without limitation, expropriation thereof) if there is a serious and immediate threat to

the stability of the financial system. Any application of statutory

write-down and conversion or other powers

would not be expected to constitute an event of default

under our securities entitling holders to seek repayment.

If any of these powers were to be exercised

in respect of ING, there could be a material adverse effect

on both

ING and on holders of ING securities, including through a material adverse effect on credit

ratings and/or the

price of our securities. Investors in our securities may lose their investment

if resolution measures are taken

under current or future regimes.

For further discussion of the impact of bank recovery and resolution regimes on ING, see “Item 4. Information on

the Company—Regulation and Supervision—Regulatory Developments—Bank Recovery

and Resolution

Directive.”

Risks related to litigation, enforcement

proceedings and investigations and to

changes in tax

laws

We may be subject to litigation,

enforcement proceedings, investigations

or other regulatory

actions, and adverse publicity.

We are involved in governmental,

regulatory, arbitration

and legal proceedings and investigations involving

claims by and against us which arise in the ordinary course of our businesses, including in connection with our

activities as financial services provider, employer,

investor and taxpayer.

As a financial institution, we are subject

to specific laws and regulations governing financial services or financial institutions. See “– Changes in laws

and/or regulations governing financial services or financial institutions or the application of such laws and/or

regulations may increase our operating costs and limit our activities” above. Financial reporting

irregularities

involving other large and well-known companies, possible findings of government authorities in various

jurisdictions which are investigating several

rate-setting processes, notifications made by whistleblowers,

increasing regulatory and law enforcement scrutiny

of ‘know your customer’ anti-money laundering, tax evasion,

prohibited transactions with countries or persons subject to sanctions, and bribery or other anti-corruption

measures and anti-terrorist-financing procedures and their effectiveness,

regulatory investigations of the banking

industry, and litigation

that arises from the failure or perceived failure

by us to comply with legal, regulatory,

tax

and compliance requirements could result in adverse publicity and reputational

harm, lead to increased

regulatory supervision, affect our ability to attract

and retain customers and maintain access to the capital

markets, result in cease and desist orders, claims, enforcement

actions, fines and civil and criminal penalties,

other disciplinary action or have other material adverse effects

on us in ways that are not predictable. Some

claims and allegations may be brought by or on behalf of a class and claimants may seek large or indeterminate

amounts of damages, including compensatory,

liquidated, treble and punitive damages. Our reserves for

litigation liabilities may prove to be inadequate.

Claims and allegations, should they become public, need not be

well founded, true or successful to have a negative

impact on our reputation. In addition, press reports and other

public statements that assert some form of wrongdoing could

result in inquiries or investigations by regulators,

legislators and law enforcement officials, and responding

to these inquiries and investigations, regardless

of their

ultimate outcome, is time consuming and expensive. Adverse publicity,

claims and allegations, litigation and

regulatory investigations and sanctions may have

a material adverse effect on our business, results, financial

condition and/or prospects in any given period.

We are subject to different

tax regulations in each of the jurisdictions where we conduct

business, and are exposed to changes in tax laws,

and risks of non-compliance with or

proceedings or investigations with respect

to, tax laws.

Changes in tax laws (including case law) could increase our taxes

and our effective tax rates

and could materially

impact our tax receivables and liabilities as well as deferred tax

assets and deferred tax liabilities, which could

have a material adverse effect

on our business, results and financial condition. Changes in tax laws could also

make certain ING products less attractive,

which could have adverse consequences for our businesses and

results. Because of the geographic spread of its business, ING may be subject to tax audits, investigations

and

procedures in numerous jurisdictions at any point in time. Although we believe that we have

adequately

provided for all our tax positions, the ultimate resolution of these audits, investigations

and procedures may

result in liabilities which are different from the amounts recognized.

In addition, increased bank taxes in

countries where the Group is active result in increased taxes

on ING’s banking operations, which could negatively

impact our operations, financial condition and liquidity.

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We may be subject to withholding tax

if we fail to comply with the Foreign Account Tax

Compliance Act (“FATCA”)

and other US withholding tax regulations

Due to the nature of its business, ING is subject to various provisions of US tax law.

These include FATCA,

which

requires ING to provide certain information

for the US Internal Revenue Service (“IRS”) and the Qualified

Intermediary (“QI”) requirements, which require withholding tax

on certain non US-source payments. Failure to

comply with FATCA

and/or QI requirements and regulations could also harm our reputation

and could subject the

Group to enforcement actions, fines and penalties, which could have a material

adverse effect on our business,

reputation, revenues, results, financial condition and prospects. For additional

information with respect to

specific proceedings, see Note 45 ‘Legal proceedings’ to the consolidated financial statements.

For further

discussion of FATCA

and QI requirements with respect to ING, see “Item 4. Information on the Company—

Regulation and Supervision—Regulatory Developments—Bank Recovery

and Resolution Directive.”

ING is exposed to the risk of claims from customers

who feel misled or treated unfairly because

of advice or information received.

Our products and services, including banking products and advice services for third-party products are exposed

to claims from customers who might allege that they have

received misleading advice or other information from

advisers (both internal and external) as to which products were most

appropriate for them, or that the terms and

conditions of the products, the nature of the products or the circumstances

under which the products were sold,

were misrepresented to them. When new financial products are

brought to the market, ING engages in a

multidisciplinary product approval process in connection with the development and distribution of such

products, including production of appropriate marketing and communication

materials. Notwithstanding these

processes, customers may make

claims against ING if the products do not meet their expectations. Customer

protection regulations, as well as changes in interpretation

and perception by both the public at large and

governmental authorities of acceptable market practices,

influence customer expectations.

Products distributed through person-to-person sales forces

have a higher exposure to such claims as the sales

forces may provide face-to-face

financial planning and advisory services. Complaints may also arise if customers

feel that they have not been treated

reasonably or fairly,

or that the duty of care has not been complied with.

While a considerable amount of time and resources have been invested

in reviewing and assessing historical

sales practices and products that were sold in the past, and in the maintenance of risk management, legal

and

compliance procedures to monitor current sales practices, there

can be no assurance that all of the issues

associated with current and historical sales practices have

been or will be identified, nor that any issues already

identified will not be more widespread than presently estimated.

The negative publicity associated with any sales practices, any

compensation payable in respect of any such

issues and regulatory changes resulting from such issues, has had and could have a material

adverse effect on our

reputation, business, results, financial condition and prospects. For additional information

regarding legal

proceedings or claims, see Note 45 ‘Legal proceedings’ to the consolidated financial statements

Risks related to the Group’s

business and operations

Operational risks, such as systems

disruptions or failures, breaches of security,

cyber attacks,

human error,

changes in operational practices, inadequate

controls including in respect of third

parties with which we do business, natural disasters

or outbreaks of communicable diseases may

adversely impact our reputation, business and results.

We face the risk that the design and operating effectiveness

of our controls and procedures may prove

to be

inadequate. Operational risks are inherent to

our business. Our businesses depend on the ability to process and

report a large number of transactions efficiently and accurately.

In addition, we routinely transmit, receive and

store personal, confidential and proprietary information

by email and other electronic means. Although we

endeavour to safeguard our systems

and processes, losses can result from inadequately trained or skilled

personnel, IT failures (including due to a computer virus or a failure to anticipate

or prevent cyber attacks or

other attempts to gain unauthorised access to digital systems

for purposes of misappropriating assets or

sensitive information, corrupting data, or impairing operational

performance, or security breaches by third

parties), inadequate or failed internal control processes and systems,

regulatory breaches, human errors,

employee misconduct, including fraud, or from natural disasters

or other external events that interrupt normal

business operations. Such losses may adversely affect our

reputation, business and results. We depend on the

secure processing, storage and transmission of confidential

and other information in our computer systems and

networks. The equipment and software used in our computer systems

and networks may not always be capable

of processing, storing or transmitting information as expected.

Despite our business continuity plans and

procedures, certain of our computer systems and

networks may have insufficient recovery

capabilities in the

event of a malfunction or loss of data. As part of our Accelerated Think Forward strategy,

we are consistently

managing and monitoring our IT risk profile globally. ING is subject to increasing regulatory

requirements

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including EU General Data Protection Regulation (‘GDPR’)

and EU Payment Services Directive (‘PSD2’). Failure to

appropriately manage and monitor our IT risk profile could affect

our ability to comply with these regulatory

requirements, to securely and efficiently serve our clients or to timely,

completely or accurately process, store

and transmit information, and may adversely impact our reputation,

business and results. For further description

of the particular risks associated with cybercrime, which is a specific risk to ING as a result of its strategic focus

technology and innovation, see “–We are subject to

increasing risks related to cybercrime and compliance with

cybersecurity regulation” below.

Widespread outbreaks of communicable diseases may impact the health of our employees, increasing

absenteeism, or may cause a significant increase in the utilisation of health benefits offered

to our employees,

either or both of which could adversely impact our business. Also see above under the heading “–ING’s business,

results and financial condition have been, and likely will continue to be adversely

affected by the Covid-19

pandemic”. As set

out there, we expect to be affected by the Covid-19 pandemic through

its impact on, among

others, our employees. We also face physical

risks, including natural disasters as a direct result

of climate change,

such as extreme weather events or rising water levels,

which could have a material adverse effect

on our

operations, particularly where our headquarters may be impacted. For further description of the risks associated

herewith, see “–We may be exposed to business, operational,

regulatory,

reputational and other risks in

connection with climate change’ below. In addition, other events

including unforeseeable and/or catastrophic

events can lead to an abrupt interruption of activities, and our operations may be subject to

losses resulting from

such disruptions. Losses can result from destruction or impairment of property,

financial assets, trading positions,

and the loss of key personnel. If our business continuity plans are not able to be implemented, are not effective

or do not sufficiently take such events into account,

losses may increase further.

We are subject to increasing risks related

to cybercrime and compliance with cybersecurity

regulation.

Like other financial institutions and global companies, we are regularly the target

of cyber attacks, which is a

specific risk to ING as a result of its strategic focus on technology and innovation. In particular,

threats from

Distributed Denial of Service (‘DDoS’), targeted attacks

(also called Advanced Persistent Threats)

and

Ransomware intensify worldwide, and attempts to

gain unauthorised access and the techniques used for such

attacks are increasingly sophisticated.

We have faced, and expect to continue

to face, an increasing number of

cyber attacks (both successful and unsuccessful) as we have further digitalized.

This includes the continuing

expansion of our mobile- and other internet-based products and services, as well as our usage and reliance on

cloud technology. In particular,

ING is regularly subject to DDoS attacks, which are becoming increasingly

sophisticated. For example, in 2020 ING experienced DDoS attacks

in Turkey and Belgium. However,

to date ING

has not experienced a material loss of money or data due to cybercrime.

Cybersecurity, customer

data and data privacy have become the subject of increasing legislative and

regulatory

focus. The EU’s second Payment

Services Directive (‘PSD2’) and GDPR are examples of such regulations. In certain

locations where ING is active, there are additional local regulatory requirements

and legislation on top of EU

regulations that must be followed for business conducted

in that jurisdiction. Some of these legislations and

regulations may be conflicting due to local regulatory interpretations.

We may become subject to new EU and

local legislation or regulation concerning cybersecurity,

security of customer data in general or the privacy of

information we may store or maintain.

Compliance with such new legislation or regulation could increase the

Group’s compliance cost.

Failure to comply with new and existing legislation or regulation

could harm our

reputation and could subject the Group to enforcement

actions, fines and penalties.

ING may be exposed to the risks of misappropriation, unauthorised access, computer viruses or other malicious

code, cyber attacks and other external attacks

or internal breaches that could have a security impact. These

events could also jeopardise our confidential information or that

of our clients or our counterparties and this

could be exacerbated by the increase in data protection

requirements as a result of GDPR. These events can

potentially result in financial loss and harm to our reputation, hinder our operational effectiveness,

result in

regulatory censure, compensation costs or fines resulting from regulatory

investigations and could have a

material adverse effect on our business, reputation,

revenues, results, financial condition and prospects. Even

when we are successful in defending against cyber attacks,

such defence may consume significant resources or

impose significant additional costs on ING.

Because we operate in highly competitive markets,

including our home market, we may not be

able to increase or maintain our market share,

which may have an adverse effect

on our results.

There is substantial competition in the Netherlands and the other countries in which we do business for the types

of wholesale banking, retail banking, investment banking and other products and services we provide. Customer

loyalty and retention can be influenced by a number of factors,

including brand recognition, reputation, relative

service levels, the prices and attributes of products and services, scope of distribution, credit ratings and actions

taken by existing or new competitors

(including non-bank or financial technology competitors). A decline in our

competitive position as to one or more of these factors could adversely

impact our ability to maintain or further

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increase our market share, which would adversely affect

our results. Such competition is most pronounced in our

more mature markets of the Netherlands, Belgium, the rest

of Western Europe and Australia.

In recent years,

however,

competition in emerging markets, such as Asia and Central and Eastern

Europe, has also increased as

large financial services companies from more developed countries have sought to

establish themselves in

markets which are perceived to offer

higher growth potential, and as local institutions have become more

sophisticated and competitive and proceeded to form

alliances, mergers or strategic relationships

with our

competitors. The Netherlands is our largest market.

Our main competitors in the banking sector in the

Netherlands are ABN AMRO Bank and Rabobank.

Competition could also increase due to new entrants (including non-bank and financial technology competitors)

in the markets that may have new operating

models that are not burdened by potentially costly legacy

operations and that are subject to reduced regulation. New entrants

may rely on new technologies, advanced

data and analytic tools, lower cost to serve, reduced regulatory burden

and/or faster processes in order to

challenge traditional banks. Developments in technology has also accelerated

the use of new business models,

and ING may not be successful in adapting to this pace of change or may incur significant costs in adapting its

business and operations to meet such changes. For example, new business models have

been observed in retail

payments, consumer and commercial lending (such as peer-to-peer lending), foreign exchange

and low-cost

investment advisory services. In particular,

the emergence of disintermediation in the financial sector resulting

from new banking, lending and payment solutions offered by rapidly

evolving incumbents, challengers and new

entrants, in particular with respect to payment services and products, and the introduction

of disruptive

technology may impede our ability to grow or retain our market

share and impact our revenues and profitability.

Increasing competition in the markets in which we operate

(including from non-banks and financial technology

competitors) may significantly impact our results if we are unable to

match the products and services offered by

our competitors. Future economic turmoil may accelerate

additional consolidation activity. Over time, certain

sectors of the financial services industry have become more concentrated,

as institutions involved in a broad

range of financial services have been acquired by or merged into other firms or have declared

bankruptcy. These

developments could result in our competitors gaining greater

access to capital and liquidity, expanding their

ranges of products and services, or gaining geographic diversity.

We may experience pricing pressures as a result

of these factors in the event that some of our competitors

seek to increase market share by reducing prices.

We may not always

be able to protect our intellectual property developed in our products

and

services and may be subject to infringement claims, which could adversely impact our core

business, inhibit efforts to monetize our internal innovations

and restrict our ability to capitalize

on future opportunities.

In the conduct of our business, we rely on a combination of contractual rights with third parties and copyright,

trademark, trade name, patent and trade secret

laws to establish and protect our intellectual property,

which we

develop in connection with our products and services. Third parties may infringe or misappropriate our

intellectual property.

We may have to litigate

to enforce and protect our copyrights, trademarks,

trade names,

patents, trade secrets and know-how or to

determine their scope, validity or enforceability.

In that event, we

may be required to incur significant costs, and our efforts

may not prove successful. The inability to secure or

protect our intellectual property assets could have an adverse

effect on our core business and our ability to

compete, including through the monetization of our internal innovations.

We may also be subject to claims made by third parties for (1) patent,

trademark or copyright infringement, (2)

breach of copyright, trademark or licence usage rights, or (3) misappropriation of trade

secrets. Any such claims

and any resulting litigation could result in significant expense and liability for

damages. If we were found to have

infringed or misappropriated a third-party patent or other intellectual property

right, we could in some

circumstances be enjoined from providing certain products or services to our customers

or from utilizing and

benefiting from certain methods, processes, copyrights, trademarks,

trade secrets or licences. Alternatively,

could be required to enter into costly licensing arrangements

with third parties or to implement a costly

workaround. Any of these scenarios could have a material

adverse effect on our business and results and could

restrict our ability to pursue future business opportunities.

The inability of counterparties to meet their financial obligations or our inability to

fully enforce

our rights against counterparties could have

a material adverse effect on our results.

Third parties that have an payment obligations to

ING, or obligations to return money,

securities or other assets,

may not pay or perform under their obligations. These parties include the issuers and guarantors

(including

sovereigns) of securities we hold, borrowers under loans originated, reinsurers,

customers, trading

counterparties, securities lending and repurchase counterparties, counterparties

under swaps, credit default and

other derivative contracts, clearing agents, exchanges,

clearing houses and other financial intermediaries.

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Defaults by one or more of these parties on their obligations to us due to bankruptcy,

lack of liquidity, downturns

in the economy or real estate values, continuing low oil or other commodity prices, operational

failure or other

factors, or even rumours about potential defaults

by one or more of these parties or regarding a severe distress

of the financial services industry generally, could have

a material adverse effect on our results, financial condition

and liquidity. Given the high level of interdependence

between financial institutions, we are and will continue to

be subject to the risk of deterioration of the commercial and financial soundness, or perceived soundness, of

sovereigns and other financial services institutions. This is particularly relevant to our franchise as an important

and large counterparty in equity,

fixed income and foreign exchange

markets, including related derivatives.

We routinely execute

a high volume of transactions, such as unsecured debt instruments, derivative transactions

and equity investments with counterparties and customers in the financial services industry,

including brokers

and dealers, commercial and investment banks, mutual and hedge funds, insurance

companies, institutional

clients, futures clearing merchants, swap dealers, and other institutions, resulting in large

periodic settlement

amounts, which may result in our having significant credit exposure

to one or more of such counterparties or

customers. As a result, we could face concentration

risk with respect to liabilities or amounts we expect to collect

from specific counterparties and customers. We

are exposed to increased counterparty risk as a result of recent

financial institution failures and weakness and will continue to be exposed to the risk of loss if counterparty

financial institutions fail or are otherwise unable to meet their obligations. A default by,

or even concerns about

the creditworthiness of, one or more of these counterparties

or customers or other financial services institutions

could therefore have an adverse

effect on our results or liquidity.

With respect to secured transactions, our credit risk may be exacerbated

when the collateral held by us cannot

be or is liquidated at prices not sufficient to recover the full amount of the loan or derivative

exposure due to us.

We also have exposure to

a number of financial institutions in the form of unsecured debt instruments,

derivative transactions and equity investments. For

example, we hold certain hybrid regulatory capital

instruments issued by financial institutions which permit the issuer to cancel coupon payments on the

occurrence of certain events or at their option. The EC has indicated that, in certain circumstances,

it may require

these financial institutions to cancel payment. If this were to happen, we expect that

such instruments may

experience ratings downgrades and/or a drop

in value and we may have to treat them as impaired,

which could

result in significant losses. There is no assurance that losses on, or impairments to the carrying value of,

these

assets would not materially and adversely affect our business, results or financial condition.

In addition, we are subject to the risk that our rights against third parties may not be enforceable

in all

circumstances. The deterioration or perceived deterioration

in the credit quality of third parties whose securities

or obligations we hold could result in losses and/ or adversely affect

our ability to rehypothecate or otherwise

use those securities or obligations for liquidity purposes. A significant downgrade in the credit ratings

of our

counterparties could also have a negative impact on our income and risk weighting, leading to increased

capital

requirements. While in many cases we are permitted to require

additional collateral from counterparties that

experience financial difficulty, disputes

may arise as to the amount of collateral we are entitled

to receive and

the value of pledged assets. Also in this case, our credit risk may also be exacerbated

when the collateral we hold

cannot be liquidated at prices sufficient to recover the full amount of the loan or derivative

exposure due to us,

which is most likely to occur during periods of illiquidity and depressed asset valuations, such as those

experienced during the financial crisis of 2008. The termination of contracts and the foreclosure

on collateral

may subject us to claims. Bankruptcies, downgrades and disputes with counterparties as to the valuation

collateral tend to increase in times of market

stress and illiquidity. Any of these developments

or losses could

materially and adversely affect our business, results, financial condition,

and/or prospects.

Ratings are important to our business for a number of reasons,

and a downgrade or a potential

downgrade in our credit ratings could have

an adverse impact on our results and net results.

Credit ratings represent the opinions of rating

agencies regarding an entity’s ability to repay

its indebtedness.

Our credit ratings are important to our ability to raise

capital and funding through the issuance of debt and to the

cost of such financing. In the event of a downgrade, the cost of issuing debt will increase, having an adverse

effect on our net results. Certain institutional investors

may also be obliged to withdraw their deposits from ING

following a downgrade, which could have an adverse

effect on our liquidity. They

can also have lower risk

appetite for our debt notes, leading to lower purchases of (newly issued) debt notes. We

have credit ratings from

S&P,

Moody’s Investor Service and Fitch Ratings. Each of the rating

agencies reviews its ratings and rating

methodologies on a recurring basis and may decide on a downgrade at any time.

As rating agencies continue to evaluate

the financial services industry, it is possible that rating agencies will

heighten the level of scrutiny that they apply to financial institutions, increase the frequency and scope of their

credit reviews, request additional information from

the companies that they rate and potentially adjust upward

the capital and other requirements employed in the rating agency models for maintenance

of certain ratings

levels. It is possible that the outcome of any such review of us would have additional adverse

ratings

consequences, which could have a material adverse effect

on our results and financial condition. We may need to

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take actions in response to changing standards

or capital requirements set by any of the rating

agencies, which

could cause our business and operations to suffer.

We cannot predict what additional actions rating agencies

may take, or what actions we may

take in response to the actions of rating agencies.

Furthermore, ING Bank’s assets are risk-weighted.

Downgrades of these assets could result in a higher risk-

weighting, which may result in higher capital requirements. This may impact net earnings and the return

capital, and may have an adverse impact on our competitive

position.

We may be exposed to business,

operational, regulatory,

reputational and other risks in

connection with climate change.

Climate change is an area of significant focus for governments

and regulators, investors

and ING’s customers,

and

developments with respect to climate change topics may expose

ING to significant risks. The perception of

climate change as a risk by civil society, shareholders,

governments and other stakeholders continues

to increase,

including in relation to the financial sector’s operations and strategy,

and international actions regulating or

restricting CO2 emissions, such as the Paris agreement, may also result in financial institutions coming

under

increased pressure from such stakeholders

regarding the management and disclosure of their climate risks and

related lending and investment activities. For further information

regarding the alignment of ING’s

lending

portfolio with its climate-related goals, see “Item 4. – Information

on the Company – Business Overview –

Responsible finance” below.

For a description of the physical risks to our business resulting from natural

disasters as a result of climate

change, see “–Operational risks, such as systems disruptions or failures,

breaches of security, cyber attacks,

human error,

changes in operational practices, inadequate controls

including in respect of third parties with

which we do business, natural disasters or outbreaks of communicable diseases may

adversely impact our

reputation, business and results” above.

An inability to retain or attract key

personnel may affect our business and results.

ING Group relies to a considerable extent on the quality of its senior management, such as members

of the

executive committee, and management

in the jurisdictions which are material to ING’s business and operations.

The success of ING Group’s operations is dependent,

among other things, on its ability to attract and retain highly

qualified personnel. Competition for key personnel in most

countries in which ING Group operates, and globally

for senior management, is intense. ING Group’s

ability to attract and retain key

personnel, in senior management

and in particular areas such as technology and operational management, client relationship management,

finance, risk and product development, is dependent on a number of factors, including prevailing

market

conditions and compensation packages offered by companies

competing for the same talent.

The (increasing) restrictions on remuneration, plus the public and political scrutiny especially in the Netherlands,

will continue to have an impact on existing ING Group remuneration

policies and individual remuneration

packages for personnel. For example,

under the EU’s amended Shareholder Rights Directive, known as ‘SRD II’,

which came into effect on June 10, 2019, ING is required to hold a shareholder (binding) vote on ING’s

Executive

Board remuneration policy and Supervisory Board remuneration policy at

least every four years. Furthermore the

shareholders have an advisory vote on ING’s

remuneration report annually.

This may restrict our ability to offer

competitive compensation compared with companies (financial and/or non-financial) that are

not subject to such

restrictions and it could adversely affect ING Group’s

ability to retain or attract key

personnel, which, in turn, may

affect our business and results.

We may incur further liabilities in respect of our defined benefit retirement

plans if the value of

plan assets is not sufficient to cover potential obligations,

including as a result of differences

between actual results and underlying actuarial assumptions and models.

ING Group companies operate various defined benefit retirement

plans covering the post-employment benefits

of a number of our employees. The liability recognised in our consolidated balance sheet in respect of our

defined benefit plans is the present value of the defined benefit obligations at

the balance sheet date, less the

fair value of each plan’s assets, together

with adjustments for unrecognised actuarial gains and losses and

unrecognised past service costs. We determine our defined

benefit plan obligations based on internal and

external actuarial models and calculations using the projected unit credit method. Inherent in these actuarial

models are assumptions, including discount rates, rates

of increase in future salary and benefit levels, mortality

rates and consumer price index. These assumptions are based on available

market data and are updated

annually. Nevertheless, the actuarial assumptions may

differ significantly from actual results due to changes in

market conditions, economic and mortality trends and other assumptions. Any changes in these assumptions

could have a significant impact on our present and future liabilities and costs associated

with our defined benefit

plans.

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Risks related to the Group’s

risk management practices

Risks relating to our use of quantitative models or

assumptions to model client behaviour for the

purposes of our market calculations may adversely

impact our reputation or results.

We use quantitative methods, systems

or approaches that apply statistical, economic financial, or mathematical

theories, techniques and assumptions to process input data into quantitative

estimates. Errors in the

development, implementation, use or interpretation

of such models, or from incomplete or incorrect data, can

lead to inaccurate, noncompliant or misinterpreted

model outputs, which may adversely impact our reputation

and results. In addition, we use assumptions in order to model client behaviour for the risk calculations in our

banking books. Assumptions are used to determine the interest rate

risk profile of savings and current accounts

and to estimate the embedded option risk in the mortgage and investment

portfolios. Assumptions based on

past client behaviour may not always be a reliable indicator

of future behaviour.

The realisation or use of

different assumptions to determine client behaviour

could have a material adverse effect

on the calculated risk

figures and, ultimately,

our future results or reputation. Furthermore, we may be subject to risks related

changes in the laws and regulations governing the risk management practices of financial institutions. For

further

information, see “Risks related to the regulation

and supervision of the Group – Changes in laws and/or

regulations governing financial services or financial institutions or the application of such laws and/or regulations

may increase our operating costs and limit our activities” above. As noted there,

regulation of the industries in

which we operates is becoming increasingly more extensive and complex,

while also attracting supervisory

scrutiny. Compliance failures

may lead to changes in the laws and regulations governing the risk management

practices and materially increase our operating costs.

We may be unable to manage our risks

successfully through derivatives.

We employ various economic hedging strategies

with the objective of mitigating the market risks that are

inherent in our business and operations. These risks include currency fluctuations, changes in the fair value

of our

investments, the impact of interest rates,

equity markets and credit spread changes, the occurrence of credit

defaults and changes in client behaviour.

We seek to control these risks by,

among other things, entering into a

number of derivative instruments, such as swaps, options, futures and forward

contracts, including, from time to

time, macro hedges for parts of our business, either directly as a counterparty or as a credit support provider to

affiliate counterparties. Developing an effective

strategy for dealing with these risks is complex, and no strategy

can completely insulate us from risks associated with those fluctuations. Our hedging strategies

also rely on

assumptions and projections regarding our assets, liabilities, general market

factors and the creditworthiness of

our counterparties that may prove to be incorrect

or prove to be inadequate. Accordingly,

our hedging activities

may not have the desired beneficial impact on our results or financial condition. Poorly designed strategies

improperly executed transactions could actually increase

our risks and losses. Hedging strategies involve

transaction costs and other costs, and if we terminate a hedging arrangement,

we may also be required to pay

additional costs, such as transaction fees or breakage costs. There

have been periods in the past, and it is likely

that there will be periods in the future, during which we have incurred or may incur losses on transactions,

possibly significant, after taking into account our hedging strategies.

Further, the nature

and timing of our

hedging transactions could actually increase our risk and losses. Hedging instruments we use to manage product

and other risks might not perform as intended or expected, which could result in higher (un)realised losses, such

as credit value adjustment risks or unexpected P&L effects,

and unanticipated cash needs to collateralise or settle

such transactions. Adverse market conditions can limit the availability

and increase the costs of hedging

instruments, and such costs may not be recovered in the pricing of the underlying products being hedged. In

addition, hedging counterparties may fail to perform their obligations,

resulting in unhedged exposures and

losses on positions that are not collateralised. As such, our hedging strategies

and the derivatives that we use or

may use may not adequately mitigate or offset

the risks they intend to cover,

and our hedging transactions may

result in losses.

Our hedging strategy additionally relies on the assumption that hedging counterparties remain able and willing to

provide the hedges required by our strategy.

Increased regulation, market shocks, worsening

market conditions

(whether due to the ongoing euro crisis or otherwise), and/or other factors that affect

or are perceived to affect

the financial condition, liquidity and creditworthiness of ING may reduce the ability and/or willingness of such

counterparties to engage in hedging contracts with us and/or

other parties, affecting our overall ability to hedge

our risks and adversely affecting our business, results and financial condition.

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Risks related to the Group’s

liquidity and financing activities

We depend on the capital and credit markets,

as well as customer deposits, to provide the

liquidity and capital required to fund our operations

and adverse conditions in the capital and

credit markets, or significant withdrawals

of customer deposits, may impact our liquidity,

borrowing and capital positions, as well as the cost of liquidity,

borrowings and capital.

Adverse capital market conditions have

in the past affected, and may in the future affect,

our cost of borrowed

funds and our ability to borrow on a secured and unsecured basis, thereby impacting our ability to support

and/or grow our businesses. Furthermore, although interest rates

are at or near historically low levels, since the

recent financial crisis, we have experienced increased funding costs due in part to the withdrawal

of perceived

government support of such institutions in the event of future financial crises. In addition, liquidity in the

financial markets has also been negatively impacted as market

participants and market practices and structures

adjust to new regulations.

We need liquidity to fund new and recurring business, to pay our operating expenses,

interest on our debt and

dividends on our capital stock, maintain our securities lending activities and replace certain maturing liabilities.

Without sufficient liquidity, we

will be forced to curtail our operations and our business will suffer.

The principal

sources of our funding include a variety of short-and long-term instruments, including deposit fund, repurchase

agreements, commercial paper,

medium- and long-term debt, subordinated debt securities, capital securities and

shareholders’ equity.

In addition, because we rely on customer deposits to fund our business and operations, the confidence of

customers in financial institutions may be tested in a manner that may

adversely impact our liquidity and capital

position. Consumer confidence in financial institutions may,

for example, decrease due to our or our competitors’

failure to communicate to customers

the terms of, and the benefits to customers

of, complex or high-fee

financial products. Reduced confidence could have an adverse

effect on our liquidity and capital position through

withdrawal of deposits, in addition to our revenues and results. Because a significant percentage

of our customer

deposit base is originated via Internet banking, a loss of customer confidence may result in a rapid withdrawal

deposits over the Internet.

In the event that our current resources do not satisfy our needs, we may

need to seek additional financing. The

availability of additional financing will depend on a variety of factors, such as market

conditions, the general

availability of credit, the volume of trading activities, the overall availability

of credit to the financial services

industry, our credit ratings

and credit capacity, as well as the possibility that

customers or lenders could develop

a negative perception of our long- or short-term financial prospects. Also see under the heading “Ratings are

important to our business for a number of reasons, and a downgrade or a potential downgrade

in our credit

ratings could have an adverse impact on our results and net

results”.

Similarly, our access to funds may be limited

if regulatory authorities or rating agencies take

negative actions against us. If our internal sources of liquidity

prove to be insufficient, there is a risk that we may not be able to successfully obtain

additional financing on

favourable terms, or at all. Any actions we

might take to access financing may,

in turn, cause rating agencies to

re-evaluate our ratings.

Disruptions, uncertainty or volatility in the capital and credit markets

may also limit our access to capital. Such

market conditions may in the future limit our ability to raise additional capital

to support business growth, or to

counterbalance the consequences of losses or increased regulatory capital and rating

agency capital

requirements. This could force us to (i) delay raising

capital, (ii) reduce, cancel or postpone payment of dividends

on our shares, (iii) reduce, cancel or postpone interest payments

on our other securities, (iv) issue capital of

different types or under different

terms than we would otherwise, or (v) incur a higher cost of capital than in a

more stable market environment.

This would have the potential to decrease both our profitability and our

financial flexibility. Our results, financial condition,

cash flows, regulatory capital and rating agency capital

position could be materially adversely affected

by disruptions in the financial markets.

Furthermore, regulatory liquidity requirements in certain jurisdictions in which we operate

are remain stringent,

undermining our efforts to maintain centralised management

of our liquidity. These developments may cause

trapped pools of liquidity and capital, resulting in inefficiencies in the cost of managing our liquidity and solvency,

and hinder our efforts to integrate

our balance sheet. An example of such trapped liquidity includes our

operations in Germany where German regulations impose separate

liquidity requirements that restrict ING’s

ability to move a liquidity surplus out of the German subsidiary.

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As a holding company,

ING Groep N.V.

is dependent for liquidity on payments from its

subsidiaries, many of which are subject to regulatory and other restrictions

on their ability to

transact with affiliates.

ING Groep N.V.

is a holding company and, therefore, depends on dividends, distributions and other payments

from its subsidiaries to fund dividend payments to its shareholders and to

fund all payments on its obligations,

including debt service obligations.

ING Groep N.V.’s

ability to obtain funds to meet its obligations depends on legal and regulatory restrictions

applicable to ING Groep N.V.’s

subsidiaries. Many of ING Groep N.V.’s

direct and indirect subsidiaries, including

certain subsidiaries of ING Bank N.V.,

may be subject to laws that restrict dividend payments, as well as

requirements with respect to capital and liquidity levels. For example,

certain local governments and regulators

have taken steps and may

take further steps to “ring fence” or impose minimum internal

total loss-absorbing

capacity on the local affiliates of a foreign financial institution in order to protect

clients and creditors of such

affiliates in the event of financial difficulties involving such affiliates

or the broader banking group. Increased

local regulation and supervision have therefore limited and may

in the future further limit the ability to move

capital and liquidity among affiliated entities and between ING Groep N.V.

and its direct and indirect subsidiaries,

limit the flexibility to structure intercompany and

external activities of ING as otherwise deemed most

operationally efficient, and increase in the overall level

of capital and liquidity required by ING on a consolidated

basis.

Lower earnings of a local entity may also reduce the ability of such local entity to make

dividends and

distributions to ING Groep N.V.

Other restrictions, such as restrictions on payments from subsidiaries or

limitations on the use of funds in client accounts, may also apply to distributions to ING Groep N.V.

from its

subsidiaries.

ING Groep N.V.

has also in the past and may in the future continue to guarantee the payment

obligations of

some of its subsidiaries, including ING Bank N.V.

Any such guarantees may require

ING Groep N.V.

to provide

substantial funds or assets to its subsidiaries or the creditors or counterparties

of these subsidiaries at a time

when the guaranteed subsidiary is in need of liquidity to fund their own obligations.

Finally, ING Groep N.V.,

as the resolution entity of ING, has an obligation to remove impediments to resolution

and to improve resolvability.

Regulatory authorities have required and may

continue to require ING to increase

capital or liquidity levels at the level of the resolution entity or at particular subsidiaries. This may result in,

among other things, the issuance of additional long-term debt issuance at the level of ING Groep N.V.

particular subsidiaries.

Additional risks relating to ownership of ING shares

Holders of ING shares may experience dilution of their holdings.

ING’s AT1

Securities may, under certain

circumstances, convert into equity securities, and such conversion

would

dilute the ownership interests of existing holders

of ING shares and such dilution could be substantial.

Additionally, any conversion,

or the anticipation of the possibility of a conversion, could depress the market

price

of ING shares. Furthermore, we may undertake future equity offerings

with or without subscription rights. In case

of equity offerings with subscription rights, holders of ING shares in certain jurisdictions, however,

may not be

entitled to exercise such rights unless the rights and the related

shares are registered or qualified for sale under

the relevant legislation or regulatory framework.

Holders of ING shares in these jurisdictions may suffer dilution

of their shareholding should they not be permitted to, or otherwise chose not to, participate

in future equity

offerings with subscription rights.

Because we are incorporated under the laws of

the Netherlands and many of the members of

our Supervisory and Executive Board and our officers reside outside of the United States,

it may

be difficult to enforce judgments against

ING or the members of our Supervisory and Executive

Boards or our officers.

Most of our Supervisory Board members, our Executive Board members and some of the experts named in this

Annual Report, as well as many of our officers are persons who are not residents

of the United States, and most

of our and their assets are located outside the United States. As a result, investors

may not be able to serve

process on those persons within the United States or to enforce

in the United States judgments obtained in US

courts against us or those persons based on the civil liability provisions of the US securities laws.

Investors also may not be able to enforce

judgments of US courts under the US federal securities laws in courts

outside the United States, including the Netherlands. The United States and the Netherlands do not currently

have a treaty providing for the reciprocal

recognition and enforcement of judgments (other than arbitration

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ING Group Annual Report 2020 on Form 20-F

awards) in civil and commercial matters.

Therefore, a final judgment for the payment of money rendered

by any

federal or state court in the United

States based on civil liability,

whether or not predicated solely upon the U.S.

federal securities laws, would not be enforceable

in the Netherlands unless the underlying claim is re-litigated

before a Dutch court. However,

under current practice, the courts of the Netherlands may be expected to render

a judgment in accordance with the judgment of the relevant U.S. court, provided

that such judgment (i) is a final

judgment and has been rendered by a court which has established its jurisdiction on the basis of internationally

accepted grounds of jurisdictions, (ii) has not been rendered in violation of elementary principles of fair trial, (iii)

is not contrary to the public policy of the Netherlands, and (iv) is not incompatible with (a) a prior judgment of a

Netherlands court rendered in a dispute between the same parties, or (b) a prior judgment of a foreign court

rendered in a dispute between the same parties, concerning the same subject matter and based on the same

cause of action, provided that such prior judgment is not capable of being recognized in the Netherlands. It is

uncertain whether this practice extends to default judgments

as well.

Based on the foregoing, there can be no assurance that U.S. investors

will be able to enforce against us or

members of our board of directors, officers or certain experts

named herein who are

residents of the

Netherlands or countries other than the United States any judgments obtained

in U.S. courts in civil and

commercial matters, including judgments under the U.S. federal

securities laws.

In addition, there is doubt as to whether a Dutch court would impose civil liability on us, the members of our

board of directors, our officers or certain experts

named herein in an original action predicated solely upon the

U.S. federal securities laws brought in a court

of competent jurisdiction in the Netherlands against us or such

members, officers or experts, respectively.

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Item 4.

Information on the Company

History and development of the company

General

ING Groep N.V.

was established as a Naamloze Vennootschap

(a Dutch public limited liability company) on March

4, 1991. ING Groep N.V.

is incorporated under the laws of the Netherlands.

The corporate site of ING, www.ing.com,

provides news, investor relations

and general information about the

company.

ING is required to file certain documents and information with the United States

Securities and Exchange

Commission (SEC). These filings relate primarily to periodic reporting requirements applicable to

issuers of

securities, as well as to beneficial ownership reporting requirements as a holder of securities. The most common

filings we submit to the SEC are Forms 6-K and 20-F (periodic reporting requirements) and Schedules 13D and

13G (beneficial ownership requirements). The SEC maintains an internet

site that contains reports, proxy and

information statements, and other information

regarding issuers that file electronically with the SEC at

http://www.sec.gov.

ING’s electronic filings are available

on the SEC’s internet site under CIK ID 0001039765 (ING

Groep N.V.).

The official address of ING Group is:

ING Groep N.V.

Bijlmerdreef 106

1102 CT

Amsterdam

P.O.

Box 1800,

1000 BV Amsterdam

The Netherlands

Telephone +31 20 563 9111

The name and address of ING Group’s agent for

service of process in the United States in connection with ING’s

registration statement

on Form F-3 is:

ING Financial Holdings Corporation

1133 Avenue of the Americas

New York, NY 10036

United States of America

Telephone +1 646 424 6000

Changes in the composition of the Group

For information on changes in the composition of the Group, reference

is made to Note 46 ‘Consolidated

companies and businesses acquired and divested’.

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Our strategy

ING’s Think Forward

strategy is as relevant

as ever.

With our data-driven digital

and mobile-first approach we’re

continuing to empower people to stay

a step

ahead in life and in business – also at a time of social and economic disruption.

The global coronavirus pandemic has illustrated

just how digital society has

become, reinforcing trends

like the shift to mobile banking and contactless

payments.

Delivering on our strategy is about living up to our customer promise to be clear and easy,

anytime, anywhere,

empowering and keep getting better

Digitalisation remains central to this and we’re adapting

our processes and

service models to make banking even safer,

more personal, easier and smarter.

Combined with mastering data,

it’s how we can stand out as a bank that truly knows its customers

and anticipates their evolving needs, finding

innovative ways to add value

both within and beyond banking.

We’re doing all of this while striving to live up to the highest

possible standards of integrity.

Being a safe, secure

and compliant bank remains a top priority for ING. Our Orange Code of values and behaviours

places integrity

above all else.

Factors influencing our business in 2020

The spread of Covid-19, and the global measures to contain it, affected

ING in a number of ways in 2020,

impacting our customers, our employees and our communities. However,

it was not the only factor influencing

our business. The negative interest rate

environment in the eurozone and low interest

rates elsewhere, have

posed a significant challenge to banks’ business models since 2016, eroding margins on customer deposits and

putting pressure on net interest income. Until 2020, we

were able to counter the effects of this mainly through

profitable lending growth and a presence in non-eurozone countries.

However,

the pandemic made these levers less effective in 2020, resulting in a decrease of net interest

income,

as loan demand weakened in a number of markets due to strong

direct government support, while the inflow of

customer deposits accelerated and interest

rates in non-eurozone countries significantly

reduced. In response to

the pressure on net interest income we introduced

negative interest rates

on deposits for retail customers in

some markets and amplified our focus on income diversification through

fee income growth, particularly in retail

investment products.

That said, the impact of the global pandemic is still reverberating through societies worldwide. The second wave

that surged through Europe and the US in the autumn continued to pile pressure on consumers,

businesses,

communities and economies. It has fundamentally changed the way people work, travel,

shop and socialise and

the expected economic consequences will be felt for some time yet. We

are considering various post-coronavirus

scenarios focused on the next two to five years that take

account of the severity of the economic downturn and

level of global cooperation in the recovery period.

Universal digital bank

The coronavirus crisis has accelerated the urgency of implementing end-to-end digitalisation,

both to meet the

growing demand for mobile banking and to enhance operational excellence. Operational

excellence in particular

helps to ensure that our customers are able to do their daily banking without disruption, even during global

lockdowns, and makes it possible for employees to

work safely and securely from home.

Now we’re taking steps to deliver

on our strategic priorities, not least to keep

pace with society’s accelerated

adoption of digital resources during the coronavirus. We’ve

been working on transforming our organisation to

become a mobile-first digital platform, offering

all of our 39.3 million customers a harmonised customer

experience everywhere. But there’s

still work to do to become the leading data-driven digital bank we aspire to

be.

Building on what we’ve learnt and achieved over the past five years,

we took steps in 2020 to further consolidate

our business and reinforce alignment. This includes uniting all our Retail operations

– including the Business

Banking segment serving small and medium-sized businesses and mid-corporate clients – under one global

management team with one consistent unified approach.

Their focus will be on operational excellence through

increased digitalisation,

using our technology foundation globally – this includes shared data lakes, cloud and

modular IT building blocks – and rolling out global digital product offerings.

At the same time, the challenging external environment reconfirm

the importance of scrutinising costs and

looking for new ways to grow our fee

income and diversify our revenues in areas beyond traditional banking.

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ING Group Annual Report 2020 on Form 20-F

We need to be flexible in dealing with these challenges, and with changing customer behaviour,

continually

weigh up benefits versus costs, apply our learnings and focus our activities. For Wholesale Banking this means

deepening our relationship with our core clients, reducing our geographic footprint

in Asia and closing our offices

in South America. In Retail Banking it means stopping the Maggie transformation programme

(to standardise the

customer experience and product offering in four

Challengers Markets) and instead focusing on using and reusing

existing apps and modular components to drive scaling and speed of delivery.

Recognising the need to move even faster if we

want to stay a step ahead of the changes and evolutions

in the

world, we announced in 2020 that we are combining all our innovation activities into a dedicated

business area

called ING Neo. This will help sharpen our focus and create more impact, ultimately deepening our relationships

with our customers as their primary bank for financial and other needs.

The introduction in 2020 of our first global tagline ‘do your thing’ moved the ING brand another step

closer to

looking, sounding and feeling the same everywhere. It articulates ING’s purpose. We

want to make banking

frictionless, removing barriers to progress and giving people confidence in their ability to move

forward.

Think Forward

ING’s purpose is empowering people to stay

a step ahead in life and in business. Our Think Forward strategy

promises customers we’ll make banking clear and easy,

anytime anywhere, empower them to make informed

financial decisions and keep getting better.

Where our purpose guides us, the strategic priorities set out in our

Think Forward strategy help us to focus

on the elements we need to be successful.

These strategic priorities are:

earning the primary relationship, mastering data, being innovative to serve

changing customer needs, and developing new services and business models beyond banking. We achieve this by

simplifying and standardising our products and processes, being operationally excellent,

enhancing our

performance culture and expanding our lending capabilities. These are the strategic

enablers for executing on

our strategy.

See the graphics in this chapter for more information about our strategic

priorities and enablers.

Platform approach

While many businesses struggled in 2020 to survive global lockdowns, many Big Tech

companies thrived on

society’s growing reliance on technology and the online economy.

ING’s competitive landscape is also

increasingly shaped by these companies, which offer an engaging digital experience on an open platform

that

meets a range of needs in one go-to digital ecosystem.

We believe platform providers

are all about customer experience. They use data to pinpoint what customers

need and partner with third parties to ensure there is always a fitting product

or service to meet this. Platforms

are empowering. To

remain relevant, ING has to be where our (future)

customers are, on the platforms they’re

on, while maintaining the highest possible standard of integrity.

In an age of disruption and changing customer expectations we have to keep

adapting our banking services to

become clearer,

easier and more accessible while empowering our growing global customer base to stay

a step

ahead in life and in business. Open banking creates opportunities for ING to

add value for customers by connecting to the products

and services of others, both within and beyond banking.

When it comes to platforms, we are developing our own solutions. We’re

building digital channels on top of our

technology platform,

like ING’s mobile OneApp, which is used by customers

in the Netherlands, Belgium and

Germany. We’re

investing in independent initiatives such as Spanish finance app Fintonic, and we’re

connecting

to third-party platforms offering relevant

products and services. Among these are initiatives that have evolved

into stand-alone platforms such as smart money app Yolt

and corporate multibank platform Cobase.

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ING Group Annual Report 2020 on Form 20-F

Touchpoint platform

Supporting our ambition to be the leading data-driven digital bank, we’re using a modular technology foundation

to create business-wide propositions that are globally scalable. This includes an open technology platform

called

Touchpoint. The Touchpoint

platform provides ready-made solutions, modular components and reusable

services the business and IT can use to build and run scalable business services and global value propositions.

They can also distribute these to a large third-party ecosystem.

In this way we can share innovations,

use and re-

use standardised components, and bring new products to customers

faster and in more countries.

Through the Touchpoint

platform,

new and existing ING business initiatives have access to 25.2 million customers

(around 65 percent of our customer base) in an internal and third-party ecosystem.

It is enabling scalable

business solutions that aim to harmonise the customer experience. And it connects ING to third parties through

common architecture and shared application programming

interfaces (APIs). The Amazon partnership was made

possible by using Touchpoint

to integrate fintech Lendico’s

lending platform for small and medium-sized

businesses with ING in Germany.

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ING Group Annual Report 2020 on Form 20-F

Strategic priorities

Earning the

primary

relationship

By this we mean increasing the number of customers who have multiple ING products (including a current

account into which a recurring income, such as a salary,

is paid) or Wholesale Banking clients with anchor

products such as lending and transaction services. It’s closely linked to customer experience

and satisfaction:

the more satisfied customers are, the more likely

they’ll choose ING for additional products and services. Over

the past five years we’ve consistently

increased the number of primary customers.

Material topics:

financial performance, usability

and accessibility of our products

Using our

advanced data

capabilities to

understand our

customers

better

Having the right data at our fingertips will enable us to achieve many

of our strategic priorities. We use data

personalise our customer interactions and gain insights to deliver

a differentiating experience. It also helps us

make sound business decisions and drives innovation. At the same time, we want

to protect people’s data

and

their privacy and are committed to handling data safely

and being open about how we use it.

Material topics:

customer privacy,

culture, ethics

and integrity, digitalisation

and interconnectivity,

cyber resilience

Increase the pace

of innovation to

serve changing

customer needs

New technologies enable new ways to do things and disrupt the status quo. To

stay relevant it’s

essential that

we evolve too. This means coming up with disruptive products, services and experiences that support our

strategic ambitions and keep ING a step ahead.

Material topics:

innovation, usability and

accessibility of our products, digitalisation and

interconnectivity

Thinking beyond

traditional banking

to develop new

services and business

models

Persistent low/negative

interest rates offer

savers little incentive, challenging our traditional business model.

Digital platforms are an opportunity to become relevant

to customers by providing new products and services,

also in areas beyond banking, which offer new revenue streams for

ING and provide a better customer

experience.

Material topics:

innovation, digitalisation and

interconnectivity,

customer privacy,

culture, ethics

and integrity

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ING Group Annual Report 2020 on Form 20-F

Mastering data

Data is the lifeblood of organisations like

ING. We use data to personalise our customer interactions

and gain

insights to deliver a differentiating experience. It helps us make

better business decisions, while being mindful of

using our data responsibly and in line with people’s expectations

We rely on data-driven models to manage our

capital and risk-weighted assets and improve

risk management. Data on customers

and their transactions is also

essential in the fight against money laundering and other financial economic crime. Not least, data drives

innovation. It is the main ingredient for artificial intelligence and robotics

solutions.

However,

to make data meaningful it needs to be sorted, harmonised and put into context.

The accuracy of our

models relies heavily on the quality of the data that’s used to develop them. It’s

essential to have one common

approach for using and storing data. ING’s

data management strategy includes standardised

data definitions (ING

Esperanto) and data models (Esperanto Warehouse

Model), which contribute to the availability,

quality,

integrity, usability,

control and governance of our data.

Ethics and privacy

We acknowledge the need to protect people’s

privacy and are committed to handling our data safely

and being

honest about how it’s used. This means we inform our customers

and employees about how we use their data

and respect their privacy when processing it.

Analytics and building our data capabilities

Becoming a truly data-driven organisation requires stepping

up our analytics capabilities. This means promoting

data fluency among our employees and strengthening our analytics delivery.

ING’s Analytics Unit is responsible

for coordinating these activities globally and aligning them with our business strategy,

as well as building one

analytics and data community. To

enhance our data science capabilities – which we have identified as one of the

‘Big 6’ capabilities ING needs to succeed –

we have an Analytics Academy,

we’ve added an analytics track to our

International Talent

Programme for graduates, and we

collaborate with academic institutions like Dutch

Delft

University of Technology

(TU Delft) on artificial intelligence research.

Our analytics delivery is focused on solutions in nine areas: customer interactions, customer dialogue, risk and

pricing, financial crime and regulatory technology (Regtech), intelligent

operations, innovation and beyond

banking, people and finance, and Wholesale Banking. In 2020, we further accelerated our advanced analytics

capabilities and delivered solutions to different domains.

For example, in the Regtech space, we’re

using analytics solutions to identify potentially risky shell companies in

corresponding networks. In the retail domain, we developed and implemented

machine learning interest rate

optimisation models for better-priced mortgages in Germany,

Italy and the Netherlands. In risk management we

built more topic detection models for the early warning signals (EWS) monitoring tool, which should ultimately

help reduce risk costs. We’re also using analytics to develop acceptance

models for consumer and business

lending in Austria,

Belgium, the Netherlands and Spain, which help lower risk costs and increase acceptance

rates. New collections models for the Netherlands and Italy help us identify clients in financial difficulty and that

need our support at an early stage.

In addition, we stepped up our experiments and experience with chatbots and are creat

ing value and scale. The

benefits for customers include 24/7 contact, fewer

human errors and a simpler user experience. In the

Philippines, we launched a virtual assistant that directs

customers to their needed answers. Similar initiatives

have been or will be rolled out to other countries. In Germany,

ING’s virtual assistant ING answered

7.3 million

customer questions in 2020, recognising 94 percent of queries on current accounts

(the best chatbot out of 22

tested in various industry sectors),

while our Turkish chatbot INGo not only answered customers

questions, but

also approved 547.6 million lira worth of personal loans (89 million lira in 2019).

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ING Group Annual Report 2020 on Form 20-F

Innovating to stay a step ahead

Innovation at ING is about creating a differentiating

experience for customers. As such, it’s at

the heart of our

Think Forward strategy.

We rely on innovation to remain relevant

to our customers and live up to our purpose.

Developing truly disruptive products, services and experiences is also a prerequisite for realising our

platform

ambitions and moving beyond banking.

So far,

our innovation focus has allowed us to turn great ideas into products

and services that customers really

need. Smart money app Yolt now has more than 1.6

million registered users.

Blockchain solutions in trade

finance are helping to make trades faster

and simpler, for

example by reducing the processing time for letters

credit from around 10 days to under 24 hours.

When the coronavirus crisis first hit, our focus shifted towards adjusting

our operations to accommodate the

new, more

digital environment. Radical innovation moved

down the priority list and certain projects were

shelved: for example,

an initiative to digitalise aircraft financing. Other initiatives benefitted

from the growing

demand for digital solutions, such as the trade finance tools of our co-owned blockchain-based software

company Komgo.

With the creation of ING Neo we’re aiming to increase the speed and impact of our innovation by bringing

together initiatives in Wholesale Banking, Retail Banking (platforms and beyond banking activities), the Chief

Innovation Office and our venture capital vehicle, ING Ventures.

ING was recognised by Global Finance magazine as the most innovative bank in Western

Europe at its Innovators

2020 awards. Our home-grown innovations in cash management

(Zero Knowledge Proof Notary on Corda), the

corporate finance category (CoorpID) and payments

(FINN Banking of Things) also won individual awards.

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ING Group Annual Report 2020 on Form 20-F

How we innovate

Innovative ideas come from inside and outside ING. All our employees are encouraged

to think creatively and

come up with ways of doing things faster,

better and more efficiently.

We stimulate their ideas through our bank-

wide

Innovation Bootcamp

and local innovation ambassadors. For Innovation Bootcamp

2020, we received 444

ideas in four areas: how to disrupt lending before others do; empowering

customers to strengthen their financial

health; delivering a unique digital customer experience; and creating a world-class employee experience.

The

winning idea was ImpactING, which aims to make it easy for customers

to have a positive impact on the planet

via a sustainable bank account that allows them to contribute to

a good cause with every transaction.

In November,

we hosted the first Innovation Summit for all employees.

The three-day digital event explored

ING’s impact on the lives of customers

and employees, shed light on global digital trends and showcased our

latest innovations. It was streamed to

over 30 ING countries and reached approximately 1,500 unique users.

ING’s customised innovation

methodology, PACE

combines lean start-up, design thinking and agile scrum. Its key

feature is customer validation. This ensures we

develop only what customers really want. More

than 10,000

employees have been trained in PACE

to date.

In 2020, the

ING Innovation Fund

allocated €25 million to accelerate innovation across

the bank. Funding is

available to any employee who wants to

turn a breakthrough idea into reality.

External collaboration

Nobody knows what the future looks like or the technologies that may emerge

We recognise we

don’t have all the skills and knowledge in-house and we’re open to investing,

partnering and building with others.

ING Ventures

is our €300 million fund investing in early-stage companies. It targets

disruptive technologies that

ensures customers and clients get access to best-in-class services. It also helps entrepreneurs

with hands-on

support, know-how and access to ING’s distribution network.

We currently have 34 investments,

including

WeLab (automated consumer loans in China and Hong Kong), Fintonic (Spanish finance app), Cobase (multi-

banking platform for corporate

clients), Ascent (regulatory compliance platform) and Axyon (AI-powered

asset

manager).

ING partners with those who look at banking from a different perspective.

Companies like Scalable Capital in

Germany, a robo-advisor,

which attracted a billion euros in assets under management in its first

2.5 years. Or

Eigen, a natural language processing fintech that offers

ING a strategic capability in the intelligent operations

domain. Deployed in use cases across retail and wholesale banking, Eigen is contributing to ING’s

digital

transformation, creating tangible value

for customers and employees by applying machine learning in areas such

as corporate lending and SME banking.

Currently, ING has more

than 200 partnerships.

Not all our collaborations lead to new products or services,

however,

and we’ve ended over 110 so far,

mostly after unsuccessful or unsatisfactory proofs of concept

In November 2020, in light of the impact of Covid-19 on the economy,

which required us to reprioritise and

reassess our programmes, we decided to stop our activities for

Cumulus Park Studios

. Part of the Cumulus Park

innovation district in Amsterdam,

where several ING buildings are located, Cumulus Park Studios is a

collaborative initiative with local government

and educational institutions to drive innovation and co-creation

around the themes of urbanisation and digital identity.

We remain committed to further developing

the

innovation district and will continue to collaborate

with our district partners on a lower ambition level.

ING Labs

is our incubator for potential scale-ups. Here we work with external

experts, combining corporate

innovation and entrepreneurial experience. We

believe this contributes to a higher success rate and greater

impact than either could achieve alone. We have four Labs worldwide,

each with its own specific value space that

matches local expertise and ecosystems.

These are trade (Singapore), property,

real estate and regulatory

processes (London), creating minimum viable companies that are ready to scale (Amsterdam)

and proofs

concept with fintechs to bring new tech solutions to market faster

(Brussels, formerly Fintech Village).

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ING Group Annual Report 2020 on Form 20-F

Strategic enablers

Simplify and streamline

Standardised products, systems and processes, shared

services, one IT infrastructure and one Way of Working

lay the

foundation for the superior digital experience we strive

to deliver.

We believe this allows us to respond more quickly to

changing customer needs and low-cost competitors by becoming

more cost-effective, cost

-efficient and agile, and by

bringing new products and services to market faster.

Material topics:

usability and accessibility of our products

Operational excellence

ING promises customers we’ll keep getting

better.

This includes accelerating the digitalisation of end-to-end processes for a

frictionless customer experience and greater efficiency.

It’s also about ensuring safe and secure operations, stable

systems and platforms and the highest standards

of data security.

Material topics:

IT systems and platforms, cyber resilience

Performance culture

Delivering a differentiating customer experience

requires engaged employees who are motivated

to go the extra mile.

That’s why we strive to create

a great employee experience and develop great leaders who can enhance performance

and

inspire our people to deliver on our strategy.

Diversity and inclusion contribute to this – people perform better

when they

are free to be themselves. ING does not tolerate discrimination in any

form. We are guided in everything we do by the

values and behaviours in our Orange Code and global Code of Conduct.

Material topics:

culture,

ethics and integrity

Lending capabilities

We are seeking opportunities to broaden and diversify our retail

lending capabilities in the Business Banking and consumer

lending segments. In Wholesale Banking we continue to build on our lending capabilities in our markets,

combined with our

sector lending franchises and product capabilities, to build primary relationships to be able to diversity

our income by

generating more fees. ING is considered a pioneer in sustainable

finance, having introduced the first sustainability-linked

loan and a made-to-measure sustainability improvement loan.

Material topics:

financial performance, climate resilience

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ING Group Annual Report 2020 on Form 20-F

Transformation

To deliver a differentiating

customer experience globally we are streamlining our products and processes,

enhancing operational excellence and harmonising our customer engagement

platforms, supported by a global

technology foundation.

This foundation includes shared data lakes, cloud solutions and modular IT building

blocks. It’s also about monitoring and executing regulatory

programmes globally that aim to ensure ING is a safe,

secure and compliant bank.

To accelerate

the execution of our Think Forward journey,

we launched a series of transformation programmes in

2016 to unite similar businesses and bring us closer to one mobile-first digital platform offering

one ING

experience everywhere. These included:

•

Unite be+nl

to combine the respective strengths of the Netherlands and Belgium.

•

Maggie

(formerly Model Bank) to standardise the customer experience and product

offering in four

Challengers markets - Czech Republic,

France, Italy and Spain.

•

Welcome

to digitalise ING in Germany,

which was completed in 2019.

•

WTOM

to optimise,

digitalise and standardise our Wholesale Banking offering in all countries.

Unite be+nl involved,

among other things, the large-scale integration of 600,000 Record

Bank customers in

Belgium in 2018, and the replacement of many existing IT systems

with one digital platform. Integrating the back-

end systems turned out to be more complicated.

Yet despite the challenges and adjustments

to the programme

in response to changing circumstances,

all our Belgian retail customers now use the same internet banking

environment as the Netherlands (OneWeb) and 90 percent have

migrated to the mobile OneApp used in the

Netherlands and Germany. Unite be+nl runs until 1H

2021.

Given the coronavirus-related economic headwinds and our learnings from the

complexities and costs of cross-

border systems and product integration,

we decided to refocus our activities in 2020 to ensure faster

customer

delivery and a continuously improving end-to-end digital customer experience.

This underpinned our decision in 2020 to stop Maggie as a programme.

Launched in 2016 to integrate our

product offering and provide a standardised

easy, personal

and smart digital experience for customers in four

Challengers markets, Maggie delivered various customer

experience building blocks and sales and services

journeys.

To further develop

our universal digital bank, we’ll focus instead on using our global technology foundation,

reusing already developed mobile app components,

and rolling out global digital product offerings in the areas of

insurance, investments and consumer lending. When identifying areas to build cross-border

capabilities we’ll

weigh up impact versus complexity,

always with the aim of increasing scalability and delivery speed. In this way

we only need to develop once for multiple countries and can create a sustainable

competitive advantage,

accelerating customer engagement and business impact. Updating legacy

IT systems with new technology

standards and global solutions will also contribute to greater

efficiency as we move towards becoming a global

digital bank.

The creation in 2020 of one global retail management team was the next step

in our journey to unify and

harmonise our retail approach in all our markets. This will further reinforce

alignment, improve prioritisation and

drive a consistent retail strategy

that aims to accelerate digitalisation,

use our global technology foundation to

enhance operational efficiency and excellence, and roll out global digital

product offerings in areas such as

insurance, investment and consumer lending.

The Wholesale Target

Operating Model (WTOM) programme has come to

a natural conclusion as it achieved

cost, risk and income benefits for the Wholesale Banking franchise globally,

the result of extensive work over the

last years to replace legacy systems,

applications with target solutions, and create a range

of shared operational

services. We have now decided to end WTOM and commence with digitalisation-orientated

programmes in our

Transaction Services, Lending and Financial Markets

businesses.

Laying the foundation

Building a universal digital bank requires a strong foundation

that’s the same everywhere: the

same approach to data, the same processes, same systems

and infrastructure and the same way

of working.

At the heart of this is our IT strategy.

ING is building a technology platform to facilitate our journey from a

traditional bank to a data-driven digital bank. It is designed to create

speed, scale and security as well as cost

efficiency through programmes like

ING Private Cloud, Touchpoint,

the data lake foundation and OnePipeline.

This last programme supports the engineering journey from idea to working code that underlies our digital

services and can easily be reused by other engineers worldwide. We continuously adjust and improve

IT projects

and programmes based on new insights, lessons learnt and the impact of developments such as the coronavirus.

For example, at the start of the outbreak we had

to increase our network capacity by 365 percent to facilitate

the

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ING Group Annual Report 2020 on Form 20-F

large numbers of users connecting

from home: daily remote connections have grown by 285 percent

since

March.

We changed the top structure of the Tech

organisation in January 2021, to better align with ING’s

digital and

data-driven ambitions. This has brought all the assets belonging to the banking technology platform under one

senior management line, helping to further the consumption and delivery of the features of the banking

technology platform and improve impact.

Related to this, the

ING Private Cloud

(IPC) is the target platform standardising our IT infrastructure.

It’s where

we store and process data and IT services such as our mobile phone apps to give customers

a consistent

experience in a secure and reliable way.

Unlike traditional infrastructure,

cloud computing enables pay-as-you-go

usage, elasticity and full management by the user.

To keep

up with global usage, scalability, availability

and

delivery speed, ING is adding public cloud computing to our infrastructure offering. By end-2020, IPC was

used in

15 countries.

Around a quarter of global infrastructure now runs on IPC, up from 15 percent

at the end of 2019.

Data lakes

serve as digital repositories for all the internal and external data

we collect, making it easier to share it

across the company.

Having one ‘home’ for data is in line with our strategy of simplifying our banking systems.

Aggregating our data allows us to exchange

information and knowledge with each other more easily.

To enable

this data exchange we’ve created

a universal data language called

ING Esperanto

. Translating local data

of all ING

entities is a significant challenge as it requires both subject matter expertise of local businesses and regulations

and knowledge of ING Esperanto to be able to create and benefit from

aggregated data in a governed way.

ING Business Shared Services BV (IBSS) is a fully-owned service company employing around 10 percent of ING

colleagues globally. Its

shared service centres

in Bratislava, Manila, Katowice,

Warsaw and Bucharest contribute

to ING’s digital transformation

and cross-border scalability by centralising operational and IT support tasks

areas such as global data management, Tech

services, non-financial risk and compliance, KYC, data analytics and

modelling.

Recognising the need for a strong engineering culture to achieve

our Think Forward ambitions, we strive to

develop and grow a global workforce of highly skilled engineers. We

run global performance days, where we

assess and calibrate engineers based on one engineering profile.

The ING Tech Academy

keeps engineers

updated on the latest technology.

We are pursuing initiatives to improve

diversity in our teams.

These include

the ING Women in Engineering days and the Sparks community at ING in Australia

which aims to inspire and

empower women in technology.

ING’s one Way

of Working (WoW) is based on agile, purpose-driven teams and allows us to

respond quickly to

changing customer demands and feedback. We’ve implemented

ING’s WoW

in all retail countries as well as in

Wholesale Banking and in many of our business support activities. Uniting so many different cultures requires

behavioural shift, guided by our Orange Code, and is supported by WoW ambassadors,

bootcamps and training

programmes. The coronavirus pandemic has made it necessary to adapt to new ways

of working and

collaborating remotely.

Government measures to curb the spread of Covid-19 in ING countries required us to

adapt quickly to extended

remote working. This accelerated certain IT programmes,

such as the roll-out of cloud-based tools, enabling

online collaboration and meetings. Remote working brings certain increased

operational risks with respect to

information security,

data protection, the availability of key

systems and infrastructure

integrity. In 2020, ING

continued to focus strongly on managing exposure to

these risks and took steps to increase the efficiency and

effectiveness of our IT infrastructure to

ensure the continuity of our business from outside the office.

We also have preventative

measures in place that continuously test our resilience against cyberattacks

and

attempts to gain unauthorised access to our systems.

These include a dedicated cybercrime expertise and

response team and ‘ethical’ hackers.

When and how our employees return to the office remains hard to predict and largely

depends on the situation

in each country. When it is safe

to do so, there are rotation schemes to allow a controlled

return to the office.

We will also pilot global principles that will guide our future way of working in the post-coronavirus

world. These

are based on feedback from employees and aim to balance the advantages

of working from home and working

from the office. We’re taking

a step-by-step approach that

provides a degree of flexibility for local

implementation and respects local labour laws.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

B. Business overview

Market trends like

the shift to mobile and online banking confirm ING’s mobile-

first digital approach. Building on this, we adapted our processes

and service

models to make banking safer,

easier and always accessible to customers

in a

time of social distancing,

and put measures in place to help them deal with the

impact of the coronavirus pandemic on their finances.

These included contactless payments, more flexibility on loan and mortgage

repayments, financial advice and

partnering with business clients big and small to support them in the most appropriate way.

We also strived to

provide uninterrupted access to our banking services.

In 2020, weighted system availability

for Retail Banking

customers in the Netherlands and Belgium was 99.6 percent and for Wholesale Banking clients worldwide system

availability was 99.9 percent.

Reduced economic activity during the year meant demand for consumer and business loans was lower in a

number of markets, and the ongoing low/negative interest

rate environment pushed our net interest

income

down. Yet our results remained

resilient throughout the year.

Demand for mortgages remained healthy and we

were able to grow our fee income as considerably more

customers chose ING’s accessible digital

retail

investment products. We ended the year

with improving cost control and a strong capital

position, contributing

to a full-year result before tax

of €3,399 million in accordance with IFRS-IASB.

Recognising the growing demand for digital and platform services, we took

steps in 2020 to increase the pace of

end-to-end digitalisation across our business and make our products and processes

even easier,

smarter and

more efficient, from onboarding new customers

to instant payments.

At the same time, to provide our 39.3 million customers with a differentiating

and engaging experience

everywhere and to move closer to becoming a universal data-driven digital

leader, we aligned our Retail

organisation under one management team with shared global priorities aimed at harmonising customer

engagement and selected products on cross-border platforms.

We also centralised innovation,

introduced ‘do your thing’ - ING’s

first global tagline – and harmonised our

activities for small and medium enterprises (SMEs) and mid-corporate clients in seven countries

in a new

Business Banking segment.

In Wholesale Banking we deepened our focus on core clients, supported by steps to build differentiating

value

propositions to meet their needs. This also supports our strategy to diversify income by generating

more fee-

based business. We continued to focus on digitalising our processes and st

reamlining our organisation to deliver

faster and better to clients. As part of the focus

on core clients, we announced measures to simplify our

geographical footprint, withdrawing from

South America and selected Asia markets while continuing to serve the

needs of clients in those markets from our regional hubs.

Our markets

ING serves over 39.3 million individual customers as well as small and medium-sized businesses up to

multinational corporations and financial institutions.

Our Retail Banking business line offers private

individuals a full range of products and services covering

payments, savings, insurance, investments

and secured and unsecured lending. This segment also includes self-

employed entrepreneurs, micro businesses, small-to-medium enterprises

(SMEs) and mid-corporate companies

who are served by our Business Banking proposition in several European countries. These business customers

earn revenues of up to €250 million and our goal is to help them manage and accelerate their business.

Wholesale Banking offers corporate clients

advisory value propositions such as specialised lending, tailored

corporate finance, green structuring and debt and equity-market

solutions. It also serves their daily banking

needs with payments and cash management, trade and treasury services.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Our markets

Market Leaders

Netherlands, Belgium, Luxembourg

•

Leading retail and wholesale banks

•

Cross-border customer interaction platform

with mobile-first customer

experience and cost efficiency

Challengers

Australia, Austria, Czech Republic, France,

Germany, Italy,

Spain

•

Digital bank with uniform, mobile-first customer experience

•

Broadening product capabilities

Growth Markets

Poland, Romania, Turkey,

the Philippines and our stakes in Asia

•

Universal banks in economies with high growth potential

•

Developing differentiating customer experience

based on

mobile-first approach

Wholesale Banking

International network and global franchises

•

Active in more than 40 countries

•

Extensive international client base across all regions

•

Sector-focused client business in lending, capital structuring and advisory,

transaction services and financial markets.

We offer:

•

Payments, savings, insurance, investments

and lending products and

services to individuals, SMEs and mid-corporate clients

•

Daily banking and strategic finance and advisory propositions to corporate

clients

Our customers

39.3 million

(year-end 2020)

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Supporting customers in crisis

The Covid-19 crisis impacted our customers in many ways. Across

our business we took action to help them

navigate the economic headwinds and stay in control

of their finances during this turbulent time. ING’s support

began with the basics: aiming to provide

uninterrupted access to our mobile and digital channels when

customers need them most and making their lives easier with digital tools such as contactless payments.

To ensure

the continuity of services our Wholesale Banking clients rely on, certain business-critical operations

such as Financial Markets, Treasury,

and Payments, were split across different

locations during

global lockdowns.

In the Netherlands, 85 percent of all card payments in 2020 were contactless

via plastic cards and third-party

services like Apple Pay,

as well as our own Android solution in the banking app, which is now also available in

Australia, Poland, Romania, Germany,

France, the UK (via Yolt), Italy

and Spain. Driven by accelerating digital

behaviour of our customers, the use of mobile payments increased rapidly

against a backdrop of lockdowns and

other Covid-19 measures, both as a share of total card payments and total

contactless payments. Customers

appreciate not having to enter their pin code on a terminal.

In countries such as the Netherlands, Spain, Belgium, Germany and Turkey,

we increased the daily limit for

contactless payments so customers could use this option more

often and made it free to withdraw cash from

ATMs (in some countries this is already a free

service). Customers in Poland can use their mobile phones to make

contactless ATM

transactions. Also in Poland,

it’s now possible to open a new account from home using just a

mobile phone and an ID card.

New mortgage customers in Australia can

now validate their identity by video; video calls to advise customers on

investments and other matters replaced

face-to-face contact in Belgium and the Netherlands. For primary

customers in Australia, ING maintained a higher savings

interest rate even

when they did not reach the salary

deposit requirement.

In some countries, a limited number of branches remained open for customers

who wanted in-person advice. In

our branches we took precautions to ensure the safety

of customers and employees, such as installing plexiglass

screens, making hand sanitisers available, splitting teams and limiting visits to by appointment

only.

Payment holidays

Customers in all retail countries were offered

mortgage holidays and deferrals

on loans and credit card

repayments. We granted

196,000 customers payment holidays totalling

€19.4 billion since government measures

were introduced in various countries to protect

people impacted by job losses and loss of income during the

lockdowns.

Of these, 55 percent were for customers in the Netherlands and Belgium. By

the end of the year, 93%

of payment holidays had expired.

We also provided around €1.5 billion of government-guaranteed

facilities to

support our business clients.

In addition, ING worked closely with business clients to understand the direct impact on their individual

situations. Some industries, such as travel, hospitality and transport, were

more severely affected than others. In

the most heavily affected sectors governments

also stepped in to protect companies and jobs with measures

such as tax payment holidays and compensation schemes. Between March

and May we collected feedback from

over 18,000 businesses in six countries through regular pulse checks to gain insight into

their needs.

While it is impossible to predict how the pandemic will develop, additional lockdowns across Europe in the

autumn and the phasing out of related payment holiday schemes and other support measures could potentially

lead to more business insolvencies and unemployment. This could lead to more customers getting

into financial

difficulties and to higher levels of default.

More information on the impact of Covid-19 on ING as well on the related risk measures taken

to address it can

be found in the ‘Risk Management’ section.

Short-term liquidity

In times of crisis, companies need to be able to make swift decisions and want a financial partner they can trust

to be there for them. For many businesses, their most urgent

initial need was support with liquidity, particularly

when markets are as volatile

as today.

In Turkey,

ING worked with the World Bank and Turk

Eximbank on a €380 million loan to support exporters with

financing during the crisis.

In the Netherlands, we dedicated €1.1 billion for loans to SMEs. Part of these funds will be guaranteed

by the

European Investment Bank and €702 million of these loans will be sold against a favourable

interest rate.

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ING Group Annual Report 2020 on Form 20-F

ING proactively contacted Wholesale Banking and Business Banking clients to discuss ways

to ease the impact on

their businesses, which in some cases was significant. By monitoring the business landscape to better understand

which industries are most impacted we can tailor our support and solutions to specific industries and determine

who needs our help the most.

These tailored solutions included ways of easing their short-term liquidity needs with funding set apart for Covid-

19 facilities. ING’s capital

markets teams placed €39 billion of bonds via active bookrunner roles for corporates

and financial institutions and approved around 70 new liquidity facilities for top-segmented

clients. By converting

Covid-19 facilities into capital market mandates

we believe we helped clients secure longer term funding more

easily while lessening the risks for our bank by shifting exposure to the institutional market.

In May, ING collaborated

with French bond issuer Caisse Francaise de Financement Local (CAFFIL) on Europe’s

first Covid-19-related bond to raise financing for

French public hospitals.

Financial health

Managing money is one of the leading causes of stress for people around the world as many struggle to meet

their day-to-day needs or plan for their future. This was amplified during the Covid-19 pandemic. ING offered

budgeting and debt relief advice and guidance to customers in financial difficulty in partnership with

organisations like the Dutch ‘Geldfit’ website,

and financial counselling services in Australia and Romania.

Using our knowledge of innovation and digitalisation,

we put insights about people and money into products,

tools, research and education that help contribute to a financially healthy

society. We

believe that the right

information at the right time can help people make better

financial decisions. We are delivering that through

forecasting tools, such as ‘Kijk Vooruit’ which gives Dutch customers

an overview of upcoming payments. With

Everyday Roundup,

available in Australia, Poland and Romania, we

help customers save while they spend (see

‘differentiating

customer experience’

below). In Belgium, we’ve partnered with fintech Minna to manage

customer subscriptions (see ‘Platform thinking’ below).

As a result of our financial empowerment activities, 27.8 million people (71 percent of our customer base) felt

financially empowered by ING in 2020. In 2019, this was 25.9 million or 67 percent. Our ambition for 2022 is for

30.2 million customers to feel financially empowered by ING.

Achieving our business goals

We still have a lot to do to become the

leading data-driven digital bank we aspire to be, but we also have to

remain flexible in dealing with the impact of the coronavirus pandemic, changing customer behaviour,

persistently low/negative interest

rates and increasing regulation. That means continually weighing up benefits

versus costs, consistently using what we have

already developed, quickly applying learnings and best practices,

and taking decisions to focus our activities to ensure we deliver on our strategic

priorities.

These considerations informed the decision to reduce the geographical

footprint of our Wholesale Banking

business and to stop Maggie,

our transformation programme to

simplify and harmonise the product offering and

experience of retail customers in four Challengers

markets.

Instead,

as we develop our universal digital bank, we

will focus on the global use of ING’s technology foundation

to build scalable cross-border products and a

consistent end-to-end digital customer experience in all our markets.

Global priorities

The accelerated shift to mobile and online banking in 2020 increased the urgency of stepping up the end-to-end

digitalisation of our products and services. Linked to this is the need for good quality data to

drive the engaging

and personalised customer experience we are aiming for.

Building on what we’ve learnt and achieved over the past years, we

adapted our Retail organisation in 2020 to

increase alignment around key priorities that will contribute

to our ambition to become one global digital bank.

Led by the new global Retail Banking management team, we will focus on rolling

out global digital propositions

converging towards a common engagement

platform. And we are looking for new ways

to be relevant to our

customers and generate alternate

revenue sources.

Innovation is essential here. To

increase the impact of our innovation and speed up execution, ING has created a

new dedicated business area,

ING Neo, which combines all of our initiatives and activities in this area.

Of course, keeping our bank safe, secure and compliant

remains a priority for ING. Customers trust us to protect

their money and their data. That trust is our licence to operate.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Unleashing sector potential

In 2020, we remained focused on providing our corporate clients

with relevant advice, data-driven insights and

customised, integrated solutions that make

their day-to-day banking more efficient and support their business

ambitions. This is in line with the revised Wholesale Banking strategy we introduced in 2018 to enable us to

adapt to and overcome a challenging and complex market

environment, as well as increased regulatory

requirements, evolving technology,

greater competition and our clients’ changing needs. Addressing these

challenges, amplified by the effects of Covid-19, required us to accelerate

our priorities and refocus our activities

to ensure we deliver to our customers faster

and continuously improve the end-to-end digital experience.

We further developed our sectors strategy

over the year,

pairing local and global insight with sector knowledge

and financial expertise,

and we enhanced our client segmentation model, which helps us tailor our daily banking

and advisory value propositions to clients specific needs. Based on similar considerations of aligning with our

core client base and deepening our relationship, we made the decision to withdraw from a number of countries

in South America and Asia. We’ll continue serving the international needs of our clients in these countries from

regional hubs. We will stay focused

on improving client service delivery and streamline our operating model by

clustering similar activities and know-how in existing centres of expertise.

Several deals in 2020 reflect this sector focus.

These included a €1.6 billion debt financing package for Swedish

sustainable battery producer Northvolt to finance Europe's

first home-grown gigafactory for

lithium-ion

batteries. ING co-led the lending consortium.

ING was also involved in the largest green loan to date

in Asia-

Pacific in the commercial and industrial (C&I) renewables sector,

a US$75 million loan to Singapore-based

Cleantech Solar.

We work with our Wholesale Banking clients to finance and facilitate

their transition to low-carbon technologies.

We’ve developed a comprehensive

suite of sustainability products and services to help them, including green

loans and green bonds.

In July, we announced that due to Brexit

we will move some Financial Markets activities from London to

Amsterdam.

Here we already have a relatively large

Financial Institutions/Financial Markets risk organisation,

which can be effectively used during and after the transfer

of the operations. The move does not impact our

clients or client coverage.

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ING Group Annual Report 2020 on Form 20-F

A differentiating customer experience

More and more people are discovering how easy and efficient it is to

do their banking online, with the number of

digital interactions growing to 5.3 billion in 2020 from 4.5 billion in 2019. Of these, 87 percent are

mobile

interactions, with a growing number of Retail customers

only interacting with ING via their mobile phone: 40

percent versus just 12 percent in 2016.

This digital connectivity yields data and insights that contribute to a more personalised

and empowering

experience, giving customers even more reasons to interact

with us. This is how we can become an essential part

of people’s digital lives.

To provide

customers

with an even more personal, easy and smart experience, we held our first

fully virtual

customer experience (CX) day in October 2020. More than 2,000 colleagues from Belgium and the Netherlands

attended. They made small changes that can have a big impact, resulting in 291 customer

experience

improvements.

Among the new mobile features introduced in 2020 is a single sign-on that allows customers

in the Netherlands

to seamlessly switch between their mobile app and online banking, and we made it easier for them to block,

unblock and replace their bank cards themselves. In Belgium, customers can use their bank app to manage

subscriptions via third party Minna and send payment requests through Payconiq.

And we extended ‘magician

mode’ to Germany,

which hides customers’ account information when they swipe their hand in front

of their

phone camera while using the app in public.

For visually impaired customers, ING is the first bank in the Netherlands to provide

a bank card with a notch in

the side so they can easily recognise it and insert it correctly into an ATM.

In the Philippines, ING’s newest mobile-only retail

market, the ING app has been installed more than two million

times since its launch in November 2018. The introduction in the Philippines of ING Pay in November 2020 led to

over 60,000 new daily accounts in its first month.

With customers looking for alternatives to savings

accounts in the low/negative interest

rate environment, we’re

empowering them with smart digital investment tools like

My Money Coach in Spain, Coach Epargne in France

and Easy Invest in the Netherlands. In 2020, our retail investment

products in Germany and Spain reached €56

billion and €12.3 billion in assets under management respectively.

In Germany, ING is the first

bank to offer

securities savings

plans that allow all customers to invest small amounts (from

€1) in shares, exchange traded

funds (ETFs) or mutual funds. With savings plans available for more than 1,800 securities, including more than

200 funds and ETFs without purchasing costs,

it’s a low-threshold entry into investing

ING’s Everyday

Roundup (ERU) product is helping to make saving simpler.

First introduced in Poland,

then in

Australia and Germany,

it is now also available in Romania. More countries will follow in 2021. By rounding

every transaction and transferring the difference

to the customer’s savings account, it makes

saving frictionless

at a time when customers may be financially vulnerable (due to the corona

virus crisis). ING in Germany launched

a 'donate to Unicef' option for rounding up and ING in Australia has a roundup

option for mortgages. The next

step will be investments.

There are 850,000 active ERU users,

of which almost half are in Poland and Australia,

while users in Germany rose to 156,000.

Our Yolt smart money app introduced a similar feature

in 2020 called Money Jar.

It too allows users to save while

they spend by rounding up purchases to the nearest pound or euro and offering cashback

from selected retailers.

The money jar feature also offers handy tips and reminders

for users to increase their savings. It's trained to

recognise and save refunds, salary raises and even bonuses.

Through ING’s bancassurance

partnership with AXA, customers can create their own personalised insurance

cover in a clear and easy way using their ING mobile app or the ING website.

For example, customers in Italy only

have to answer three

questions to get building and contents insurance compared to

60+ previously – something

they appreciate, rating the service with a 4.5 out of five for advice and satisfaction.

The bancassurance offering is

now available in five countries through 11 insurance products

delivering banking linked to lending and home/life

protection.

A further two propositions for mobility and wellness are being built to provide full lifestyle

protection

for customers through ING’s

five billion digital engagements.

In the Business Banking segment, we are digitalising our proposition for SMEs, micro businesses, mid-corporate

and self-employed customers using the Touchpoint

platform. This will enable us to standardise our offering for

over 1.5 million businesses in Belgium, Luxembourg, the Netherlands, Poland, Romania, Germany and Turkey,

avoiding duplication and unlocking synergies between the countries.

Our call-centre platform,

developed as part of the Unite be+nl programme, is providing a harmonised customer

contact experience across multiple customer interaction

channels in eight countries. Because it is cloud-based,

customers receive the same services everywhere and it makes it easier for

ING to share and adopt innovations

and adjust to changing customer needs.

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ING Group Annual Report 2020 on Form 20-F

One brand

The introduction in 2020 of ING’s new global ‘do

your thing’ tagline in the Netherlands, Belgium, Romania,

Poland and Wholesale Banking brings a common brand direction to the bank that will be extended to the other

ING countries over time. We launched advertising campaigns that included

new brand elements like a new style of photography,

a sound logo and always signing off with

‘do your thing’.

The tagline articulates ING’s empowering purpose and encourag

es people to do more of the things that move

them or their business. It is about people being free to focus on what matters most

to them knowing that,

whether in their private or professional lives, they can make

their world a little better

for it.

In Wholesale Banking, do your thing is linked to ‘changemakers’

– companies and people that ignite and lead

sustainable change in a responsible way.

Instant payments

Open banking has changed the way people pay,

giving consumers more options and opening up this service to

non-traditional providers. To

keep up with payment trends, ING has introduced instant

payments executed in

real time 24/7, 365 days a year.

In 2020, the service was extended,

enabling payments instantly from the

Netherlands to the rest of Europe. ING is also working with major retailers in the Netherlands to extend

peer-to-

peer payments (apps that enable users to request and receive payments

instantly) so merchants can send their

customers a mobile payment request on delivery

of goods.

Following a successful pilot in 2019, ING now uses SWIFT gpi in nine ING countries to make international

transfers quicker

and easier. With

SWIFT gpi around 80 percent of international money transfers

are done on the

same day, compared

with three to five days previously.

For Business Banking customers, ING added a bulk payment functionality to its payment initiation

application

programme interface (API), making it possible to pay

up to 5,000 recipients simultaneously. In addition,

supports multiple strong customer authentication,

that allows all types of payments requiring two or more

authorisations.

Making life easier for commuters on the go, ING is piloting Invisible Tickets,

a Dutch initiative that allows them to

seamlessly pay for public transport using mobile phone sensors. It is aimed at countries where the use of public

transport is high, such as Germany,

France, Italy,

the UK and the Netherlands.

Platform thinking

The power of platforms is that they are open, borderless, scalable, empowering and generate

large amounts of

data through frequent user interactions

that can in turn be used to improve users’ experience. To

remain

relevant to our customers we need to

be on the digital platforms where they are spending their time shopping,

socialising and working.

ING is exploring various platform business solutions. We are

building our own platforms.

Some of these have

evolved into stand-alone platforms.

Smart money app Yolt, mobile payments

app Payconiq and corporate

multibank platform Cobase are three examples.

Yolt, which now has over 1.6 million registered

users in the UK, Italy and France,

added new features in 2020,

such as Money Jar, which helps customers

save while they spend. Yolt

Pay,

currently in beta, uses open banking

APIs to initiate money transfers between

users’ accounts and to pay others. The app also links to partners

MoneySuperMarket, PensionBee and Wealthify so they can

invest, save on household bills and grow their

savings. In 2020, Yolt was named the best

personal finance app at the Wealth and Finance Fintech Awards.

ING can also add value for our customers by connecting to relevant

products and services on third-party

platforms. In 2020, we strengthened our SME offering

as the first bank in Germany to offer loans through

Amazon’s sellers

platform, which is mainly used by SME companies. ING’s banking platform

offers these clients

access to the digital lending solution of fintech Lendico, which provides

loan approvals within 48 hours.

In Belgium, we partnered with Minna Technologies

on a subscription service for customers. Using the ING app,

customers can keep track

of and manage their subscriptions, and even cancel unused subscriptions or switch to

better alternatives through an automated process,

helping them save money and time.

The integration of international payments

platform Payvision strengthens

ING’s digital payments

business,

especially in e-commerce.

Payvision is a subsidiary of ING that facilitates more

than 80 payment methods in 150

currencies. Its combined e-commerce and in-store solution helps merchants to

offer their shoppers a seamless

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ING Group Annual Report 2020 on Form 20-F

checkout experience across all channels. Since acquiring Payvision in 2018, ING is exiting Payvision

clients that no

longer fit our risk profile.

Open banking

The introduction of the European Payment Service Directive 2 (PSD2) in 2019 is reshaping the banking industry.

requires banks to rethink traditional products and services and create

new customer experiences that stand out

in a competitive landscape. At the same time, open banking allows us to connect to other providers

and integrate

products and services to add value for our customers. Our open banking platform

provides the key capabilities

that allow ING to open up by establishing secure, scalable, compliant and uniform connectivity with external

parties via application programming interfaces (APIs).

We believe open banking and APIs are a great way

to foster innovation, accelerate

digitalisation and integrate

and co-create with others. Open banking propositions powered by API technology include the Lendico

SME

lending platform in Germany and the Minna Technologies

subscription management app in Belgium. In daily

banking, APIs boost treasury departments by delivering real-time cash and liquidity management.

Yolt Technology

Services (YTS), the business-to-business arm of the smart money app, facilitates open banking

for businesses across Europe by providing them with access to bank APIs that connect them to users’ bank

accounts to initiate payments.

In 2020, YTS surpassed one billion API calls – single uses of its API. In the

Netherlands, France and the UK, it offers businesses API coverage

to over 90 percent of bank accounts and its API

infrastructure can connect to 80 percent

of bank accounts in Belgium, Italy and Spain.

In Poland, ING introduced the first aggregator

service that allows customers to manage multiple bank accounts

from their ING Moje account. The new service is available through ING’s

online banking channel and the mobile

app.

We also use APIs to connect to our insurance partner AXA on ING’s

first multi-country product platform.

Cross-border customer engagement

Internally, we

are working to harmonise our customer experience where it’s possible and beneficial on truly

cross-border platforms, giving ING the same face in different

markets and the same banking interface with the

same look and feel everywhere.

One such example is InsideBusiness – ING’s digital banking portal

that provides Wholesale Banking clients with a

single point of access to a growing range of products and services around the globe. It is accessible anytime and

anywhere via web, mobile app and tablet. In 2020, there was rapid growth in the adoption of the InsideBusiness

app: user numbers doubled from around 2,500 to nearly 6,000 unique users,

while usage went up by 96 percent.

We also doubled the number of self-service processes clients can initiate from

InsideBusiness.

Given the complexities and costs of cross-border system

and product integration, and in light of

coronavirus-

related economic headwinds, we announced in November 2020 that we will stop the Maggie transformation

programme. Launched in 2016, Maggie aimed to integrate our product

offering and provide a standardised

experience for retail customers in four

Challengers markets.

We will instead focus on using ING’s

global

technology foundation – shared data lakes, cloud and modular IT building blocks – to

further develop our

universal digital bank and the rollout of global digital product offerings in insurance,

investments and consumer

lending. We will continue to focus on implementing global solutions locally as a way

to harmonise and

standardise the customer experience.

In the Netherlands and Belgium, where ING is already a market leader,

we are uniting our respective strengths to

deliver an even better and more consistent

experience across all channels for our combined 11 million

customers. In the second quarter,

customers in Belgium were migrated to the OneWeb

banking environment

shared with our Dutch customers. They also now use the same OneApp mobile environment as in the

Netherlands and Germany,

bringing us a step closer towards our ambition to provide customers

everywhere with

the same easy, smart and personal experience.

Around 1.8 million customers in Belgium are now using OneApp

and OneWeb for online banking. In the Netherlands around five million customers

use the app. New features

were introduced in 2020 to empower customers

to take charge of their own banking affairs

via their mobile

phone, for example to block a lost card or change their daily withdrawal

limit, cutting back on the need to

contact customer service.

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Beyond banking services

Thinking beyond traditional banking is crucial to find new ways to be relevant

to customers and create new

revenue streams for ING. It strengthens

our core businesses by engaging customers early,

increasing the

customer lifetime value and contributing to a more sustainable

banking business model.

We can introduce new and complementary services through platforms.

Shopping services can use our scale to

provide better deals or cashbacks to customers.

The DealWise shopping platform gathers cashback deals and

discounts in one place. Users can save on their daily spending while merchants gain insights that

help them

better understand, acquire, develop

and maintain customers. It is now available in Romania,

with plans to enter

Germany next.

Similarly, ING+Deals in Belgium and ING Punten in the Netherlands are shopping platforms

offering customers

exclusive deals in partnership with various A-brands.

In addition to promoting customer loyalty,

these shopping

platforms help to increase interactions with ING’s

own digital channels. ING+Deals, with over 200,000 users

generated more than €5 million revenue for our merchants

in 2020, while ING Punten delivered a turnover of

€45 million from the sale of 1.4 million products.

In the know your customer (KYC) space, CoorpID provides a digital vault where

corporate clients can securely

store and share the KYC documentation

required by multiple financial institutions. CoorpID was connected to

ING’s KYC organisation

in 2020.

ING moved steadfastly on its housing strategy

across Dutch and German markets with disruptive concepts like

Scoperty and Makelaarsland. The near-term objective

is to independently grow these and invest in synergistic

business models. Makelaarsland is a property platform empowering people in the Netherlands

to buy and sell

their homes online themselves or with the support of a local agent.

In Germany, ING partnered

with Sprengnetter on Scoperty,

a real-estate platform connecting buyers

and sellers

of more than 35 million properties. The pre-qualification process for mortgages

is aligned with that of Interhyp,

ING’s independent mortgage brokerage

platform in Germany and Austria. Interhyp offers

buyers access to 400

mortgage lenders. In 2020 its market share rose to

10 percent in Germany (nine percent in 2019).

Earning the primary relationship

Customer numbers grew in 2020, especially the number of primary customers. These are Retail

customers with

multiple active products, including a current account with recurrent income, such as a salary.

In Wholesale

Banking these are clients lending and daily banking products and at least one other product generating recurring

revenues.

Earning the primary relationship is a strategic priority for ING as it leads to deeper relationships,

greater

customer satisfaction and ultimately customers

choosing us for more of their banking needs.

We want our

customers to do more than just some of their banking with us; we want to be their first

partner, where

they

deposit their salary, handle their payments and do most

of their other banking business.

In 2020, the number of primary customers increased by 578,000 to 13.9 million. Across retail segments

this

comprises 5.8 million for Market Leaders,

4.9 million for the Challengers Markets – where primary customers

Germany grew by 330,000, a record 56 percent in net growth

versus 2019

– and 3.2 million for Growth Markets.

Retail markets

NPS

Number 1 in

6 out of 14

markets

Wholesale Banking NPS

13% above

industry

average

Measuring customer satisfaction

One of the ways we measure our progress is through the Net Promoter

Score (NPS), which indicates customer

satisfaction and loyalty (whether they would recommend ING to

others). The score is calculated as the difference

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between the percentage of promoters

(who rate ING as 9 or 10 out of 10) and detractors (those scoring ING

below a 6). Our aim is to achieve a number one NPS ranking in all our retail markets, with a 10-point lead over

our main competitors.

Based on a rolling average of our NPS scores in 2020, ING ranked

number one in six of our 14 retail markets:

Australia, Germany,

Poland, Romania, Spain and the Philippines. In four of these we are more than 10 points

ahead of our nearest competitor.

ING also has a top-three position in a further six markets. The introduction of

current account fees in Germany in February 2020 led to a downward

dip in our NPS score here, but overall we

retained our number one position in Germany in all four quarters. In France,

more innovative competitors

overtook ING in the number one position.

In the Business Banking segment, we measure NPS in four markets. These are the Netherlands, Belgium, Poland

and Romania. The NPS for mid-corporate clients in the Netherlands improved

to +18.4

(from +12.4 in 4Q 2019),

well above our competitors (-23.3), based on feedback from

clients who do business with multiple banks. Clients

appreciate our sector knowledge combined with regional presence, with satisfaction

highest in the services,

industry and transport and logistics sectors. However,

there is room for improvement to make

the digital

customer experience easier and more personal, especially for Dutch SMEs and self-employed

clients, where our

NPS among both client groups declined to -26 from -20 and -18 respectively.

In Poland, the combined NPS for

SME and mid-corporate clients improved to +43 (from

+30 in 4Q 2019). As we revised our methodology in

Belgium we don’t have comparable figures for 2020. Although slightly lower than

in 2019, the NPS for micro

clients and SMEs in Romania is still a high +43 and +54 for mid-corporates.

The NPS programme also runs in 26 Wholesale Banking markets. In addition, we introduced a transactional

NPS

to measure client satisfaction on service requests for daily banking. In 2020, the customer

satisfaction exceeded

8.5 (scale 1-10). The overall NPS rating reached +56.3 (on a scale of -100 to +100), up from a score

of +49.6 in

2019, and 13 percent ahead of the industry average of +49.8. The response rate

also increased to 60 percent

compared with 50 percent in 2019, showing higher client engagement with ING. The scores are based on

thousands of responses from clients representing more than 50 percent of Wholesale Banking revenue.

The NPS

of Platinum and Gold clients showed an even higher year-on-year increase of 33 percent and 21 percent,

respectively. All sectors

also registered stronger NPS, with Energy achieving an exceptionally

high score of +71.3,

a 26 percent increase year-on-year.

The higher scores suggest that clients appreciate our approach (see

‘Unleashing sector potential’ above) and that Wholesale Banking is succeeding in its strategy to focus

on core

clients, with as a result more resources allocated to a smaller group of clients

and higher client satisfaction.

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External recognition

Recognising our efforts, Global Finance magazine named ING as the best consumer digital bank in Germany

while

Euromoney named us the best digital bank in Central and Eastern Europe,

as well as best bank in the Netherlands

and in Poland.

For the 14th year,

German consumers voted ING their preferred bank in €uro

magazine’s annual survey.

Australia, ING was named ‘Best Bank’ by financial comparison sites Mozo and Canstar

ING was also Canstar’s

Bank of the Year and ‘Most Trusted

Financial Institution’ at the Australian Banking Innovation Awards. In the

Forbes list of the world’s best

banks, ING ranked among the top five in seven count

ries in 2020.

Global Finance also named ING as the most innovative bank in Western Europe.

Three ING innovations also won

Innovators 2020 Awards: Zero

Knowledge Proof Notary (cash management category), CoorpID (corporate

finance

sector) and FINN – Banking of things (payments sector).

In Wholesale Banking, ING was recognised as Western Europe’s

best bank for transaction services (Euromoney)

and the best investment bank and best trade finance provider in the Netherlands (Global Finance).

Continuing to innovate

Since the introduction of direct banking in 1997, ING is still finding new ways to improve the

banking experience

for our customers. Many of these advances stem from

twinning the latest technologies with data insights.

Growing demand for digital solutions is also spurring new ideas.

Initiatives that have benefitted from

this include the trade finance tools of the blockchain-based software

company Komgo, which grew out of ING’s

Innovation Bootcamp (see ‘Distributed ledger technology and

blockchain’ below). Also in trade finance, ING teamed up in 2020 with AI-driven trade platform Tradeteq,

the first

electronic platform that allows banks and institutional investors

to transact trade assets. Tradeteq

uses advanced

analytics and artificial intelligence to derive more accurate risk scores,

helping investors to better

evaluate

opportunities and offers an end-to-end solution covering portfolio management,

risk analytics and securitisation-

as-a-service.

At the ING Labs in Amsterdam, Brussels, London and Singapore, over 20

initiatives are currently in development

to make disruptive impact in the value spaces of trade, lending, safety and compliance, financial health,

and

housing. Examples are Blacksmith, Loan Optics and Stemly.

Blacksmith, which ING has started using for

Wholesale Banking clients in Asia, provides banks with a single platform for digitally managing KYC

requirements,

connecting to trusted data sources, generat

ing tailored KYC files for its clients and quickly implementing

regulatory changes. Loan Optics is a platform for digitally-native

loans. It reduces operational costs by

streamlining the primary and secondary loan implementation processes. Stemly is creating an autonomous

decision system for supply chain and finance processes.

In Wholesale Banking Advanced Analytics we’re building artificial intelligence-powered products

to better

understand and serve our clients. These include improved monitoring and analysis activities for client

-facing

departments and Hunter,

a tool that accelerates the detection and investigation

of money laundering schemes,

reducing the workload for our KYC colleagues. Domino is a tool that gives us a ‘360

view’ of mid-corporate and

corporate clients to ensure we’re

having the right conversations at the right time to meet

their needs. In

addition, in 2020, we delivered a proof of concept to gain insight into how

mid-corporate clients are dealing with

the coronavirus crisis so we can help them where they need it most. It provides insights that go beyond

our

traditional knowledge of real-time client situations such as whether the client is receiving government

support or

needs support with tax payments.

Distributed ledger technology and blockchain

When it comes to distributed ledger technology (DLT),

ING is considered an industry leader.

For the second

consecutive year,

Forbes ranked ING as one of the top $50 billion companies embracing blockchain

technology.

Cryptoground, a blockchain and cryptocurrency hub, named ING among the best blockchain stocks

investments

in 2020.

Easy Trading

Connect (now Komgo.io) was one of the first to reinvent

commodities trade financing in 2017.

Komgo,

co-owned by ING, offers products that streamline

trade finance, optimise liquidity, manage risk and

verify customers. It recently created

a new feature, TRAKK, that uses DLT

to create provenance and immutability,

allowing traders to ensure the documents are genuine and are not used for

pledges to other parties. New DLT

initiatives currently in the execution phase include solutions for digital assets safekeeping,

tokenisation and

issuance of a structured finance loan for institutional investors, and an intra

-bank settlements utility token,

among others.

In October 2020, Contour went live. Co-founded by ING in a consortium with other major global banks, Contour

connects buyers, suppliers and banks across a decentralised digital

platform to bring transparency and trust into

trade financing. In its testing phase, Contour reduced the processing time for letters

of credit (LCs) from an

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ING Group Annual Report 2020 on Form 20-F

average of 10 days to under 24 hours.

Another ING initiative is securities lending platform HQLAx, which uses DLT

to facilitate trades in high-quality liquid assets, serving as an additional liquidity pool. It was commercially

launched in December 2020.

ING’s zero-knowledge

proof notary service, a solution aimed at improving the privacy and security of DLT

-based

transactions, received an Innovators 2020 Award

from Global Finance magazine in the cash management

category. Built

specifically to address the privacy requirements of R3’s

Corda platform, the capability is our latest

development in this field of cryptography,

following a suite of open-source privacy tools released in previous

years.

We amplify our DLT

impact by addressing how ING’s solutions can solve key

problems in the finance industry.

Our DLT research

team is constantly producing knowledge assets that can serve and influence the wider

community: from reflecting on the challenges and benefits of digital assets, to collaborating

with the Global

Blockchain Business Council and the World

Economic Forum on the creation of blockchain standards.

Fintech partnerships

ING entered into several fintech

partnerships this year that help our businesses execute our strategy.

Through

our investment arm, ING Ventures

we invest in companies with a strategic relevance

for ING. These are start-ups

with disruptive technologies that have the potential to improve

the customer experience or ING’s operati

onal

efficiency.

A number of partnerships are focused on enhancing our data analytics capabilities. One example is London-based

Eigen Technologies, which is working on natural

language processing (NLP) models tailored to the financial

industry’s need for data extraction.

The partnership is applying NLP and machine learning in areas such as

corporate lending, trade finance and SME banking to automate processes and reduce

risk and cost.

For our Business Banking clients we have a number of partnerships. Funding Options helps British and Dutch

SMEs find the right loan for their business. FinCompare gives German corporate customers

a quick and

independent overview of their financing options. TransferMate

provides SME customers and corporate

clients

with faster,

cheaper and easier payment solutions. We are also exploring new business models. Countingup, a

mobile banking app for self-employed entrepreneurs

and freelancers, combines accounting and banking features

into one seamless solution, greatly reducing operating complexity

and cost.

On the topics of aggregation, PSD2 and open banking, ING is working with an ING-initiated company,

Cobase,

which is making it easier and more efficient for international corporate

clients to work with multiple banks from

one cloud-based platform.

In the area of operational excellence, we’re

working with fintech Duco on a reconciliation solution that strongly

improves time to market in building reconciliations

and lowers the cost of carrying these out.

In the Philippines, ING teamed up with the UNICEF Innovation Office to support fintech start-ups working on

financial inclusion challenges (www.fintechforimpact.com

). The Fintech for Impact initiative will provide financial

support and mentoring for five projects: an app to bring affordable

healthcare to rural communities; a tool to

help migrant workers manage their finances; a platform

connecting farmers and fishermen directly to buyers; an

app connecting students to education loans; and an AI-enabled platform to deliver grassroots

insurance to low-

income families.

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Responsible finance

As a bank, we are committed to contributing to a low-carbon

and financially healthy society, both through

our

own efforts and by helping our clients to be more sustainable. We

make the most impact through our financing,

via the loans we provide to clients. That’s why we

are committed to steering our €600 billion lending portfolio

towards meeting the well-below two-degree goal of the Paris Agreement.

We call our approach to measuring and

steering, Terra.

Terra

approach

ING’s Terra

sets out our approach for aligning our lending portfolio with the Paris climate goals in the nine

sectors most responsible for climate change. Since 2019, we have

made significant progress in further

developing, refining and applying the Terra

approach. In October 2020, we released our second progress report

on Terra.

It included quantitative results and targets for

all of these nine sectors, fulfilling the commitment we

made the previous year.

The report’s Climate Alignment Dashboard tracks

our performance, showing the CO2 intensity per sector of our

portfolio compared to the market and the relevant

climate scenario. The portfolios for power generation,

shipping, cement and steel are ‘on track’ for

climate alignment, while residential real estate,

automotive and

aviation are ‘close to being on track’.

For the remaining two sectors we cannot yet benchmark our performance.

For upstream oil and gas this is because the 2019 portfolio is our starting point and we

will need to see

movement relative to the scenario pathway,

starting next year,

before indicator status can

be given. For

commercial real estate we still lack complete

and up-to-date market data.

ING’s power generation

portfolio continues to outperform the market

and both the International Energy

Agency’s sustainable development scenario (SDS) and the OECD scenario. In the 12 months measured in the

Terra

report, ING reduced

its direct exposure to coal-fired power plants by 43 percent

(in line with our

commitment to reduce it to close to zero by

the end of 2025) and increased financing for renewable energy

generation by €1.19 billion. Other sectors face more challenges, such as the residential

mortgage sector.

There

we encounter a shortage of accurate

data to measure progress and a general lack of homeowner action. Read

the full Terra

report on ing.com, and see ‘Greener homes’ below for more information

about making our

mortgage portfolio energy positive by 2050.

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One of the targets included in the report is our aim to reduce financing to upstream oil and gas by

19 percent by

2040 from 2019 levels. We’ll align this portfolio both by decreasing exposure

and engaging with clients to help

them shift to low-carbon technology.

The measurement is based on three indicators: emission intensity,

absolute reduction in financing and a relative transition of the financing mix from high-carbon to low-carbon

and

renewable energy.

This target is also aligned with the SDS scenario, which is not static. If more or quicker action

is needed and this scenario is adjusted, our target will adjust accordingly.

Terra’s

sector-based approach respects the fact that each sector has its own transition

pathway for it to

contribute to a low-carbon, below-two-degree

world. We therefore

use the most appropriate methodology per

sector.

One example is PACTA

for Banks, which was co-developed by ING and non-profit think tank the 2°

Investing Initiative (2DII). The methodology-specific application was

further refined with more banks and

published as an open-source methodology for all banks to use in 2020.

It looks at the technology shift that’s needed across certain sectors

to slow global warming and then measures

this against the actual technology clients are using – or plan on using in the future.

We believe that working together to achieve

an industry-wide standard will increase transparency and

ultimately

help the entire financial sector to make a bigger impact. We

also believe in an inclusive approach to climate

alignment, as we work with our clients to facilitate

and finance their shift to low-carbon technology.

We will continue to monitor and report on our progress, engaging

with clients and other stakeholders to advance

on the journey to combat climate change. We conduct strategic

dialogues with clients on how we can help them

align their business with the Paris Agreement goals, for example by

advising them on how to structure their

financing and gain access to funding. We also contribute to policymaking to influence change

on a larger scale.

For example, we’re working

with the European Investment Bank on the implementation of the European Green

Deal and we’re providing input for proposals by the Network

for Greening the Financial System on sustainable

stress testing to assess the resilience of the financial system

to climate-related shocks.

Our efforts in this area are being recognised. In 2020, we were ranked

as ‘climate action leader’ by

the leading global environmental disclosure platform CDP for

the seventh consecutive year.

We also ranked first

in our market-cap group by Sustainalytics and MSCI upgraded ING’s

rating to ‘AA’,

which underscores sound

corporate governance and our strengths

in financing environmental impact, among others.

Facilitating change

Sustainability is about planet and people. We believe we can make

more impact with what we do finance than

what we don’t. So when it comes to people, we aim to increase our social impact finance portfolio by lending to

projects that lead to, for example,

basic infrastructure improvements, community development

or essential

services. And we’re working on making a positive contribution to human rights as financier,

employer,

taxpayer

and driver of progress and prosperity.

This is also in line with the United Nations’ Principles for Responsible

Banking, of which ING was a founding signatory

in 2019.

We have an inclusive approach to driving sustainable

business. We work with our clients to facilitate

and finance

the shift to low-carbon technology.

This includes environmental, social and governance (ESG) checks to ensure

that our financing is in line with our own sustainability goals. Read more about our environmental

and social risk

policy framework at www.ing.com/Sustainability/Sustainable

-business/Environmental-and-social-risk-

policies.htm

ING is considered a pioneer in sustainable finance, having introduced the first sustainability

-linked loan and a

made-to-measure sustainability improvement loan. We

offer various financial instruments such as green loans,

sustainability improvement loans, green bonds and advisory services.

In 2020, we saw a visible softening of lending demand due to the impact of Covid-19 on economic activity. Our

climate finance portfolio decreased by 12 percent in 2020 to €16.5 billion (from €18.7 billion in 2019), mainly due

to lower lending volumes in renewable energy and sustainable buildings. Social impact financing for projects

that

lead to, for example, basic infrastructure

improvements, community development or essential services,

decreased by 29 percent to €533 million.

Despite the decline in demand, we continued to shape sustainable finance in 2020 with the introduction of an

innovative financing method to make inland shipping in the Netherlands more sustainable. A pay

-per-use

financing structure for renewable battery containers

makes it easier for ship owners to transition from diesel-

powered barges to electrical power without the need for a large

up-front investment. ING and partners formed

new company called Zero Emissions Services (ZES) to facilitate

the transformation. The Dutch transport sector is

responsible for 21 percent of the country’s CO2

emissions; ZES is moving it a step closer towards the Paris

Agreement goals.

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ING Group Annual Report 2020 on Form 20-F

In 2020, we started to link the circular economy even more

closely with our green finance products. The ZES

transaction is an example of how ING is exploring circular financial business models with various partners. The

circular economy offers a systematic

response to the climate crisis. It’s about rethinking our use of raw materials

and resources to reduce waste and emissions, shifting from ‘take,

make and waste’ to ‘reduce, reuse, recycle’.

Companies like ZES stimulate other use models for depleted battery

packs once they are exchanged to give them

a second or even third lifecycle.

ING issued 36 sustainability improvement loans and 20 green loans. Among these was the largest green

loan yet

in the Asia-Pacific commercial and industrial renewables sector.

The $75 million financing for Cleantech Solar will

support more than 500 megawatts of solar power projects across

Southeast Asia.

In addition to lending, ING supported 60 mandates for clients through green, social and sustainability bonds. In

September,

ING was involved in Ireland’s

first-ever green bond issued by AIB bank. The €1 billion will be used to

finance renewable energy projects and green buildings in Ireland and Britain.

ING broke new ground with Europe’s

first Covid-19-related bond, which raised financing for French

public

hospitals. ING was the joint bookrunner in the €1 billion deal with French bond issuer Caisse Francaise de

Financement Local (CAFFIL). Issued in May,

it was the first negative yield bond launch since the end of February

when the pandemic triggered a global sell-off and closed the primary market. ING’s previous

collaboration with

CAFFIL on the first French social covered bond was a winner at Environmental

Finance’s Bond Awards 2020.

ING subsequently supported a further three issuers with Covid-19-related bonds, helping them to overcome

the

impact of the crisis. We acted as bookrunner in the €500 million social bond for Korea Housing Finance

Corporation; as joint bookrunner in the €1 billion social bond for CaixaBank; and joint lead manager on the €500

million bond for the Export-Import Bank of Korea (KEXIM).

Greener

homes

A significant part of our loan book consists of residential mortgages, and houses generally account

for about 22

percent of direct and indirect CO2 emissions in the EU. We’re

working with clients to improve the energy

consumption of the houses we finance as a way of achieving our Paris alignment goals. Our long-term vision is to

have an energy-positive mortgage portfolio

by 2050. This means that the houses in our portfolio will collectively

generate more energy than they consume.

Our current carbon intensity measurement covers

our Dutch and German mortgage portfolio,

with a combined

outstanding lending amount of roughly €180 billion (60 percent of total mortgage

outstandings) and more than

one million financed homes. See the latest Terra

report on ing.com for information on the underlying

measurement.

We are developing retail products,

tools and services to help homeowners make their houses more sustainable.

Customers can use these products to finance solar panels, for example,

or insulate their homes. In Germany,

provide green mortgages through development bank KfW.

In addition to financial solutions, we help to raise awareness on the topic. Consumers in the Netherlands, for

example, can check the energy profile of their homes on our website, as well as the options and financing

available to improve in this area. And we provide

Dutch homeowners who want to invest in upgrading

their

energy label with a free rating as we know how insights can help people to take

the first steps towards a more

sustainable home.

However,

the number of homeowners taking up this offer remains low.

This likely reflects the cumbersome

process of gathering data for an energy label upgrade.

And although an up-to-date energy label is required when

selling a home, only a small percentage of properties in our portfolio are sold each year.

Sustainable investment services

ING offers sustainable investment

(SI) services to its Retail Banking customers in the Netherlands, Belgium,

Luxembourg and Germany.

In 2020, ING’s retail brokerage

division recorded €13.2 billion in sustainability assets

under management, up from €9.3 billion in 2019. This underlines our clients’ appetite for products and services

that integrate sustainability criteria

Competition

ING is a global financial institution with a strong European base, offering retail and wholesale banking services to

customers in over 40 countries. The purpose of ING is empowering people to stay

a step ahead in life and in

business.

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ING Group Annual Report 2020 on Form 20-F

ING’s Retail business serves 39 million customers,

from individuals to small and medium-sized businesses and

mid-corporate clients. In most of our Retail markets

we offer a full range of banking products and services,

covering payments, savings, mortgages, insurance,

investments and secured and unsecured lending. Our

Wholesale Banking business offers clients advisory value propositions such as specialised lending, tailored

corporate finance and debt and equity-market

solutions. These clients range from large companies to

multinational corporations and financial institutions.

There is substantial competition in the Netherlands and the other countries in which we do business for the types

of wholesale banking, retail banking, investment banking and other products and services we provide.

This competition is most pronounced in our more mature markets of the Netherlands, Belgium, the rest

Western Europe and Australia.

Our largest market is the Netherlands, where our main competitors

are ABN

AMRO and Rabobank. In recent years, competition has increased in emerging markets

such as Asia and Central

and Eastern Europe. Financial services companies from more developed countries see these markets

as offering

higher growth potential, while local institutions have become more sophisticated

and competitive and have

proceeded to form alliances, mergers or strategic

relationships with our competitors.

However,

our competitive landscape is transforming as society becomes increasingly digitalised and ever

reliant on technology and the online economy – a trend amplified during the Covid-19 pandemic, which

accelerated the shift to mobile banking and contactless payments. Our main competitors

are no longer just other

banks. The big winners in 2020 were the tech companies that offer

an engaging digital experience on an open

platform that meets a range of needs in one go-to digital ecosystem.

Platform providers are all about customer experience.

They use data and advanced analytics to pinpoint what

people need and partner with third parties to meet this with a fitting product or service, ensuring customers

come back for more. This ability to meet people’s primary needs in a way

that is easily accessed on mobile

devices is what defines their success. Banking, by contrast, is a facilitator and not a primary need. The choice for

banks is to challenge their existing business models and disrupt themselves, or risk being eliminated as an

intermediary and relegated to the status

of white label facilitator of others’ platforms.

In this environment, the

digital customer experience is the key differentiator,

shaped by customer expectations based on their

interactions online and on their smartphones: easy,

smart and personal.

The opening up of the European payments market under the PSD2 directive is a significant competitive

development. It is creating a more crowded, uneven playing

field as new providers enter this lucrative

area once

dominated by banks. Newcomers include third party mobile and online payment platforms

like ApplePay and

Alipay, as well as fintechs

and other non-banks. These new entrant have operating models that

are not burdened

with potentially costly legacy operations. They are less regulated

than banks and use technologies like

blockchain, robotics and artificial intelligence and advanced data and analytic tools to lower

cost to serve and

speed up processes.

Advances in technology are accelerating the use of new business models, for example

in retail payments, peer-

to-peer lending, foreign exchange and low-cost

investment advisory services. New solutions offered by rapidly

evolving incumbents, challengers and new entrants, especially with respect to

payment services and products,

are disrupting the financial services sector and leading to the emergence of disintermediation. To

remain

competitive, banks have to think beyond banking and develop

their own platforms. Winners will be those with a

superior digital experience, a strong trusted brand, and the ability to mobilise a large

customer base to attract

partners to their platforms.

Successful platforms take the effort

out of managing finances, offering personalised, real-time advice and

products and services for all financial and other relevant needs. Open banking offers

opportunities to add value

by connecting to the products and services of others, also in areas beyond banking. Statements regarding

ING’s

competitive position reflect the assessment of ING’s

management about the general competitive landscape in

which ING operates.

Regulation and Supervision

The banking and broker-dealer businesses of ING are subject to detailed and comprehensive supervision in all of

the jurisdictions in which ING conducts business.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Regulatory agencies and supervisors have broad administrative

power and enforcement capabilities over many

aspects of our business, which may include liquidity, capital adequacy,

permitted investments, ethical issues,

money laundering, anti-terrorism measures, privacy,

recordkeeping, product and sale suitability,

marketing and

sales practices, remuneration policies, personal conduct and our own internal governance

practices. Also,

regulators and other supervisory authorities in the EU, the US and elsewhere continue to scrutinise payment

processing and other transactions and activities of the financial services industry through laws and regulations

governing such matters as money laundering, anti-terrorism financing, tax

evasion, prohibited transactions with

countries or persons subject to sanctions, and bribery or other anti-corruption measures.

As discussed under “Item 3. Key Information — Risk Factors”,

as a large multinational financial institution we are

subject to reputational and other risks in connection with regulatory and compliance matters

involving these

countries.

European Regulatory framework

The Single Supervisory Mechanism (“SSM”) – the first pillar of the Banking Union – was launched on 4 November

Since that date, the European Central Bank (ECB) assumed responsibility for a

significant part of the

prudential supervision of banking groups in the Eurozone, including ING Group and ING Bank. Under the SSM, the

ECB has become ING Group’s and ING Bank’s

principal prudential supervisor. The

ECB is amongst others

responsible for tasks such as market access, compliance with capital

and liquidity requirements and governance

arrangements. National supervisors, including the Dutch Central Bank for

ING Group and ING Bank, remain

responsible for supervision of tasks that have not been transferred

to the ECB such as financial crime and

payment

supervision.

Another significant change in the regulatory environment is the setting up of the Single Resolution Mechanism

(“SRM”). It is the second pillar of the Banking Union. The SRM comprises the Single Resolution Board (“SRB”) and

the national resolution authorities and is fully responsible for the resolution of banks within the Eurozone as of 1

January 2016. ING has been engaging already with the Dutch national resolution authorities and the SRB for a

few years with the aim to support in the draw up of a resolution plan for

ING and will continue to collaborate

with the resolution authorities. The rules underpinning the SRM could have a significant impact on business

models and capital structure of financial groups in order to become resolvable.

As a third pillar to the Banking Union, the EU aims at further harmonizing regulations for Deposit Guarantee

Schemes (DGS).

Main elements are the creation of ex-ante funded DGS funds, financed by risk-weighted

contributions from banks.

As a next

step, the EU is discussing a pan-European (or pan-banking union) DGS (the

European Deposit Insurance Scheme (EDIS)), (partly) replacing or complementing national compensation

schemes. The progress on the EDIS proposal is slower than expected; this proposal as well as certain

accompanying risk reduction measures are still being discussed in the European Parliament

and in the Council.

Dutch Regulatory Framework

The Dutch regulatory system for

financial supervision consists of prudential supervision – monitoring the

soundness of financial institutions and the financial sector, and conduct

-of-business supervision – regulating

institutions’ conduct in the markets. As far as prudential supervision has not been transferred

to the ECB, it is

exercised by the Dutch

Central Bank (De Nederlandsche Bank or “DNB”), while conduct-of-business supervision is

performed by the Dutch Authority for the Financial Markets (Autoriteit

Financiële Markten or “AFM”). DNB is in

the lead with regard to macroprudential supervision.

Global Regulatory Environment

There is a variety of proposals for laws and regulations that

could impact ING globally, in particular those made

by the Financial Stability Board and the Basel Committee on Banking Supervision at the transnational level and an

expanding series of supranational directives and national legislation in the European Union (see “Item 3. Key

Information — Risk Factors — We

operate in highly regulated industries. Changes in laws and/or

regulations

governing financial services or financial institutions or the application of such laws and/or regulations governing

our business may reduce our profitability). The aggregated impact and possible interaction

of all of these

proposals are hard to determine, and it may be difficult to reconcile

them where they are not aligned. The

financial industry has also taken initiatives by means of guidelines and self-regulatory

initiatives.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Dodd-Frank Act and other US Regulations

ING Bank has a limited direct presence in the United States through the ING Bank Representative

Offices in New

York and Dallas, Texas.

Although the offices’ activities are strictly limited to essentially that of a marketing agent

of bank products and services and a facilitator (i.e. the offices may not take

deposits or execute any transactions),

the offices are subject to the regulation of the State of New York

Department of Financial Services and the Texas

Department of Banking, as well as the Federal Reserve. ING Bank also has a subsidiary in the United States, ING

Financial Holdings Corporation, which through several operating subsidiaries (one of which is registered

with the

CFTC as a swap dealer and another of which is registered with the U.S. Securities and Exchange

Commission as a

securities broker-dealer) offers various

financial products, including lending, and financial markets products.

These entities do not accept deposits in the United States on their own behalf or on behalf of ING Bank N.V.

Dodd-Frank Act, which became law on 21 July 2010, represented a significant overhaul

in the regulation of U.S.

financial institutions and markets. The primary impact on ING is through the establishment of a regulatory regime

for the off-exchange

derivatives market, pursuant to

Title VII of the Dodd-Frank Act.

Among other things, the Dodd-Frank Act and regulations enacted thereunder require swap

dealers to register

with the CFTC, the primary swaps regulator in the U.S.) as ‘swap

dealers’ and be subject to CFTC regulation and

oversight. The ING subsidiary,

ING Capital Markets LLC, is registered

as a swap dealer.

As a registered entity,

it is

subject to business conduct, record-keeping and reporting requirements,

as well as margin requirements and

capital requirements, which will become effective

in late 2021. In addition to the obligations imposed on

registrants (such as swap dealers), other requirements

relating to reporting, clearing, and on-facility trading have

been imposed for much of the off-exchange derivatives

market. It is possible that registration, execution,

clearing, margin, capital and business conduct compliance requirements will increase the costs of and restrict

participation in the derivative markets. These rules could therefore

restrict trading activity,

reducing trading

opportunities and market liquidity,

potentially increasing the cost of hedging transactions and the volatility of the

relevant markets. This could adversely

affect the business of ING in these markets.

The Dodd-Frank Act and SEC regulations enacted thereunder,

effective 1 November 2021, also require security-

based swap dealers to register with the SEC. The SEC has adopted

regulations, among others, establishing

registration, reporting, risk management, business conduct, and margin and capital

requirements for security-

based swaps. ING Capital Markets is expected to be registered

with the SEC as a security-based swap dealer.

Registration could increase ING Capital Markets

LLC’s operational costs, reduce trading activity

and market

liquidity, and increase volatility of the relevant

markets. It will also result in a substantial portion or all of ING’s

security-based swap activities with U.S. persons being conducted through ING Capital Markets

LLC.

In addition, new position limits requirements for uncleared swaps referencing

any of twenty-five commodity

futures contracts for market

participants could limit ING’s position sizes in these swaps

referencing specified

physical commodities and similarly limit the ability of counterparties to utilize certain

of our products to the

extent hedging exemptions from the position limits are unavailable.

The Dodd-Frank Act also impacts U.S. banks and non-U.S. banks with branches or agencies in the United States,

primarily through the Volcker Rule and the enhanced prudential standards

of Section 165 of the Dodd-Frank Act.

Because ING Bank does not have a U.S. banking presence, these provisions do not currently apply to ING.

The Dodd-Frank Act also created a new agency,

the Financial Stability Oversight Council (“FSOC”), an inter-agency

body that is responsible for monitoring the activities of the U.S. financial system, designating systemically

significant financial services firms and recommending a framework for substantially

increased regulation of such

firms, including systemically important non-bank financial companies that could consist

of securities firms,

insurance companies and other providers of financial services, including non-U.S. companies. ING has not been

designated a systemically significant non-bank financial company by

FSOC and such a designation currently is

unlikely.

Dodd-Frank continues to impose significant requirements on us, some of which may

have a material impact on

our operations and results, as discussed further under “Item 3. Key Information

— Risk Factors—We operate

highly regulated industries. Changes in laws and/or regulations governing

financial services or financial

institutions or the application of such laws and/or regulations governing our business may

reduce our

profitability”.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Basel III and European Union Standards as currently applied by ING Bank

DNB, our principal home country supervisor until the ECB took over that position in November 2014, has given

ING permission to use the most sophisticated approaches for solvency reporting

under the Financial Supervision

Act, the Dutch legislation reflecting the Basel II and Basel III Frameworks. DNB has shared information

with host

regulators of relevant jurisdictions to come

to a joint decision. In all jurisdictions where the bank operates

through a separate legal entity that is a credit institution, ING must

meet the local implementation of Basel

requirements as well. ING uses the Advanced IRB Approach for credit risk, the Internal

Model Approach for its

trading book exposures and the Advanced Measurement Approach for

operational risk. A small number of

portfolios including certain sovereign exposures are reported

under the Standardized Approach

In December 2010, the Basel Committee on Banking Supervision announced higher global minimum capital

standards for banks, and has introduced a new global liquidity standard

and a new leverage ratio. The Basel

Committee's package of reforms, collectively

referred to as the “Basel III” rules, has, among other requirements,

increased

the amount of common equity required to be held by subject banking institutions, has prescribed

the

amount of liquid assets and the long term funding a subject banking institution must hold at any given moment,

and has limited leverage. Banks are required to

hold a “capital conservation buffer” to withstand

future periods

of stress. Basel III has also introduced a “countercyclical

buffer” as an extension of the capital conservation

buffer,

which permits national regulators to require banks to

hold more capital during periods of high credit

growth (to strengthen capital reserves and moderate

the debt markets). Further,

Basel III has strengthened the

definition of capital that has the effect of gradually disqualifying many hybrid

securities during the years 2013-

2022, including the hybrids that were issued by the Group, from inclusion in regulatory capital,

as well as the

higher capital requirements associated with certain business conditions (for

example, for credit value

adjustments (“CVAs”) and illiquid collateral)

as part of a number of reforms to the Basel II framework. In addition,

the Basel Committee and Financial Stability Board (“FSB”) published measures that have had the effect

requiring higher loss absorbency capacity, liquidity surcharges,

exposure limits and special resolution regimes for,

and instituting more intensive and effective

supervision of, “systemically

important financial institutions”

(“SIFIs”), in addition to the Basel III requirements otherwise applicable to most financial institutions. One such

measure, published by the FSB in November 2015, is the Final Total

-Loss Absorbing Capacity (‘TLAC’) standard for

G-SIFIs, which aims for G-SIFIs to have sufficient loss-absorbing and recapitalisation

capacity available in

resolution. ING Bank has been designated by the Basel Committee and FSB as a so-called “Global Systemically

Important Bank” (“G-SIB”), since 2011, and by DNB and the Dutch Ministry of Finance as a “other SII” (“O-SII”)

since 2011. DNB requires ING Group to hold a 2.5% O-SII Buffer in addition to the capital conservation

buffer and

the countercyclical buffer described above

CRR /CRD IV

For European banks the Basel III requirements have been implemented

through the Capital Requirement

Regulation (CRR) and the Capital Requirement Directive (“CRD IV”). The CRD IV regime entered into

effect in

August 2014 in the Netherlands, but not all requirements were implemented all at once. Having

started in 2014,

the requirements have been gradually tightened, mostly

before 2019, until the Basel III migration process was

completed.

CRD IV has not only resulted in new quantitative requirements but has also led to the setting

of new standards

and evolving regulatory and supervisory expectations in the area of governance, including with regard

to topics

like conduct and culture, strategy and

business models, outsourcing and reporting accuracy.

CRRII / CRD V and BRRDII

On 27 June 2019, a series of measures referred to as the Banking Reform

Package (including certain amendments

to CRR and CRDIV commonly referred to as ‘CRR II’ and CRD V’) came into force,

subject to various transitional

and staged timetables. The adoption of the Banking Reform Package

concluded a process that began in

November 2016 and marks an important step toward

the completion of the European post-crisis regulatory

reforms, drawing on a number of international standards

agreed by the Basel Committee, the Financial Stability

Board and the G20. CRDV was implemented in Dutch law in 2020. The Banking Reform Package

updates the

framework of harmonized rules established following the

financial crisis of 2008 and introduces changes to the

CRR, CRDIV, the Bank Recovery

and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation

(SRMR). The Banking Reform Package covers

multiple areas, including the Pillar 2 framework, the introduction of

a leverage ratio requirement

of 3% and a leverage ratio buffer requirement

of 50% of the G-SIB buffer

requirement (applicable per 1 January 2023), a binding Net Stable Funding (NSFR) ratio based on the Basel NSFR

standard but including adjustments with regard to e.g. pass-through

models and covered bonds issuance,

mandatory restrictions on distributions, permission for reducing own funds and eligible liabilities,

macroprudential tools, a new category of ‘non-preferred’

senior debt, the minimum requirement for own funds

and eligible liabilities (MREL) and the integration of the TLAC standard into EU legislation. Further,

the EBA

obtained a mandate to investigate

how to incorporate environmental,

social, and governance (ESG) risks into the

supervisory process and what the prudential treatment of assets associated with environmental

or social

objectives should look like.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Whilst the Banking Reform Package

was being developed, the ECB introduced the Targeted

Review of Internal

Models (TRIM) in June 2017 to assess reliability and comparability between banks’ models for calculating each

bank’s risk-weighted

assets (‘RWA’)

used for determining certain of such bank’s capital

requirements. In July

2019, the ECB published the final chapters of the guide to internal models, covering credit risk, market

risk and

counterparty credit risk. These risk type-specific chapters are intended to

ensure a common and consistent

approach to the most relevant aspects of the regulations on internal

models for banks directly supervised by the

ECB. Additionally, they provide

transparency on how the ECB understands the regulations on the use of internal

models to calculate own funds requirements for the three risk types. Impact on ING is through

more stringent

regulation on the end-to-end process and governance around internal models as well as an increase

of risk

weighted assets (RWA).

In 2020, the last TRIM ECB inspection ended. Per rating system

the ECB has sent and will send final TRIM decision

letters, which will include obligations that ING shall remediate.

Also certain limitations have or might be put in

place until these obligations are fully addressed and closed.

Basel III revisions and upcoming regulations

In December 2017, revisions to Basel III were formally announced by the Basel Committee. These revisions to

Basel III establish new prudential rules for banks, including a revision to the standardised

approach to credit risk,

the introduction of a capital floor based on standardised approaches, the use of internal models, limitation

options for modelling operating risks, and new rules for the establishment

of risk-weighted items and unused

credit lines at the banks. Such revisions have a long implementation phase and are

not yet fully transposed into

EU regulation. The revisions are commonly referred

to as "Basel III Reform" or "Basel IV”.

In Europe, this will be

implemented through the ‘CRR III’ / ‘CRD VI’ in the coming years. With this long implementation phase and the

transposition into EU regulation still pending, some question marks remain on how this will shape up.

The full impact of the Basel III Reform rules and TRIM, and any additional requirements if and as applicable to the

Group, will depend on how they are implemented by national regulators,

including the extent to which such

regulators and supervisors can set more stringent

limits and additional capital requirements or surcharges, as

well as on the economic and financial environment at the time of implementation and beyond. We

expect these

rules could have a material impact on ING’s

operations and financial condition and may require the Group to

seek additional capital.

Final Basel III reforms

In December 2017 the Basel Committee finalised its Basel III post-crisis reforms with the publication of the

revisions to the prudential standards for credit, operational

and credit valuation adjustment (CVA)

risk as well as

the introduction of an output floor.

This package of reforms aims to increase consistency

in risk-weighted asset

calculations and improve the comparability of banks’ capital ratios.

The use of internal models will be reduced

and the standardised approaches will be made more risk-sensitive and granular.

Following a one-year deferral due to

COVID-19, these reforms will take

effect from 1 January 2023 and will be

phased in over five years. The EU Commission postponed the issuance of its legislative proposal (“CRR3”/”CRD6”)

to implement the final elements of the Basel III framework in the EU until 2021. The implementation date of

“CRR3/CRD6” is therefore not yet decided on. The implementation of the EU/Basel III reforms

will have impact

on ING’s risk-weighted

assets and capital ratios, but it is expected that other new banking regulations and

model

reviews bring forward a significant part of this impact before

the EU implementation date.

CRR “quick fix” in response to the Covid‐19 pandemic

On 26 June 2020 Regulation (EU) 2020/873 of the European Parliament and of the Council of 24 June 2020

amending Regulations CRR as regards certain adjustments in response

to the COVID-19 pandemic (commonly

referred to as CRR ”quick

fix”) was published.

The CRR ”quick fix” is part of a series of measures taken by European institutions to

mitigate the impact of the

COVID-19 pandemic on institutions across EU Member States. In addition to the flexibility already provided

in the

existing rules, the CRR ‘quick fix’ introduces certain adjustments to the CRR, including temporary

measures and

measures that early adopt changes in the regulations that were intended to

become effective at a future date.

This notably included reduced capital requirement for certain exposures

to small- and medium sized enterprises

(SMEs), a more favourable prudential treatment

for certain software assets, one year delay in the application of

the leverage ratio buffer

requirement of 50% of the G-SIB buffer (to 1 January 2023). Also the following

adjustments were introduced have

an impact on disclosures:

●

frontloading from CRR2 the possibility of temporarily excluding certain

exposures to central banks from

the calculation of an institution’s total

exposure measure (Article 500b of CRR);

●

extending by 2 years transitional arrangements

for mitigating the impact on own funds of the

introduction of IFRS 9 (Article 473a (8) of CRR).

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

In August 2020, the EBA issued guidelines to provide institutions with the necessary clarifications on how to apply

the measures set out in the CRR ‘quick fix’ supervisory reporting and disclosures. These Guidelines are an interim

solution until the new comprehensive ITS on disclosure start to apply (June 2021).

Capital requirements applicable to ING Group at

a consolidated level

In accordance with the CRR the minimum Pillar I capital requirements applicable to ING Group are:

a Common

Equity Tier 1 (CET1) ratio of 4.5%, a Tier 1 ratio of 6% and a Total

capital ratio of 8% of risk-weighted

assets.

In 2020, as a reaction to the COVID-19 pandemic, relevant regulators

introduced a number of changes to the

Pillar II capital requirements and the capital buffer

requirements applicable to ING, including structural

reductions. The structural reductions of these capital requirements reflect

the application of Art.104a in CRD V,

which allowed ING to replace CET1 capital with additional Tier 1 / Tier 2 securities to meet Pillar II requirement,

and a reduction in the overall systemic buffer

(i.e. the Systemic Risk Buffer plus the highest of the O-SII and G-SII

buffer) by the Dutch National Bank from 3% to 2.5%. Similarly,

various competent authorities changed or

removed their Countercyclical Buffer

(CCyB) requirements reducing the CCyB for ING from 24 basis points to 3

basis points.

As a consequence, the CET1 requirement, including buffers, for ING Group

at a consolidated level was 10.51% in

This requirement is the sum of a 4.5% Pillar I requirement, a 0.98% Pillar II requirement (2019: 1.75%), a

2.5% Capital Conservation Buffer (CCB), a 0.03% Countercyclical

Buffer (CCyB) (based on December 2020

positions) and a 2.5% O-SII buffer that is set separately for Dutch

systemic banks by the Dutch Central Bank (De

Nederlandsche Bank). This requirement excludes the Pillar II guidance, which is not disclosed.

The Maximum Distributable Amount (MDA) trigger level stood at 10.51% in 2020 for CET1, 12.33% for

Tier 1

Capital and 14.77% for Total

Capital (after the application of Art.104a of CRDV), based on stable Pillar II capital

requirements. In the event that ING Group breaches the MDA

level, ING may face restrictions on dividend

payments, AT1

instruments coupons and payment of variable remuneration.

Covid-19 pandemic

Various countries and local governmental

authorities across the world have introduced measures aimed at

preventing the further spread of Covid-19.

In addition, governments in various countries have introduced

measures aimed at mitigating the economic

consequences of the outbreak. For example, the Dutch government

has announced economic measures aimed at

protecting jobs, households’ wages and companies, e.g., by way of tax payment

holidays, guarantee schemes and

a compensation scheme for heavily affected sectors

in the economy. These announced measures and any

additional measures, including any payment holidays with respect to mortgages

or other loans, have had and

may continue to have a significant impact on ING’s

customers and other counterparties.

The various measures by governments and ING to alleviate the impact of Covid-19 also impact the loan

classification in terms of forbearance and consequently IFRS 9 staging.

In light of this, the EBA has provided

guidelines that expired on 30 September 2020, which defined eligibility criteria for a payment

holiday

arrangement offered to a large

group of customers to be classified as a “general

payment moratorium”.

Based on

these guidelines, customers that were granted

the payment holidays did not lead to a forbearance classification.

Therefore it did not automatically trigger recognition of lifetime

Expected Credit Loss (ECL) either.

ING followed

the EBA guidelines and when a payment holiday was provided to a customer as part of a “general

payment

moratorium”,

ING did not consider this measure to classify as forbearance. EBA further extended these

guidelines in the first week of December 2020, valid until 31 March 2021, with certain extra conditions.

Regarding these extensions, ING

has taken a prudent decision to treat all payment

holiday requests under new

or extended schemes (after

September 2020) as stage 2 or stage 3 exposures.

Bank recovery and resolution directive

Since its adoption by the European Parliament in 2014, the Bank recovery and resolution directive (BRRD) has

become effective in all EU countries after transposition

into national law,

including in the Netherlands. The BRRD

aims to safeguard financial stability and minimise the use of public funds in case banks face financial distress

fail to comply with the BRRD. Banks across the EU need to have

recovery plans in place and need to cooperate

with resolution authorities to determine, and make feasible, the preferred

resolution strategy.

The banking

reform which came into force on 27 June 2019 includes changes to

the minimum requirement for own funds and

eligible liabilities (MREL) to ensure an effective bail in process. It also includes new competences for

resolution

authorities and requires G-SIBs and other banks to build up loss-absorbing and recapitalization capacity.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

ING has had a recovery plan in place since 2012. The plan includes information on crisis governance, recovery

indicators, recovery options, and operational

stability and communication measures. The plan enhances the

bank’s readiness and decisiveness in case of a financial crisis. The plan is updated annually to

make sure it stays

fit for purpose. The completeness, quality and credibility of the updated plan is assessed each year by ING’s

regulators.

The Single Resolution Board (SRB) confirmed to ING in 2017 that a single-point-of-entry (SPE) strategy

is ING’s

preferred resolution strategy,

with ING Groep N.V.

as the resolution entity.

In 2019, ING Group received a formal notification from De Nederlandsche Bank (DNB) of its MREL. The MREL

requirement has been established to ensure that banks in the European Union have

sufficient own funds and

eligible liabilities to absorb losses in the case of potential bank failure. The MREL requirement is set for

ING

Group at a consolidated level, as determined by the Single Resolution Board (SRB). This MREL requirement

has

been set at 10.54% of total liabilities and own funds. The current MREL requirement is not binding, but a new

MREL requirement will be determined by ING’s

resolution authorities in 2021 based on the BRRD II.

ING has been replacing, and will continue to replace, maturing ING Bank N.V.

debt with ING Groep N.V.

instruments. In order to build up our MREL capacity,

ING Groep N.V.

issued multiple transactions. These

transactions will not only allow us to support business growth, but will also help to meet future MREL and TLAC

requirements with ING Groep N.V.

instruments only.

CRR II implements the Financial Stability Board’s total

loss absorbing (TLAC) requirement for Global Systemically

Important Institutions (G-SII), which is the EU equivalent of a G-SIB. The transitional requirement—the higher of

16 percent of the resolution group’s

Risk weighted assets (RWA) or six percent

of the leverage ratio exposure

measure—applies immediately. The higher requirement

—18 and 6.75 percent, respectively—comes into effect

as of January 1, 2022. As a G-SII ING is expected to meet the TLAC requirement alongside the other minimum

regulatory requirements set out in EU regulation.

Stress testing

Stress testing is an integral component of our risk and capital management

framework. It allows us to (i) assess

potential vulnerabilities in our businesses, business model, and/or portfolios; (ii) understand

the sensitivities of

the core assumptions in our strategic and capital plans; and (iii) prepare

and assess management actions that can

reduce or mitigate the impact of adverse scenarios.

In addition to running internal stress test scenarios to reflect the outcomes

of the annual risk assessment, ING

also participates in regulatory stress test exercises.

ING participated in the 2020 EU-wide stress test conducted by

the EBA in cooperation with the European Central Bank (ECB), the Dutch

central bank (DNB), the European

Commission and the European Systemic Risk Board (ESRB). The baseline scenario was developed by the ECB and

the adverse stress test scenario by the ESRB, both cover

a three-year time horizon (2020-2022). The ECB and the

EBA decided in March 2020 to postpone the EU-wide stress test exercise

due to the outbreak of COVID-19. EBA

will launch a new stress test exercise in January 2021 and is expected

to publish the results by July 2021.

The last EU-wide stress test exercise

that was completed concerns the 2018 edition. This stress test was carried

out applying a static balance sheet assumption as of December 2017, therefore does not take

into account

current or future business strategies and management

actions. The results of this stress test also cover a three-

year horizon (2018-2020) and reflect the impact of IFRS 9 for determining loan loss provisions

in adverse

circumstances. The results of the EBA stress test reaffirmed

the resilience of our business model and the strength

of ING’s capital base. Our commitment to

maintain a robust, fully-loaded Group common equity Tier 1 (CET1)

ratio in excess of prevailing requirements

remains. ING started the EU-wide stress test exercise

with a CET1 ratio

of 14.51% per 2017 year-end. Under the hypothetical baseline scenario and EBA’s

methodological instructions,

ING Group would have a fully loaded CET1 of 13.99% in 2020. Under the hypothetical adverse scenario and EBA’s

methodological instructions, ING Group would have a fully loaded CET1 ratio of 10.70% in 2020 without

management actions.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Deposit Schemes

In the Netherlands and other jurisdictions, deposit guarantee schemes and similar funds (‘Compensation

Schemes’) have been implemented from which compensation may become payable

to customers of financial

services firms in the event the financial service firm is unable to pay, or unlikely

to pay,

claims against it. In many

jurisdictions in which we operate, these Compensation Schemes are funded, directly or indirectly,

by financial

services firms which operate and/or are licensed in the relevant jurisdiction. ING Bank is a participant in the

Dutch Deposit Guarantee Scheme (‘DGS’), which guarantees an amount

of EUR 100,000 per person per bank

(regardless of the number of accounts held). On the basis of the EU Directive on deposit guarantee schemes, ING

pays quarterly risk-weighted

contributions into a DGS-fund.

The DGS-fund is to grow to a target size of 0.8% of

all deposits guaranteed under the DGS, which is expected to be reached in July 2024. In case of failure of a Dutch

bank, depositor compensation is paid from the DGS-fund. If the available financial means of the fund are

insufficient, Dutch banks, including ING, may be required pay to

extraordinary ex-post contributions not

exceeding 0.5% of their covered deposits per calendar year.

In exceptional circumstances and with the consent

of the competent authority,

higher contributions may be required. However,

extraordinary ex-post contributions

may be temporarily deferred if,

and for so long as, they would jeopardise the solvency or liquidity of a bank.

Since 2015, the EU has been discussing the introduction of a pan-European deposit guarantee scheme (‘EDIS’),

(partly) replacing or complementing national compensation schemes in two or three phases. Proposals contain

elements of (re)insurance, mutual lending and mutualisation of funds. The new model is intended to be ‘overall

cost-neutral’.

Discussions have continued in 2020, but it remains uncertain when EDIS will be introduced.

Payment Services Directive 2 (PSD2)

PSD2 entered into force in January 2018 and responds to technical

change and a variety of developments in the

payments domain. It fosters innovation

and competition by promoting non-discriminatory access to payment

systems and accounts, including the newly introduced account

information services and payment initiation

services.

Customers benefit from greater transparency

of costs and charges, PSD2's extended geographical reach

and being applicable to transactions in any currency,

a reduction of the maximum liability for unauthorized

transactions and a backstop date for complaint resolution.

Finally, to combat

cybercrime and online fraud, PSD2

continues the trend towards enhancing the security around the making of payments,

e.g. by the introduction of

strong customer authentication. It consists of two factor

authentication, to be performed every time a payer

accesses its payment account online or initiates electronic remote payment

transactions. The Regulatory

Technical Standards

for strong customer authentication and common

and secure communication provide further

requirements to implement the strict security requirements

for payment service providers in the EU.

Benchmark Regulation

Benchmarks, such as the London Interbank Offered Rate (‘LIBOR’), the Euro

Overnight Index Average (‘EONIA’),

the Euro Interbank Offered Rate

(‘EURIBOR’) and other interest rates,

as well as commodity benchmarks or other

types of rates and indices which are deemed to be ‘benchmarks’ are the subject of ongoing national and

international regulatory reform.

In 2016, the EU adopted a Regulation (the ‘Benchmarks Regulation’ or ‘BMR’) on indices used in the EU as

benchmarks in financial contracts and financial instruments. The Benchmarks Regulation became effective

on 1

January 2018.

The BMR among others requires that supervised entities may only use benchmarks in the EU if these benchmarks

are provided by administrators

that are registered with the European Securities and Markets

Authority (‘ESMA’).

Benchmarks that are based on input from contributors shall have

a code of conduct in place designed primarily to

ensure reliability of input data, governing issues such as conflicts of interest,

internal controls and benchmark

methodologies. Financial contracts and financial instruments in which benchmarks are used by supervised

entities require to have robust fall

back wording included in their documentation.

Public authorities have initiated industry working groups in various jurisdictions to search

for and recommend

alternative risk-free rates

that could serve alternatives if current benchmarks like

LIBOR and EONIA cease to exist

or materially change. The work of these working groups is still ongoing, though certain of such organizations

have

advanced proposals for benchmark replacements.

The market has indicated that it will stop the calculation of certain

benchmarks and that they will proceed with

the use of risk free rates as benchmarks. For instance the FCA announced that

it will no longer persuade or

compel banks to submit rates for the calculation of the LIBOR benchmark after 2021. The FCA and Bank of

England are working together with market participants on the transition

to use SONIA as the primary interest

rate benchmark in sterling markets.

Furthermore, the working group on euro risk-free

rate has adopted the euro

short-term rate (€STR), which was published for

the first time on 2 October 2019, as a replacement for the EONIA

benchmark that will be discontinued by the end of 2021. The US Federal Reserve’s

Alternative Reference Rates

Committee (commonly referred to

as ‘ARRC’) has recommended adoption of the Secured Overnight Financing

Rate (commonly referred to as ‘SOFR’) as an alternative

to US dollar LIBOR.

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Financial Transaction Taxes

In February 2013, the EC adopted a proposal setting out the details of a financial transaction tax

(‘FTT’) under the

enhanced cooperation procedure, to be levied on transactions in financial instruments

by financial institutions if

at least one of the parties to the transaction is established in the financial transaction tax zone

(‘FTT-Zone’) or if

the instrument which is the subject of the transaction is issued within the territory of a Member State in the FFT-

Zone. 10 Member States have indicated

they wish to participate in the FTT (Austria, Belgium, France, Germany,

Greece, Italy,

Portugal, Slovakia, Slovenia and Spain). The initial proposal contemplated

that the FTT would enter

into effect on 1 January 2014, which would have then required us to

pay a tax on transactions in financial

instruments with parties (including Group affiliates) located in such FTT-zone. However,

the FTT remains subject

to negotiation between the participating Member States and currently

it is uncertain whether and in what form

and by which Member States the FTT will be adopted. The implementation date of any FTT will thus depend on

the future approval by participating Member States in the Council, consultation

of other EU institutions, and the

subsequent transposition into local law.

KYC Requirements

Compliance with applicable laws and regulations is resource-intensive. Banks

continue to be faced with new and

increasingly onerous regulatory requirements. Generally,

we expect the scope and extent of regulations in the

jurisdictions in which we operate to continue to increase.

An example is the implementation of DAC6 which like

FATCA

and CRS requires financial institutions to report

detailed client-related information

to the competent authorities. Customer due diligence (CDD), (sanctions)

screening and transaction monitoring impose requirements on financial institutions to maintain

appropriate

policies, procedures and controls to detect, prevent

and report to the competent authorities on e.g. money

laundering and terrorist financing.

The increasing regulatory scrutiny drives the need to continuous change in the various processes,

procedures and

IT systems. In some situations the applicable laws and regulations, at local and/or

at global level, seem to be

conflicting with each other, which imposes a significant

challenge on banks as part of the implementation of

requirements. In addition, the timeline for implementation of those new/changed

requirements is sometimes

very short, which is challenging in general, yet especially in IT development. ING aims to continuously work on

embedding the processes and procedures reflecting the applicable requirements in our IT systems

and data

sources, driving a business environment which is compliant by desire and design, and will execute

ongoing

training and awareness to develop its people to have

the right knowledge and skills.

That also accounts for risks deriving from new technologies. ING aims to continuously monitor regulatory

developments to make risk assessments and define the banks risk appetite.

Regulations on distributed ledger

technology and business developments in this area are as rapid and impactful as the accompanying risks.

5th AML Directive

In addition, the 5th AML Directive will be implemented in the Netherlands. The 5th AML Directive was originally

adopted by the EU Council in June 2018, with the aim of addressing means of terrorist financing, increasing

transparency to combat money laundering and helping to strengthen

the fight against tax avoidance. The most

important aspects of the 5th AML Directive involve the (anti money-laundering)

risks relating to the use of virtual

currencies, the improvement of information exchange

between supervising authorities, and the introduction of

beneficial ownership registers for corporate

and other legal entities.

ING expects to revise the KYC policy framework to

reflect the requirements of the 5th AML Directive. Prior to the

adoption of the 5th AML Directive, European supervisory authorities (ESAs) had previously issued their final

guidelines on risk factors, which came into force

in June 2018. These guidelines promote a common

understanding of the risk-based approach to

anti-money laundering/combatting terrorist financing (AML/CFT)

and set out how it should be applied in the context of the 4th AML Directive. These guidelines are currently in the

process of being updated, in order to support firms’ AML/CFT compliance efforts and enhance the ability of the

EU’s financial sector to effectively

deter and detect money laundering/terrorist financing. The ESAs published a

consultation version of the updated guidelines on 5 February 2020. The final updated guidelines are expected

come into force in the course of 2020. Furthermore, in September

2017, the ESAs issued their final guidelines to

prevent the abuse of funds transfers for

terrorist financing and money laundering purposes. These guidelines

came into force in June 2018.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Policy with respect to certain countries

As a result of frequent evaluation of all businesses from economic, strategic

and risk perspective ING continues

to believe that for business reasons doing business involving certain specified countries should be discontinued.

In that respect, ING has a policy not to enter into new relationships with clients from

these countries and

processes remain in place to discontinue existing relationships involving

these countries. At present these

countries are Cuba, Iran, North Korea, Sudan and Syria.

IING Bank maintains a limited legacy portfolio of guarantees,

accounts, and loans that involve various entities

with a connection to Iran. These positions remain on the books but certain accounts related thereto

are ‘frozen’

where prescribed by applicable laws and procedures and in all cases subject to increased scrutiny

within ING

Bank. ING Bank may receive loan repayments, duly authorised by the relevant

competent authorities where

prescribed by applicable laws. For the calendar year 2020, ING Group had revenues

of approximately USD 274

thousand. ING Group estimates that it had a net profit of approximately

USD 17 thousand.

Sanctions related developments

In 2020, the EU and the US continued sanctions programs with respect to several regions and countries,

including

Ukraine/Russia, Iran, China, Venezuela

and Syria. There are notable differences between

the EU and US sanctions

programs.

The US, for example, continued and updated its sanctions with respect to the Nord

Stream 2 pipeline and the

second line of Turkstream,

both originating in Russia. Also with respect to Iran, where a significant number of EU

sanctions were lifted pursuant to the Iran Nuclear Agreement, the

US continued to take various measures in light

of its ‘maximum pressure campaign’ against Iran and all major Iranian

financial institutions are now designated

by OFAC.

Tensions between

the US and China continued, resulting in (additional) sanctions and export controls imposed by

the US, amongst others in response to China’s alleged

human rights abuses in Hong Kong and against China’s

Uyghur minority population. In addition, the U.S. Department of Commerce’s

Bureau of Industry and Security

(BIS) continued applying U.S. export controls on dual-use goods, software, and technology,

and it imposed a

number of significant new controls on trade with China and Hong Kong. BIS also added several

entities on the

Entity List under the US Export Administration Regulations, and thereby further tightened

the export control

regime in that respect. In response, China has announced to take resolute

countermeasures deemed required to

safeguard the legitimate rights and interests

of Chinese companies and related personnel as well as China’s

sovereignty,

security and development interests. These announced Chinese actions include visa restrictions and

potentially other measures firmly opposing US sanctions.

The US issued criminal indictments against President Maduro and several other high-level

officials of the

Venezuelan government. In addition, the US government

further restricted dealings with the Venezuela’s

oil

sector and imposed sanctions on certain parties included in the sale and transport of Venezuelan crude.

In respect of Syria, the US continued to pressure the Assad regime as well as other actors

in the region to stop

committing human rights abuses against the Syrian civilian population.

The EU blocking regulation remained in full force in 2020. This EU regulation aims to shield EU companies from

U.S. sanctions against Iran, Cuba

and Libya, in part by prohibiting European companies from complying with the

sanctions that the EU considers to be “extraterritorial”

in nature.

With a view to these and other developments, ING continuously evaluates its sanctions compliance controls

respond to risks of new or expanding sanctions regimes.

For additional information regarding regulatory

developments, including with respect to the 5th AML Directive,

FATCA,

CRS, DAC6 and MIFID II, see also this Form 20F 2020, under “Additional

Information – ING Group Risk

Management-

Compliance Risk- Regulatory

Developments”.

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information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

C. Organisational structure

ING Groep N.V.,

a publicly-listed company,

is the parent of one main legal entity: ING Bank N.V.

(ING Bank).

ING

Bank is the parent company of various Dutch and foreign banking and other subsidiaries.

Reference is made to Exhibit 8 “List of subsidiaries of ING Groep N.V.”

for a list of principal subsidiaries of ING

Groep. N.V.

For the majority of ING’s principal subsidiaries, ING Groep N.V.

has control because it either directly

or indirectly owns more than half of the voting power.

For subsidiaries in which the interest held is below 50%,

control exists based on the combination of ING’s

financial interest and its rights from other contractual

arrangements which result in control over the operating

and financial policies of the entity.

Property, plants and equipment

ING predominantly leases the land and buildings used in the normal course of its business. In addition, ING has

invested in land and buildings. Management believes that ING’s

facilities are adequate for its present needs in all

material respects.

For information on property,

plants and equipment, reference is made to Note 9 ‘Property

and equipment’, for

information on lease liabilities reference is made to Note

16 ‘Other liabilities’ and for information on investment

properties reference is made to Note 11 ‘ Other

assets’ in the consolidated financial statements.

Item 4A.

Unresolved Staff

comments

Not applicable.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Item 5.

Operating and financial review

and prospects

The following operating and financial review and prospects should be read in conjunction with the consolidated

financial statements and the related Notes thereto

included elsewhere herein. The consolidated financial

statements have been prepared

in accordance with IFRS-IASB. Unless otherwise indicated, financial information

for ING Group included herein is presented on a consolidated basis under IFRS-IASB.

Operating results

Our business is shaped by events and developments in the world around us and our operating results for the

financial year should be viewed in the context of these event and developments. The biggest of these in 2020

was the coronavirus pandemic, which was first and foremost

a human tragedy,

but which also impacted

governments, economies, supply chains and jobs.

ING has had to adapt to the practical implications this had for customers

and employees, as well as to the new

market trends and stakeholder

expectations. At the same time, our business continues to be affected

regulatory changes and the persistent low interest

rate environment For further information

on regulatory

changes reference is made to “Item 4. Information

on the Company – Regulation and Supervision”.

Other material events and uncertainties that have an impact on our operating

results are:

●

Covid-19 pandemic

●

Marco economic developments

●

Climate change

●

Financial crime risk

●

Cybersecurity resilience

●

Fluctuations in equity markets, interest rates

and foreign exchange rates

For further information on other factors that can

impact ING Group’s results of operations,

reference is made to

“Item 3. Key information - Risk Factors”.

Covid-19 pandemic

Covid-19 was declared a global pandemic by the World Health Organization

on 11 March 2020. National and local

governments across the world introduced measures aimed at preventing

the further spread of the virus. These

included the closure of schools, sports facilities, bars and restaurants; bans on public events;

and travel

restrictions and border controls. Such measures disrupted the normal flow of business operations

in most

countries, including those where ING operates. It affected

global supply chains, manufacturing, tourism,

consumer spending and asset prices, and has increased volatility and uncertainty across the global economy and

in financial markets.

In an effort to mitigate the economic consequences, governments

introduced measures to protect households

and companies. These included tax-payment holidays, guarantee

schemes and compensation for heavily affected

sectors in the economy.

Still, the economic consequences had – and may continue to have – a significant impact

on ING’s customers, employees,

shareholders and other stakeholders.

There were also regulatory developments in light of Covid-19. The European and other central

banks took steps

to help by relaxing rules on capital buffers that

banks need to hold and made recommendations on paying

dividends, which remain in effect until at least September 2021. This gives banks more

buffer capital available to

lend to businesses during coronavirus restrictions, and to absorb losses when businesses can’t repay

those loans.

The European Central Bank (ECB) also undertook various monetary policy measures to

provide liquidity to the

economy and banks in particular.

ING also took steps to protect and provide relief for

our customers, employees and communities. For example,

we offered customers payment

holidays and provided business clients with liquidity.

We worked hard to

safeguard the wellbeing of our employees. We

built on our digital foundation and equipped employees with the

necessary facilities to work from home without interrupting the high standards of service we offer

customers. For

communities, we encouraged our businesses and employees to donate time and funds to help address the initial

challenges the coronavirus brought, as well as looking towards

the future and how we can help build back better.

Macroeconomic developments

As a global financial services company, our profitability,

solvency and liquidity are influenced by the state of the

economy and the market environment

for business, liquidity, funding and capital.

The year’s volatility had a

marked impact on our performance.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

The Covid-19 pandemic threw the world economy into turmoil. The global economy shrank

in 2020 as demand

and supply, trade, and finance were

severely disrupted. Although we started to see a recovery

mid-year as

lockdowns were relaxed,

a second wave of the virus caused governments to slow reopening and/or

re-impose

lockdowns, and the economic recovery lost momentum. In most advanced

economies, despite effective

monetary and fiscal policy support, output remained substantially below pre-pandemic levels.

Western European economies were

hit hard by the coronavirus pandemic and associated mobility-reducing

measures. In Germany,

the Netherlands and Belgium, economic activity in the first half of 2020 dropped by 10-

15%. Economic activity in the second quarter

of 2020 recorded the largest contractions since World

War II.

Following a rapid implementation of sizeable policy support measures and after

most economic activities were

allowed to resume (subject to social distancing and hygiene measures), the economic

environment turned more

favourable during the summer.

However,

despite a strong economic rebound in the third quarter,

the level of

economic activity at the end of the year was still below year-end 2019 levels as a resurgence of

new coronavirus

cases necessitated the re-imposition of lockdown measures.

Helped by job retention schemes, the rise in unemployment was relatively mild and levelled off in

the second half

of the year.

Despite the unemployment rate having increased, housing markets

remained firm, helped by interest

rates remaining low.

There was an asymmetric impact across the euro area, with southern countries (Spain, Italy)

generally hit the

hardest during the first wave of the coronavirus.

This was partly due to the variation in the length and strictness

of containment measures, the size of discretionary fiscal support, and differences

in the economic importance of

international tourism.

As in the eurozone, economic performance in Poland was heavily

influenced by lockdown measures, the

introduction of job protection schemes and increased public expenditure. Uncertainty

about domestic factors

and the economic recovery held back private investment,

as in most other European countries. The central bank

of Poland reduced the benchmark interest rate

to 0.1% and purchased assets in the secondary market to improve

banks’ liquidity.

Additional economic uncertainty came from continuing US-China trade tensions and the US elections in

November.

To help ING’s

leadership in their strategic planning, we developed scenarios for various potential

outcomes to these developments so we are better prepared

for different possible futures. The ongoing negative

interest rate environment

is also making it a priority for ING to diversify our income.

Large amounts of fiscal stimulus deployed by governments worldwide in 2020

were combined with monetary

stimulus. The US Federal Reserve lowered key

interest rates and the ECB stepped

up bond purchasing. In the

eurozone, the yield curve flattened. In general,

the euro appreciated compared with its main trading partners,

reflecting perceived changes in global risk sentiment and interest

rate developments. Towards

the end of the

year,

positive news about vaccines improved financial market sentiment,

although a strong eruption of new

coronavirus cases and the emergence of new,

more contagious variants are sobering the economic outlook.

Uncertainty around the future relationship between the European Union and the United Kingdom

continued

throughout the year,

compounding the impact of Covid-19, which weakened the British pound vis-à-vis the euro.

In July, we announced that due to Brexit

we will move ING’s European trading

activities from London to

Amsterdam. The successful conclusion of an EU/UK-trade deal at year-end

avoided economic disruption at the

start of 2021.

China regained control of the outbreak of the coronavirus

relatively swiftly by implementing strict sanitary and

economic measures, and in the second half of the year almost all activities had restarted and exceeded

pre-

pandemic levels. However,

the number of cases began increasing again towards the end of 2020 and beginning of

2021.

Australia was hit less severely by the coronavirus

pandemic than other countries. The Australian authorities

introduced considerable fiscal and monetary support to the economy.

The central bank reduced its policy rate

and three-year Australian government bond yield target

to 0.1% and extended its long-term, low-cost funding to

banks to boost business loans. The central bank also introduced an asset purchase programme

targeted at long-

term bonds to ease further financial conditions.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Climate change

Climate change is one of the world’s most

urgent problems. The International Monetary Fund (IMF) says

it will

have a potentially catastrophic

environmental, human and economic toll if left unaddressed. We

believe that ING

can make the biggest impact in fighting climate change through our financing.

We work with our clients to finance and facilitate

their transition to low-carbon technologies. We’ve

developed a

comprehensive suite of sustainability products and services to help them, including green loans and green bonds.

With our Terra

approach, we aim to align our loan book with the Paris Agreement’s well-below two-degrees

Celsius goal in the nine sectors most responsible for climate change. In 2020, we released our second

Terra

progress report. The report includes quantitative results

and targets for all of these nine sectors, fulfilling the

commitment we made the previous year.

One of these targets is a 19% reduction in our financing to upstream oil

and gas by 2040 compared with 2019 levels. It’s important

to note that this target is in line with the International

Energy Association’s sustainable

development scenario, and that it’s not static.

If more or quicker action is

needed and the scenario is adjusted, our target will adjust accordingly.

For more details on our targets and

exposure in these nine sectors, please see the latest Terra

progress report on ing.com.

Our approach to climate action is collaborative and

inclusive. We helped develop an open-source climate

methodology with our partner, the 2˚ Investing

Initiative (2DII). This was published in 2020 for all banks to use.

We’re working with other banks to make

this an industry-wide standard, as we believe this will lead to greater

transparency and help the financial sector make a bigger impact. In December 2018, ING and four peers signed

the Katowice Commitment and in September 2020 these same banks published a blueprint of how we’ll all use

the methodology developed with 2DII.

Our work with the Katowice Commitment laid the groundwork for the Collective Commitment

to Climate Action

(CCCA), now signed by 38 banks globally. This is the banking sector’s farthest

-reaching commitment to climate

alignment. ING is co-lead of the implementation of the CCCA. In December 2020 an overview was published of

the concrete measures CCCA signatory banks took in the first 12

months to deliver on their commitment. ING is a

founding signatory of the Principles for Responsible Banking, adopted by more than 200 banks, representing

third of the world's banking assets.

While our Terra

approach helps measure the impact of our loans on the climate, we are increasingly aware of the

risks associated with climate change. These include physical risks, which can be acute (such as floods and

wildfires) or chronic (temperature increases and rising sea levels); and transition

risk, which is driven by policy,

technology or market changes as we shift towards a low-carbon

global economy and potentially lead to stranded

assets. Our climate risk programme helps measure the impact of climate change on our loan book. Following a

year of floods, droughts and wildfires, climate-related risk again

topped the World Economic Forum’s

(WEF) 2020

global risk ranking in terms of likelihood of occurrence and impact. The IMF is examining the impact of climate

the world’s financial markets

and whether it is priced into market valuations. The European Central

Bank (ECB)

published a guide in 2020 on how they expect banks to prudently manage and transparently disclose climate-

related and environmental risks under current

prudential rules.

We are continuing to advance our understanding

and approach to climate risks and opportunities. In 2020 ING

published our first Climate Risk Report, setting out our approach to managing this emerging strategic

and credit

risk. We’re integrating

climate risk into our risk management framework, governance

and business strategy.

Please see the Environmental, social and governance risk chapter for

more information.

Financial crime risks

Money laundering is a crime in and of itself. It also facilitates other crimes, such as people trafficking

and drug

smuggling. According to the United Nations Office on Drugs and Crime, suspicious transactions continue to reach

as much as $2 trillion a year. This scale illustrates

the scope of the problem – it is not something one bank can

fight on its own.

To be more

effective in our efforts to fight

financial economic crime, we work closely with our peers, regulators

and law enforcement. This includes initiatives with other Dutch and Belgian banks to jointly monitor

transactions,

and further professionalising our KYC organisation

by means of internationally recognised certifications.

Next to this, improving customer due diligence and transaction monitoring activities are top

priorities for ING.

Since 2017, we’ve been running a programme to enhance our know your customer activities in all customer

segments of all ING business units. This has led to standardised KYC policies, global governance and consistent

processes, tools and training, which contribute to becoming sustainably better

in the way we address money

laundering risks and comply with laws and regulations.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Structural solutions include interventions aimed at addressing undesirable behavioural

patterns identified within

the organisation and encouraging desirable behaviours

that will positively influence KYC execution.

Cybersecurity resilience

Digital technology has connected the world in an unprecedented way.

The Covid-19 outbreak highlighted just

how much people rely on the internet to work, socialise and shop. At the same time, there are growing concerns

about unequal access, a lack of governance, data privacy and increasingly sophisticated cyberattacks.

Cybercrime is a growing threat to companies in general and to the financial system

in particular. The expansion

mobile and online banking, and ING’s own reliance on cloud technology – especially at a time when many

employees are working from home – have increased the risk of criminals gaining unauthorised access to ING

networks. The global lockdowns due to the pandemic also presented opportunities for criminals to

continue to

target customers with phishing attacks,

identity theft and online fraud.

One of our top priorities is to keep our bank safe, secure and compliant and to retain

customers’ trust. Our multi-

faceted approach aims to anticipate threats

and prevent them from becoming reality.

Safeguards include security

and communication-monitoring capabilities that use behavioural analysis, machine learning and rules engines.

We are also partnering with fintechs and others to facilitate

security innovation for the bank and our industry.

Fluctuations in equity markets

Our banking operations are exposed to fluctuations in equity markets. ING maintains

an internationally

diversified and mainly client-related trading

portfolio. Accordingly,

market downturns are likely to lead to

declines in securities trading and brokerage activities which we execute

for customers and therefore

to a decline

in related commissions and trading results. In addition to this, ING also maintains equity investments

in its own

non-trading books. Fluctuations in equity markets may affect

the value of these investments.

Fluctuations in interest rates

Our banking operations are exposed to fluctuations in interest

rates. Mismatches in the interest

re-pricing and

maturity profile of assets and liabilities in our balance sheet can affect the future interest

earnings and economic

value of the bank's underlying banking operations. In addition, changing interest rates may

impact the (assumed)

behavior of our customers, impacting the interest rate

exposure, interest hedge positions and future interest

earnings, solvency and economic value of the bank’s underlying banking operations.

In the current low (and in

some cases negative) interest rate

environment in the Eurozone, the stability

of future interest earnings and

margin also depends on the ability to actively manage pricing of customer assets and liabilities. Especially,

the

pricing of customer savings portfolios in relation to re-pricing customer

assets and other investments in our

balance sheet is a key factor in the management of the bank’s

interest earnings.

Fluctuations in exchange rates

ING Group is exposed to fluctuations in exchange rates.

Our management of exchange rate

sensitivity affects the

results of our operations through the trading activities and because we prepare and publish our consolidated

financial statements in euros. Because a substantial

portion of our income, expenses and foreign investments is

denominated in currencies other than euros, fluctuations in the exchange rates

used to translate foreign

currencies, particularly the U.S. Dollar,

Pound Sterling, Turkish Lira,

Chinese Renminbi, Australian Dollar,

Japanese

Yen, Polish Zloty,

Korean Won, Brazilian Real,

Singapore Dollar,

Thai Baht and Russian Ruble into euros can

impact our reported results of operations, cash flows and reserves from year

to year.

Fluctuations in exchange

rates will also impact the value (denominated in euro) of our investments

in our non-euro reporting subsidiaries.

The impact of these fluctuations in exchange rates is mitigated

to some extent by the fact that income and

related expenses, as well as assets and liabilities, of each of our non-euro reporting subsidiaries are generally

denominated in the same currencies. FX translation risk is managed by taking into

account the effect of

translation results on the Core Equity Tier 1 ratio (CET1).

Consolidated result of operations

ING Group monitors and evaluates the performance of ING Group

at a consolidated level and by segment using

results based on figures according to IFRS as adopted by the European Union (IFRS-EU). The Executive

Board and

the Management Board Banking consider this measure to be relevant to

an understanding of the Group’s

financial performance, because it allows investors to

understand the primary method used by management to

evaluate the Group’s

operating performance and make decisions about allocating resources.

In addition, ING

Group believes that the presentation of results in accordance

with IFRS-EU helps investors compare its segment

performance on a meaningful basis by highlighting result before tax attributable

to ongoing operations and the

profitability of the segment businesses. IFRS-EU result is derived by including the impact of the IFRS-EU ‘IAS 39

carve out’ adjustment from IFRS-IASB.

The IFRS-EU ‘IAS 39 carve-out’ adjustment relates to fair value portfolio hedge accounting

strategies for the

mortgage

and savings portfolios in the Benelux, Germany and Other Challengers that are not eligible under IFRS-

Contents

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Part II

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

IASB. As no hedge accounting is applied to these mortgage and savings portfolios under IFRS-IASB,

the fair value

changes of the derivatives are not offset by fair value

changes of the hedge items (mortgages and savings).

As from the financial year 2020 the information presented to

the executive Board is no longer based on

underlying results but on IFRS as endorsed by the EU. Previously monitoring and evaluation of ING Group’s

segments was based on a non-GAAP financial performance measure called underlying. Underlying result was

derived by excluding the impact of the IFRS-EU ‘IAS 39 carve-out’ adjustment, special items, divestments and

results from former insurance related

activities from the IFRS-EU results. In 2020 and 2019 no special items,

divestments or results from former insurance related

activities were recorded anymore. 2018 included a special

item of EUR 775 million special item related to the settlement agreement with the Dutch authorities on

regulatory issues, as well as a EUR 90 million net result from the former Insurance activities.

Segment Reporting

The published 2020 Annual Accounts of ING Group includes financial information in accordance with

International Financial Reporting Standards as adopted by the European Union (IFRS-EU). The segment

reporting

in the annual report on Form 20-F has been reconciled with International Financial Reporting Standards

as issued

by the International Accounting Standards Board (IFRS-IASB) for

consistency with the other financial information

contained in this report. The difference between the accounting

standards is reflected in the Wholesale Banking

segment, and in the geographical split of the segments in the Netherlands, Belgium, Germany and Other

Challengers. Reference is made to Note

1 ‘Accounting

Policies’ for a reconciliation between IFRS-EU and IFRS-

IASB.

Recognition and measurement of segment results are in line with the accounting policies as described in Note 1

‘Accounting

policies’. Transfer

prices for inter-segment transactions are set at arm’s

length. Corporate expenses

are allocated to business lines based on time spent by head office personnel, the relative number of staff,

or on

the basis of income, expenses and/or assets of the segment.

The Executive Board of ING Group and the Management Board Banking set the performance targets,

approve

and monitor the budgets prepared by the business lines. Business lines formulate strategic,

commercial, and

financial plans in conformity with the strategy and performance targets

set by the Executive Board of ING Group

and the Management Board Banking.

ING Group’s segments are based on the internal

reporting structures by lines of business. The following table

specifies the segments by line of business and the main sources of income of each of the segments:

Retail Netherlands

(Market Leaders)

Income from retail and private banking activities in the Netherlands, including the SME and mid-corporate

segments, and the Real Estate Finance portfolio related

to Dutch domestic mid-corporates. The main products

offered are current and savings accounts,

business lending, mortgages and other consumer lending in the

Netherlands.

Retail Belgium (Market Leaders)

Income from retail and private banking activities in Belgium (including Luxembourg)

including the SME and mid-

corporate segments. The main products offered

are similar to those in the Netherlands.

Retail Germany (Challengers and Growth Markets)

Income from retail and private banking activities in Germany (including Austria).

The main products offered are

current and savings accounts, mortgages and other customer lending.

Retail Other (Challengers and Growth Markets)

Income from retail banking activities in the rest of the world, including the SME and mid-corporate

segments in

specific countries. The main products offered are similar to those in the Netherlands.

Wholesale Banking

Income from wholesale banking activities. The main products are: lending, debt capital markets, working capital

solutions, export finance, daily banking solutions, treasury and risk solutions, and corporate finance.

Corporate Line

In addition to these segments, ING Group reconciles the total segment results to the total

result using Corporate

Line. The Corporate Line is a reflection of capital management activities and certain income and

expense items

that are not allocated to the banking businesses, including the recognition of value-added tax

(VAT)

refunds in

the Netherlands (recorded under expenses). In 2020, net interest income on the

Corporate Line sharply declined,

mainly due to lower interest results from foreign

currency hedging due to lower interest rate

differentials. In

2019, a EUR 119 million gain from the release of a currency translation reserve following the sale of ING’s

stake in

Contents

Part I

Part II

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Kotak Mahindra Bank was included, and the recognition of a EUR 79 million receivable related

to the insolvency

of a financial institution (both recorded under income). In 2018, the EUR 775 million settlement agreement with

the Dutch authorities on regulatory issues was included as well as a EUR 90 million net result from the former

Insurance activities. Furthermore, the Corporate Line includes the isolated legacy costs

(mainly negative interest

results) caused by the replacement of short-term funding with long-term funding during 2013 and 2014. ING

Group applies a system of capital charging for

its banking operations in order to create a comparable basis for

the

results of business units globally, irrespective of the business units’ book equity and the currency they operate

in.

Total

Operations

The following table sets forth the contribution of ING’s

business lines and the corporate line to the net result for

each of the years 2020, 2019 and 2018. As of year 2020 consolidated results of ING Group are based on IFRS as

adopted by the European Union (IFRS-EU), and not on underlying anymore; furthermore, results of former

Insurance activities are included in Corporate Line; historical figures have

been adjusted (only in 2018). Reference

is made to 2019 Annual report on Form 20F for detailed information on the discussion of 2019 and 2018 results.

Total operations

1 January to 31 December 2020

Amounts in millions of euros

Retail

Banking

Netherlands

Retail

Banking

Belgium

Retail

Banking

Germany

Retail

Other

Wholesale

Banking

Corporate

Line

Total

Income:

Net interest income

3,511

1,816

1,587

2,760

3,718

212

13,604

Net fee and commission income

681

413

437

412

1,069

-1

3,011

Total investment

and other income

279

145

609

-192

1,022

Total income

4,471

2,373

2,117

3,261

5,396

17,637

Expenditure:

Operating expenses

2,236

1,737

1,110

2,469

3,218

383

11,153

Additions to loan loss provision

157

514

593

1,351

2,675

Total expenditure

2,393

2,251

1,167

3,063

4,568

385

13,828

Result before taxation

2,078

122

950

199

827

-367

3,809

Taxation

523

331

105

295

-58

1,246

Non-controlling interests

-1

Net result IFRS-EU

1,556

615

512

-308

2,485

Adjustment of the EU 'IAS 39 carve-out'

-234

Net result IFRS-IASB

1,556

615

278

-308

2,250

Contents

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Part II

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

1 January to 31 December 2019

Amounts in millions of euros

Retail

Banking

Netherlands

Retail

Banking

Belgium

Retail

Banking

Germany

Retail

Other

Wholesale

Banking

Corporate

Line

Total

Income:

Net interest income

3,541

1,907

1,579

2,787

3,794

470

14,079

Net fee and commission income

674

374

268

423

1,135

-6

2,868

Total investment

and other income

290

161

138

298

369

103

1,360

Total income

4,505

2,442

1,985

3,509

5,298

568

18,306

Expenditure:

Operating expenses

2,210

1,609

1,080

2,210

2,937

307

10,353

Additions to loan loss provision

186

-53

364

532

1,120

Total expenditure

2,301

1,794

1,027

2,574

3,469

307

11,472

Result before taxation

2,204

647

957

935

1,830

261

6,834

Taxation

558

192

328

234

464

179

1,955

Non-controlling interests

Net result IFRS-EU

1,646

455

627

619

1,352

4,781

Adjustment of the EU 'IAS 39 carve-out'

-878

Net result IFRS-IASB

1,646

455

627

619

474

3,903

1 January to 31 December 2018

Amounts in millions of euros

Retail

Banking

Netherlands

Retail

Banking

Belgium

Retail

Banking

Germany

Retail

Other

Wholesale

Banking

Corporate

Line

Total

Income:

Net interest income

3,749

1,830

1,671

2,690

3,686

290

13,916

Net fee and commission income

664

371

225

395

1,152

-8

2,798

Total investment

and other income

335

169

230

673

-20

1,462

Total income

4,747

2,369

1,972

3,315

5,510

262

18,176

Expenditure:

Operating expenses

2,220

1,610

1,027

2,033

2,771

1,022

10,682

Additions to loan loss provision

-41

164

-27

350

210

-1

656

Total expenditure

2,179

1,774

1,000

2,383

2,981

1,021

11,338

Result before taxation

2,568

595

972

932

2,529

-759

6,838

Taxation

626

199

324

200

633

2,027

Non-controlling interests

-0

108

Net result IFRS-EU

1,942

390

646

652

1,877

-804

4,703

Adjustment of the EU 'IAS 39 carve-out'

Net result IFRS-IASB

1,942

390

646

652

1,935

-804

4,761

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Year ended 31 December 2020 compared to

year ended 31 December 2019

ING’s net result (including the adjustment of the EU ‘IAS 39 carve-out’) decreased by EUR 1,653 million, or 42.4%,

to EUR 2,250 million compared with EUR 3,903 million in 2019. The net result was affected by a EUR 234

million

negative contribution of fair value changes on derivatives

related to asset-liability-management

activities for the

mortgage and savings portfolios in the Benelux, Germany,

France and Czech Republic, versus a EUR 878 million

negative contribution in 2019. These negative fair

value changes were mainly caused by changes in market

interest rates. No hedge accounting

is applied to these derivatives under IFRS-IASB.

The IFRS-EU net result (before adjustment of the EU ‘IAS 39 carve-out’) fell 48.0% to EUR 2,485 million from EUR

4,781 million in 2019. The effective tax rate in 2020 was

relatively high at 32.7% (versus 28.6% in 2019) and was

mainly caused by the lower result before tax, which included higher non-deductible amounts like

the

impairments on goodwill and on our stake in TMB.

The result before tax declined 44.3% to EUR 3,809 million in 2020 from EUR 6,834 million in 2019, primarily

caused by elevated risk costs reflecting the (expected)

economic impact of the Covid-19 pandemic, combined

with impairments on goodwill, restructuring provisions and other impairments. Net core lending (adjusted for

currency impacts, and excluding Treasury

and the run-off portfolios) declined by EUR 2.5 billion in 2020, while

net customer deposit inflow was high at EUR 41.4 billion. The global retail customer base grew

to 39.3 million at

year-end, and the number of primary customers rose during the year by 578,000 to 13.9 million.

Income declined 3.7% to EUR 17,637 million from EUR 18,306 million in 2019. The decline was mainly in the

Corporate Line due to lower interest

results from foreign currency ratio hedging and to

some positive one-offs

recorded in 2019. Income at Retail Banking decreased due to an impairment

on our equity stake in TMB, whereas

income in Wholesale Banking (mainly in Financial Markets) increased.

Net interest income decreased 3.4% to EUR 13,604 million. The decline was largely due to

lower interest results

on current accounts and savings, reflecting the continued pressure

on liability margins, combined with lower

interest results from foreign

currency ratio hedging due to lower interest rate

differentials. This decline was

largely offset by higher interest results

at Treasury (supported by

the introduction of the ECB’s two-tiering

system at the end of October 2019) and, to a lesser extent,

on lending products, reflecting a slight increase in the

total lending margin. ING’s overall

net interest margin declined to 1.44% from 1.54% in 2019.

Net fee and commission income increased 5.0% to EUR 3,011 million from 2,868 million in 2019. In Retail

Banking, net fee and commission income rose by EUR 204 million, or 11.7%. This was mainly driven by higher fee

income on investment products, predominantly in Germany,

whereas daily banking fees slightly increased

supported by increased package fees, which countered

the impact of a drop in payment transactions due to

lockdown measures and travel restrictions.

Total

fee income in Wholesale Banking declined by EUR 66 million, or

5.8%, predominantly in Trade

& Commodity Finance as a result of lower average oil prices as well as lower

syndicated deal activity in Lending.

Total

investment and other income decreased to EUR 1,022 million 2020 from EUR 1,360 million in previous year.

The decline was mainly in Retail Banking, largely due to a EUR 230 million goodwill impairment related to

ING’s

stake in TMB, and in the Corporate

Line. In 2019, the latter had included a EUR 119 million one-off gain from the

release of a currency translation reserve related to

the sale of ING’s stake

in Kotak Mahindra Bank and a EUR 79

million receivable related to the insolvency of a financial institution. These declines were partly

offset by

Wholesale Banking, predominantly in Financial Markets due to a positive swing in valuation adjustments.

Operating expenses increased by EUR 800 million, or 7.7%, to EUR 11,153 million. Expenses in 2020 included EUR

1,105 million of regulatory costs, compared with EUR 1,021 million previous year.

The increase was furthermore

caused by EUR 673 million of incidental items recorded in 2020, mainly reflecting EUR 310 million of goodwill

impairments and several restructuring provisions and impairments

related to the review of activities and

measures announced

(including those on Wholesale Banking and the Maggie project). Excluding regulatory costs

and these incidental items, expenses increased by EUR 43 million, or 0.5%, as the impact of collective-labour-

agreement (CLA) salary increases and higher IT expenses, was largely offset by the impact of continued

cost-

efficiency measures (including lower marketing and travel

costs as a result of the Covid-19 restrictions). The

cost/income ratio was 63.2% versus 56.6% in 2019.

Net additions to loan loss provisions were EUR 2,675 million, or 43 basis points of average customer

lending,

compared with EUR 1,120 million, or 18 basis points, in 2019. The increase was mainly due to various Individual

Stage 3 provisions, including a sizeable provision for an alleged external

fraud case in 2020, and high collective

Stage 1 and Stage 2 provisioning as a result of the economic impact of the Covid-19 pandemic. Risk costs in 2020

included EUR 590 million of collective provisions related to the worsened macro

-economic indicators, including

provisioning related to loans subject to a payment holiday.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Year ended 31 December 2019 compared to year

ended 31 December 2018

In 2019, ING’s operations showed solid commercial

performance despite the challenging rate environment,

geopolitical uncertainties and demanding regulatory environment. The net

result (including the adjustment of

the EU ‘IAS 39 carve-out’) declined 18.0% to EUR 3,903 million in 2019 from EUR 4,761 million in 2018, which has

been negatively affected by the EUR 775 million settlement

agreement with the Dutch authorities on regulatory

issues. The net result was affected by a EUR 936 million negative swing in net

contribution of fair value changes

on derivatives related to asset-liability-management

activities the mortgage and savings portfolios in the

Benelux, Germany, France

and Czech Republic. These fair value changes are mainly caused by changes in market

interest rates. No hedge accounting

is applied to these derivatives under IFRS-IASB.

The net result IFRS-EU (excluding the adjustment of the EU ‘IAS 39 carve-out’) increased 1.6% to EUR 4,781

million from EUR 4,703 million. This was in part due to a decreased effective tax rate

of 28.6% from 29.6% in

2018, mainly reflecting lower non-deductible costs, as 2018 included the aforementioned settlement

agreement

with the Dutch authorities. This decline was partly offset by the cancellation of tax deductibility of interest

expenses on additional Tier 1 instruments in the Netherlands as from 2018.

The result before tax declined 0.1% to EUR 6,834 million in 2019 from EUR 6,838 million in 2018, primarily due to

higher risk costs. Commercial momentum remained solid, albeit at a slower pace than previous year.

ING grew

net core lending (adjusted for currency impacts, and excluding

Treasury and the run-off portfolios) by EUR 17.2

billion, or 2.9%, and net customer deposits rose by EUR 23.4 billion in 2019. The global retail customer base grew

to 38.8 million at year-end, and the number of primary customers rose during the year

by 0.8 million to 13.3

million.

The income increased 0.7% to EUR 18,306 million from EUR 18,176 million in 2018, driven by Corporate Line

(predominantly one-offs) and Retail Banking, while income in Wholesale Banking (mainly in Financial Markets

and Lending) declined. Net interest income rose 1.2% to EUR 14,079 million. The increase was driven

by higher

interest results on customer lending mainly supported by volume growth,

partly offset by lower margins on

savings and current accounts. The total lending margin was slightly up compared

with 2018, as the impact of

improved interest margins on mortgages

was largely offset by lower margins on other customer

lending. ING’s

overall net interest margin remained

at 1.54% in 2019.

Net fee and commission income rose 2.5% to EUR 2,868 million. The increase was driven by Retail

Banking with

increases in most countries, partly offset by a small decline in Wholesale Banking. Investment

and other income

slightly decreased to EUR 1,360 million from EUR 1,462 million in 2018, with a decline in Wholesale Banking,

mainly due to negative valuation adjustments in Financial Markets,

and some one-offs. The decline was largely

offset by increases in Retail Banking and Corporate

Line. The latter was supported by a EUR 119 million gain from

the release of a currency translation reserve following the sale of ING’s

stake in Kotak Mahindra

Bank and the

recognition of a EUR 79 million receivable related to the insolvency of a financial institution.

Operating expenses declined 3.1% to EUR 10,353 million from EUR 10,682 million in 2018, mainly due to the

aforementioned settlement agreement

with the Dutch authorities. Excluding this settlement, operating expenses

increased 4.5% to EUR 10,353 million from EUR 9,907 million in 2018. The increase was visible in all segments,

except for Retail Netherlands and Retail

Belgium. Regulatory expenses rose to EUR 1,021 million from EUR 947

million in previous year.

Excluding regulatory costs and the settlement agreement,

expenses were up 4.2%,

mainly due to higher KYC-related costs, increased

staff costs and continued investments

in business growth,

partly offset by costs savings and one-offs (including a higher VAT

refund, recorded in Corporate Line). The

cost/income ratio was 56.6% versus 58.8% in 2018.

The net addition to the provision for loan losses rose to EUR 1,120 million from EUR 656 million in 2018. This

increase was mainly caused by a number a large individual files in Wholesale Banking and higher,

but still

relatively low risk costs in Retail Netherlands. Risk costs

rose to 18 basis points of average customer lending,

remaining below ING Bank’s through-the-cycle average

of approximately 25 basis points, compared with 11 basis

points of average customer lending in 2018.

For the following information per business line the IFRS-EU measures are in place, in line with management

reporting.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Retail Netherlands

Amounts in millions of euros

2020

2019

2018

Income:

Net interest income

3,511

3,541

3,749

Net fee and commission income

681

674

664

Investment income and other income

279

290

335

Total income

4,471

4,505

4,747

Expenditure:

Operating expenses

2,236

2,210

2,220

Additions to the provision for loan losses

157

–41

Total expenditure

2,393

2,301

2,179

Result before tax

2,078

2,204

2,568

Taxation

523

558

626

Non-controlling interests

–1

–0

Net result IFRS-IASB

1,556

1,646

1,942

Year ended 31 December 2020 compared to

year ended 31 December 2019

The net result of Retail Netherlands decreased by EUR 90 million, or -5.5%, to EUR 1,556 million in 2020 from

EUR 1,646 million in 2019.

The result before tax of Retail

Netherlands decreased 5.7% to EUR 2,078 million from EUR 2,204 million in 2019.

This decline was mainly attributable to higher risk costs reflecting the worsened

macro-economic environment

and an increase in regulatory costs.

Total

income declined by EUR 34 million, or -0.8%, to EUR 4,471 million, compared with EUR 4,505 million in

Net interest income declined 0.8%, mainly due to lower margins on savings and current

accounts,

combined with a decline in average lending volumes, which was largely offset

by higher Treasury-

revenues. Net core lending (which excludes Treasury

products and a EUR 1.1 billion decline in the WUB run-off

portfolio) decreased by EUR 3.2 billion in 2020, of which EUR 0.8 billion was in residential mortgages and EUR 2.4

billion in other lending. Net customer deposits (excluding Treasury)

grew by EUR 15.3 billion, predominantly in

current accounts. Net fee and commission income increased by EUR 7 million, or 1.0%, primarily due to higher

investment product fees. Investment

and other income was EUR 11 million lower.

Operating expenses rose by EUR 26 million, or 1.2%, to EUR 2,236 million from EUR 2,210 million in 2019, of

which EUR 65 million was caused by higher regulatory costs to EUR 255 million from EUR 190 million in 2019.

Expenses excluding regulatory costs declined 1.9% as the impact of CLA salary increases, higher IT expenses as

well as provisions related to redundancies and customer claims, were

more than offset by lower external staff

costs and lower marketing and travel

expenses.

The net addition to loan loss provisions was EUR 157 million, or 10 basis points of average customer lending,

compared with EUR 91 million, or 6 basis points, in 2019. Risk costs in 2020 included EUR 118 million of collective

provisions related to the worsened macro-economic

indicators, including provisioning related to

loans subject to

a payment holiday.

Year ended 31 December 2019 compared to year

ended 31 December 2018

The net result of Retail Netherlands decreased by EUR 296 million, or 15.2%, to EUR 1,646 million in 2019 from

EUR 1,942 million in 2018.

The result before tax of Retail

Netherlands decreased 14.2% to EUR 2,204 million from EUR 2,568 million in 2018.

This was mainly due to lower income, mainly reflecting lower margins on customer deposits and lower revenues

from Treasury,

combined with higher risk costs. Operating expenses declined slightly.

Income fell 5.1% to EUR 4,505 million from EUR 4,747 million previous year.

The interest result was 5.5% lower,

reflecting margin pressure on savings and current accounts

due to lower re-investment yields and lower

revenues from Treasury.

This was partly compensated by improved margins on mortgages.

Net core lending

(excluding the WUB run-off portfolio and Treasury

-related products) grew by EUR 2.0 billion in 2019, equally

divided over mortgages and other lending. Net growth in customer deposits (excluding

Treasury) was EUR 8.4

billion in 2019. Net fee and commission income rose by EUR 10 million, or 1.5%, primarily due to higher daily

banking fees. Investment and other income declined by EUR 45 million, mainly attributable

to lower results from

financial markets-related products.

Contents

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Part II

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Operating expenses declined 0.5% on 2018, this was mainly due to lower regulatory costs, benefits from

the

ongoing cost-saving initiatives and some positive one-offs, partly offset

by increased salaries as well as higher KYC

and IT-related

expenses.

Risk costs in 2019 increased to a relatively low EUR 91 million, or 6 basis points of average

customer lending,

partly caused by a change in the house price index that is used for Dutch mortgages. This compares with a net

release of EUR 41 million 2018, which included releases in both mortgages and business lending.

Retail Belgium

Amounts in millions of euros

2020

2019

2018

Income:

Net interest income

1,816

1,907

1,830

Net fee and commission income

413

374

371

Investment income and other income

145

161

169

Total income

2,373

2,442

2,369

Expenditure:

Operating expenses

1,737

1,609

1,610

Additions to the provision for loan losses

514

186

164

Total expenditure

2,251

1,794

1,774

Result before tax

122

647

595

Taxation

192

199

Non-controlling interests

Net result IFRS-IASB

455

390

Year ended 31 December 2020 compared to

year ended 31 December 2019

The net result of Retail Belgium (including ING in Luxembourg) declined by EUR 384 million to EUR 71 million in

2020 from EUR 455 million in 2019.

The result before tax of Retail

Belgium fell to EUR 122 million, compared with EUR 647 million in 2019. The

decline was attributable to higher risk costs reflecting the worsened

macro-economic environment, combined

higher expenses and lower income.

Income declined by EUR 69 million, or 2.8%, to EUR 2,373 million from EUR 2,442 million in 2019. Net interest

income was 4.8% down to EUR 1,816 million, mainly reflecting lower margins on savings and current accounts,

and lower Treasury related

revenues, partly offset by higher interest results

from mortgages. Net core lending

(excluding Treasury)

decreased by EUR 1.5 billion in 2020, evenly spread over mortgages and other lending. Net

customer deposits (also excluding Treasury)

grew by EUR 4.0 billion, predominantly in current accounts. Net fee

and commission income rose by EUR 39 million, or 10.4%, mainly due to higher fee income on investment

products and mortgages. Investment and other income

declined by EUR 16 million, mainly from Financial

Markets.

Operating expenses rose by EUR 128 million, of which EUR 43 million was due to a goodwill impairment related

to an acquisition in the past by ING Belgium and EUR 40 million related to restructuring costs recorded

in the

fourth quarter of 2020. The remaining increase was mainly due to higher regulatory costs and IT expe

nses.

The net addition to the provision for loan losses increased to EUR 514 million, or 57 basis points of average

customer lending, from EUR 186 million, or 21 basis points, in 2019. Risk costs in 2020 included EUR 158 million

of collective provisions related to the worsened macro

-economic indicators, including provisioning related to

loans subject to a payment holiday.

The remaining risk costs were mainly related to business lending, including

provisioning on a number of individual files.

Year ended 31 December 2019 compared to year

ended 31 December 2018

The net result of Retail Belgium (including ING in Luxembourg) increased by EUR 65 million, or 16.7%, to EUR 455

million in 2019 from EUR 390 million in 2018.

The result before tax of Retail

Belgium rose 8.7% to EUR 647 million in 2019, compared with EUR 595 million in

The increase reflects higher income and stable expenses, only partly offset by an increase in risk costs.

Income increased to EUR 2,442 million from EUR 2,369 million in 2018. The interest result was 4.2% up to

EUR

1,907 million, mainly due to volume growth, increased margins on mortgages, and supported by

higher net

interest income from Treasury

-related products. This was in part offset by lower net interest

income from savings

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

and current

accounts, reflecting the low interest rate

environment, and some margin pressure on non-mortgage

lending. The net production in customer lending (excluding Treasury)

was EUR 3.3 billion, of which EUR 1.2 billion

was in residential mortgages and EUR 2.1 billion in other lending. The net inflow in customer deposits (excluding

Treasury) was EUR 4.1 billion in 2019. Net fee and commission income

increased 0.8% to EUR 374 million.

Investment and other income was EUR 8 million lower,

mainly due to lower Treasur

y-related revenues.

Operating expenses declined 0.1% to EUR 1,609 million, mainly due to lower staff

-related expenses stemming

from the transformation programmes,

partly offset by higher regulatory costs and KYC

-related expenses.

Risk costs increased by EUR 22 million to EUR

186 million, or 21 basis points of average customer lending, from

EUR 164 million, or 19 basis points, in 2018. The increase was mainly caused by additional provisioning on

individual mid-corporates files and higher collective provisions for consumer

lending.

Retail Germany

Amounts in millions of euros

2020

2019

2018

Income:

Net interest income

1,587

1,579

1,671

Net fee and commission income

437

268

225

Investment income and other income

138

Total income

2,117

1,985

1,972

Expenditure:

Operating expenses

1,110

1,080

1,027

Additions to the provision for loan losses

–53

–27

Total expenditure

1,167

1,027

1,000

Result before tax

950

957

972

Taxation

331

328

324

Non-controlling interests

Net result IFRS-IASB

615

627

646

Year ended 31 December 2020 compared to year

ended 31 December 2019

The net result of Retail Germany (including ING in Austria) decreased by EUR 12 million, or 1.9%, to EUR 615

million in 2020 from EUR 627 million in 2019.

The result before tax declined 0.7% to EUR 950 million, compared with EUR 957 million in 2019, as higher income

largely offset the impact of higher risk costs (after a net release in 2019) and increased expens

es.

Total

income rose 6.6% to EUR 2,117 million from EUR 1,985 million in 2019. The increase was driven by EUR 169

million higher fee income, predominantly on investment products

due to higher assets under management, new

account openings and a higher number of brokerage trades

in volatile markets. Net interest

income increased

0.5% to EUR 1,587 million, as higher interest results from lending and accounting asymmetry in Treasury

(with an

offset in other income), was largely offset by margin

pressure on savings and current accounts. In 2020, net core

lending (which excludes Treasury

products) increased EUR 4.5 billion, of which EUR 4.2 billion was in residential

mortgages and EUR 0.3 billion in consumer lending. Net customer deposits (excluding Treasury)

increased by EUR

5.8 billion, largely in current accounts. Investment and other income

declined by EUR 45 million, mainly due to

the aforementioned accounting asymmetry and lower capital

gains.

Operating expenses increased by EUR 30 million, or 2.8%, to EUR 1,110 million in 2020. The increase was mainly

due to investments to support business growth as well as the consolidation of a subsidiary as from the first

quarter of 2020, while previous year included a EUR 36 million restructuring provision.

The net addition to the provision for loan losses was EUR 57 million, or 6 basis points of average

customer

lending, compared with a net release of EUR 53 million in 2019, which had included model updates on

mortgages. Risk costs in 2020 included EUR 8 million of collective provisions related to

the worsened macro-

economic indicators.

Year ended 31 December 2019 compared to year

ended 31 December 2018

The net result of Retail Germany (including ING in Austria) decreased by EUR 19 million, or 2.9%, to EUR 627

million in 2019 from EUR 646 million in 2018.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

The result before tax declined 1.5% to EUR 957 million, compared with EUR 972 million in 2018, mainly due to

higher expenses, partly offset by slightly increased income and a higher net release in risk costs.

Income increased 0.7% to EUR 1,985 million in 2019 from EUR 1,972 million a year ago. Net interest income

declined 5.5%, mainly due to lower Treasury-related

interest results (with a partial offset in other income).

Excluding Treasury,

net interest income rose marginally,

mainly reflecting volume growth in most products and

improved margins on mortgages, offset by lower

interest results on savings and deposits due to margin pressure.

The net growth in core lending (excluding Treasury)

was EUR 3.0 billion in 2019, of which EUR 2.4 billion in

mortgages and EUR 0.6 billion in consumer lending. Net inflow in customer deposits (excluding Treasury)

was

EUR 0.8 billion. Net fee and commission income rose 19.1% to EUR 268 million, due to higher fees on mortgages

and daily banking. Investment and other income rose by EUR 62 million to EUR 138 million, largely due to the

aforementioned accounting asymmetry in Treasury

revenues.

Operating expenses rose 5.2% to EUR 1,080 million from EUR 1,027 million in 2018. The increase was mainly due

to a restructuring provision related to the completion

of ING’s Agile transformation

in Germany, higher KYC-

related expenses, investments to

accelerate the acquisition of primary customers, and the launch of Interhyp in

Austria.

Risk costs were EUR -53 million, or -6 basis points of average customer

lending, compared with EUR -27 million in

The net release in 2019 mainly related to model updates for mortgages,

while the net release in 2018

included a significant release in the consumer lending portfolio.

Retail Other

Amounts in millions of euros

2020

2019

2018

Income:

Net interest income

2,760

2,787

2,690

Net fee and commission income

412

423

395

Investment income and other income

298

230

Total income

3,261

3,509

3,315

Expenditure:

Operating expenses

2,469

2,210

2,033

Additions to the provision for loan losses

593

364

350

Total expenditure

3,063

2,574

2,383

Result before tax

199

935

932

Taxation

105

234

200

Non-controlling interests

Net result IFRS-IASB

619

652

Year ended 31 December 2020 compared to year

ended 31 December 2019

Retail Other consists of the Other Challengers & Growth Markets,

including the bank stakes in Asia. The net result

of Retail Other decreased to EUR 39 million in 2020, from EUR 619 million in 2019.

Retail Others’ result before

tax fell to EUR 199 million, from EUR 935 million in 2019, mainly reflecting

impairments on TMB and the Maggie project as well as higher risk costs.

Total

income declined by EUR 248 million to EUR 3,261 million in 2020, of which EUR 230 million related to an

impairment on ING’s equity stake

in TMB. Excluding this impairment, total income decreased by EUR 18 million,

or -0.5%. Net interest income was down 1.0% to EUR 2,760 million, reflecting margin pressure

on savings and

current accounts, largely offset by higher interest

results from lending products and Treasury.

Net customer

lending (adjusted for currency effects and Treasury)

grew by EUR 2.6 billion in 2020, with growth in all countries,

except Italy.

The net inflow in customer deposits, also adjusted for currency impacts and Treasury,

was EUR 11.9

billion, with largest increases in Poland and Spain. Net fee and commission income declined 2.6% to EUR 412

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

million, largely due to a decline in Turkey,

which was partly offset by increases in most of the other countries.

Excluding the aforementioned impairment, investment

and other income rose by EUR 21 million.

Operating expenses increased by EUR 259 million, or 11.7%, to EUR 2,469 million from EUR 2,210 million in 2019,

of which EUR 140 million related to an impairment on capitalised software following the decision to

stop the

Maggie transformation programme (previously

called Model Bank) and EUR 27 million of restructuring provisions

and impairments related to the project and some other countries. Excluding

these incidental items, expenses

increased by EUR 92 million, or 4.2%, mainly due to higher regulatory costs, investments in business growth

and

lower capitalization of costs following the decision on Maggie. These increases were

partly offset by lower legal

provisions as well as lower marketing and travel

expenses.

The net addition to loan loss provisions increased by EUR 229 million on 2019 to EUR 593 million, or 61 basis

points of average customer lending. Risk costs in 2020 included EUR 114 million of collective provisions

related to

the worsened macro-economic indicators, including provisioning

related to loans subject to a payment holiday,

as well as a EUR 59 million Stage 3 provision for expected losses on CHF-indexed

mortgages in Poland. The

increase versus 2019 was mainly visible in Poland, Romania and Australia,

whereas risk costs in Turkey

declined.

Year ended 31 December 2019 compared to year

ended 31 December 2018

Retail Other consists of the Other Challengers & Growth Markets,

including the bank stakes in Asia. The net result

of Retail Other decreased by EUR 33 million, or 5.1%, to EUR 619 million in 2019 from EUR 652 million in 2018.

Retail Other’s result before

tax increased 0.3% to EUR 935 million in 2019, from EUR 932 million in 2018. This was

mainly due to higher income, partly offset by increased expenses and higher risk costs.

Total

income rose by EUR 194 million, or 5.9%, to EUR 3,509 million. This increase was driven by strong results

across most of the countries, whereas 2018 included a higher profit from ING Bank’s

stake in TMB due to one-

offs. Net interest income rose 3.6% to

EUR 2,787 million, reflecting volume growth in lending and customer

deposits, and a stable total interest margin. This increase was

offset by accounting asymmetry in Treasury

with

an offset in other income. The net production in customer lending (excluding currency

effects and Treasury)

was

EUR 7.8 billion, with increases mainly in Spain, Poland and Australia, while Turkey

and Italy declined. Net

customer deposits grew by EUR 6.9 billion in 2019, with the largest increases in Poland, Spain and Australia.

Net

commission and fee income increased 7.1% to EUR 423 million driven by increases in most countries, but

declined in Spain and Turkey.

Investment and other income rose by EUR 68 million, mainly due to the

aforementioned accounting asymmetry in Treasury

and a higher dividend from Bank of Beijing, partly offset by a

lower profit from TMB.

Operating expenses increased by EUR 177 million, or 8.7%, to EUR 2,210 million. This increase was in addition to

higher regulatory costs and legal provisions, mainly due to higher expenses to support business growth

and the

implementation of bank-wide regulatory programmes,

including KYC.

Risk costs were EUR 364 million, or 38 basis points of average customer

lending, compared with EUR 350 million,

or 40 basis points, in 2018. The increase was mainly attributable to higher risk costs in Spain and Poland, while

risk costs in Turkey

and Italy declined.

Wholesale Banking

Amounts in millions of euros

2020

2019

2018

Income:

Net interest income

3,718

3,794

3,686

Net fee and commission income

1,069

1,135

1,152

Investment income and other income

609

369

673

Total income

5,396

5,298

5,510

Expenditure:

Operating expenses

3,218

2,937

2,771

Additions to the provision for loan losses

1,351

532

210

Total expenditure

4,568

3,469

2,981

Result before tax

827

1,830

2,529

Taxation

295

464

633

Non-controlling interests

Net result IFRS-EU

512

1,352

1,877

Adjustment of the EU 'IAS 39 carve-out'

–234

–878

Net result IFRS-IASB

278

474

1,935

Contents

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Part II

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Year ended 31 December 2020 compared to year

ended 31 December 2019

The net result of Wholesale Banking declined to EUR 278 million in 2020 compared with EUR 474 million in 2019.

The adjustment of the EU ‘IAS 39 carve-out’, included in the net result, was

EUR -234 million in 2020, compared

with EUR -878 million in 2019, due to fair value changes on derivatives related to

asset-liability-management

activities for the mortgage and savings portfolios in the Benelux, Germany,

France and Czech Republic. These fair

value changes were mainly a result of changes in market interest

rates. No hedge accounting is applied to these

derivatives under IFRS-IASB.

The IFRS-EU net result, which is before the adjustment of the EU ‘IAS 39 carve-out’,

declined to EUR 512 million

from EUR 1,352 million in 2019.

The full-year 2020 results for Wholesale Banking were also strongly affected

by the impact of the Covid-19

pandemic. The result before tax dropped 54.8% to EUR 827 million, down from

EUR 1,830 million in 2019. The

decline was predominantly due to elevated risk costs and higher expenses (including impairments

and

restructuring provisions), partly offset by higher income.

Total

income rose 1.8% to EUR 5,396 million in 2020, compared with EUR 5,298 million in 2019, reflecting higher

revenues in Financial Markets and Treasury

& Other, partly offset

by lower income in Daily Banking & Trade

Finance and Lending. The net core lending book (adjusted for currency impacts and excluding Treasury

and the

Lease run-off portfolio) declined by EUR 4.9 billion in 2020. The inflow in net customer deposits (excluding

currency impacts and Treasury) was EUR 4.4 billion. Net interest

income decreased 2.0%, mainly due to lower

margins on current accounts and lower average

lending volumes. This decline was largely offset by higher

interest results from Treasury

(with an offset in other income). Net fee and commission income decreased 5.8%

on 2019, mainly due to lower syndicated deal activity in Lending and lower fees in Trade

& Commodity Finance.

Investment and other income rose by EUR 240 million, primarily due to higher valuation results in Financial

Markets, partly offset by Treasury.

Operating expenses rose 9.6% to EUR 3,218 million from EUR 2,937 million in 2019, mainly due to a EUR 260

million goodwill impairment and EUR 124 million of restructuring provisions and impairments recorded in the

fourth quarter of 2020, following the announced refocusing of activities, including an additional impairment on

Payvision. Excluding the aforementioned

incidental items, expenses decreased 3.5%, mainly due to lower

regulatory costs and the impact of continued cost-efficiency measures

as well as lower travel expenses as a result

of the Covid-19 restrictions.

The net addition to loan loss provisions rose to EUR 1,351 million, or 75 basis points of average customer

lending,

compared with EUR 532 million, or 29 basis points, in 2019. The increase was predominantly due to various

Individual Stage 3 provisions, including a sizeable provision for an alleged

external fraud case in 2020, and high

collective Stage 1 and Stage 2 provisions as a result of the economic impact of the Covid-19 pandemic, including

EUR 192 million of collective provisions related to the worsened macro

-economic indicators.

Lending posted a result before tax of EUR 691 million, down 56.7% compared

with EUR 1,597 million in 2019,

predominantly due to elevated risk costs. Risk costs

in 2020 were primarily impacted by various large individual

files, including a sizeable provision for an alleged external fraud

case, as well as the economic impact of the

Covid-19 pandemic. Lending income declined 3.2%, reflecting lower lending margins and lower syndicated deal

activity. Expenses declined 3.1%, mainly due to lower regulatory costs.

The result before tax from Daily Banking & Trade

Finance fell to EUR 246 million from EUR 476 million in 2019.

This decline was due to lower income and higher expenses, partly offset by lower risk costs as previous year

included a sizeable provision for an external fraud case. The decline in income

mainly reflect lower margins on

current accounts as well as lower fee income, mainly in Trade

& Commodity Finance as a result of lower average

oil prices. Expenses rose 9.8%, mainly due to impairments on Payvision’s

intangible assets.

Financial Markets recorded a result before

tax of EUR 230 million, compared with a loss of EUR 121 million in

The increase was predominantly due to higher income, which included EUR 73 million of positive valuation

adjustments versus EUR -228 million in 2019, and lower expenses in part due to lower staff

expenses and

regulatory costs. Excluding valuation adjustments,

pre-tax result rose by EUR 50 million compared with 2019,

mainly in the Global Capital Markets business.

The result before tax of Treasury

& Other was EUR -339 million compared with EUR -123 million in 2019. This

decline was mainly explained by a EUR 260 million goodwill impairment and EUR 95 million of restructuring

provisions and related impairments following the announced refocusing

of activities, partly offset by higher

Treasury income.

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Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Year ended 31 December 2019 compared to year

ended 31 December 2018

The net result of Wholesale Banking declined to EUR 474 million in 2019 compared with EUR 1,935 million in

The adjustment of the EU ‘IAS 39 carve-out’, included in the net result, turned to a loss of EUR 878 million

in 2019, from EUR 58 million in 2018, due to fair value changes on derivatives related

to asset-liability-

management activities for the mortgage and savings portfolios in the Benelux, Germany,

France and Czech

Republic. These fair value changes are mainly a result of changes in market

interest rates. No hedge accounting is

applied to these derivatives under IFRS-IASB. The net result IFRS-EU, which excludes

the adjustment of the EU

‘IAS 39 carve-out’, declined to EUR 1,352 million from EUR 1,877 million in 2018.

The full-year 2019 results for Wholesale Banking show that conditions were challenging in our markets.

The

result before tax dropped 27.6% to

EUR 1,830 million, down from EUR 2,529 million in 2018. The decline reflects

elevated risk costs (compared with a relatively low level

a year ago), lower revenues in mainly Financial Markets

and Lending, as well as higher expenses.

Total

income of Wholesale Banking fell 3.8% to EUR 5,298 million compared with 2018, mainly reflecting lower

revenues in Financial Markets, Lending and Treasury

-related revenues, while 2018 included the aforementioned

loss on the intended sale of an Italian lease run-off portfolio. In 2019, the net core lending book (adjusted for

currency impacts and excluding Treasury

and the Lease run-off portfolio) grew by EUR 1.1 billion. The inflow in

net customer deposits (excluding currency impacts and Treasury)

was EUR 3.1 billion. Net interest income

increased 2.9%, mainly driven by volume growth in Lending at lower margins and higher interest

results in Daily

Banking & Trade Finance, especially in Bank Mendes Gans and Payments

& Cash Management. Net fee and

commission income declined 1.5%. Investment and other income fell by EUR 304 million, mainly due to lower

valuation results in Financial Markets, while previous year included a gain

on a bond transaction in Belgium and a

loss on the intended sale of an Italian lease run-off portfolio.

Operating expenses rose 6.0% to EUR 2,937 million, in part due to higher regulatory costs. Excluding

regulatory

costs, expenses rose 4.7%, mainly attributable to higher KYC,

IT and staff-related expenses, partly offset

continued cost-efficiency savings. The cost/income ratio

increased to 55.4%, from 50.3% in 2017.

Risk costs increased to EUR 532 million, or 29 basis points of average customer

lending, from a relatively low EUR

210 million, or 12 basis points of average customer lending, in previous year.

The increase was mainly

attributable to a number of large individual files, including a sizeable provision for

a suspected external fraud

case.

Lending posted a result before tax of EUR 1,597 million, down 20.4% compared

with 2018. The decline reflects

lower income combined with higher expenses (including increased regulatory costs and KYC

-related expenses)

and higher risk costs due to a number of large individual files. Despite higher average volumes, Lending income

declined, mainly due to some pressure on margins and the EUR 66 million gain related to an equity-linked

bond

in Belgium recorded in 2018.

The result before tax from Daily Banking & Trade

Finance declined 24.3% to EUR 476 million from EUR 629

million in 2018. A modest increase in income, reflecting improved margins at lower average

volumes, could not

compensate for higher expenses and elevated

risk costs. The increased expenses reflect higher regulatory costs

and KYC-related expenses as well as investments

in Payvision and regulatory changes (including PSD2). Risk costs

in 2019 included a sizeable provision for a suspected external fraud

case.

Financial Markets recorded a result before

tax of EUR -121 million, compared with EUR -36 million in 2018. The

drop was predominantly due to lower income, which was impacted by EUR 228 million of negative

valuation

adjustments versus EUR -1 million in 2018, in part offset by lower expenses on the back of ongoing cost efficiency

measures. Excluding valuation adjustments, pre-tax

result rose by EUR 142 million compared with 2018, driven

by higher client income.

The result before tax of Treasury

& Other was EUR -123 million compared with EUR -70 million in 2018. This

decline was mainly due to lower results from Treasury

-related activities and Corporate Investments,

whereas the

result of the run-off businesses improved after the EUR 123 million loss on the intended sale of an Italian Lease

run-off portfolio recorded in 2018. Expenses increased mainly due to investments

in KYC enhancement and

innovation, while 2018 included a release from a legal provision.

Liquidity and capital resources

ING believes that its working capital is sufficient for its present requirements.

For information regarding our material

short and long- term cash requirements from known contractual and

other obligations, see “Additional

information – ING Group Risk Management section Funding and liquidity risk”

and “Note 51 – Capital Management” in the consolidated financial statements.

Contents

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Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

For information on legal or economic restrictions on the ability of subsidiaries to transfer

funds to the company

in the form of cash dividends, loans or advances, see “Note 19 – Equity” in the consolidated financial statements.

For information on the maturity profile of borrowings and a further description of the borrowings, please see

“Note 17 - Debt securities in issue”,

“Note 18 - Subordinated Loans” and “Note 41 – Liabilities and off-balance

sheet commitments by maturity” in the consolidated financial statements.

For information on currency and interest

rate structure,

see “Additional information

– ING Group Risk

Management section Market risk” and “Additional

information – ING Group Risk Management section Funding

and liquidity risk”.

For information on the use of financial instruments for hedging purposes, please see “Note 39 - Derivatives

and

hedge accounting” in the consolidated financial statements.

ING Group Consolidated Cash Flows

cash and cash equivalents

Amounts in millions of euros

2020

2019

2018

Treasury bills and other eligible bills

159

Amounts due from/to banks

478

786

–2,617

Cash and balances with central banks

111,087

53,202

49,987

Cash and cash equivalents at end of year

111,566

54,031

47,529

Year ended 31 December 2020 compared to

year ended 31 December 2019

Net cash flow from operating activities amounts to EUR 101,243 million for the year-end 2020, compared

to EUR

13,055 million at 31 December 2019. The increase in cash flow from operating activities of EUR 88,187 million is

explained by higher cash inflows from Loans and advances to banks (increase of EUR 56,989 million to EUR

53,078 million in 2020 due to new TLTRO III as the ECB modified the terms

and conditions of its TLTRO programm

to further support the provision of credit to households and firms in view of the COVID-19 pandamic) and

Customer deposits (increase of EUR 21,700 million to EUR 39,740 million in 2020) as well as lower cash outflows

of Loans and advances to Customers (decrease of EUR 19,563 million to EUR 2,876 in 2020) and Trading

assets

and liabilities (decrease of EUR 5,134 million to EUR 2,566 in 2020). The increases are partly offset by lower cash

inflows from (reverse) repurchase

transactions (decrease EUR 12,041 to EUR -933 million in 2020).

Net cash flow from investing activities amounts to EUR -8,487 million compared to

EUR -2,495 million in 2019 the

net cash flow from investing activities decreased by EUR 5,992 million. The movement is explained by

a net

increase in Securities at amortised costs of EUR 6,337 million.

Net cash flow from financing activities amounts to EUR -34,796 million in 2020, compared to EUR -4,154 million

in 2019. The decrease of EUR 30,642 million is explained by a net decrease of EUR 30,200 million of debt

securities and EUR 3,117 million of subordinated loans offset by lower dividend payments of EUR 2,676 million.

The operating, investing and financing activities described above result in an increase of EUR 57,960 million in

cash and cash equivalents to EUR 111,566 at year end 2020. The increase in cash and cash equivalent

was

supported by the combination of lower demand for credit and the continued inflow of customer

deposits as

result of Covid-19, as well as the TLTRO

III participation.

Year ended 31 December 2019 compared to year

ended 31 December 2018

Net cash flow from operating activities amounts to EUR 13,055 million for the year

-end 2019, compared to EUR

6,915 million at 31 December 2018. The increase in cash flow from operating activities of EUR 6,140 million is

explained by lower cash outflows from Loans and advances to customer (increase

of EUR 14,669 million to EUR -

16,687 million in 2019), an increase in other (increase of EUR 7,685 million to EUR + 11,752 million in 2019)

mainly relating to assets mandatorily at fair value through profit

or loss and other financial liabilities at fair value

through profit and loss. The increases are offset by a cash outflow of trading assets and liabilities (decrease

EUR 12,478 million to EUR – 2,568 million) and a cash outflow in loans and advances to banks (decrease of EUR

3,700 million to EUR – 3,911 million).

Net cash flow from investing activities amounts EUR – 2,495 million compared to EUR + 5,451 million in 2018 the

net cash flow from investing activities decreased by EUR 7,946 million. The movement is explained by

a decrease

in financial assets at fair value through other comprehensive income in investments

and advances of EUR 5,753

million to EUR – 16,270 million and securities at amortised costs (decreased by EUR 5,708 million to EUR + 13,001

million). Moreover,

financial assets at fair value through other comprehensive income decreased

by EUR 2,267

million to EUR + 13,390 in disposals and redemptions. These movements are offset by an increase in securities at

amortised costs of investments and advances (increase of EUR 5,717 million to EUR – 12,268 million).

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Net cash flow from financing activities amounts EUR – 4,154 million in 2019, compared to EUR 15,983 million in

The decrease of EUR 20,137 million is explained by a decrease of EUR -61,750 million to EUR + 90,793

million in proceeds from debt securities and offset by an increase of EUR 36,673 million to EUR – 94,497 million

in repayments of debt securities.

The operating, investing and financing activities described above result in an increase of EUR 6,406 million in cash

and cash equivalents to EUR 54,031 at year end 2019.

Research and development, patents and licenses, etc.

Not applicable.

Trend information

For information regarding trend

information, see Item 5.A of this Form 20-F.

Critical Accounting Estimates

Reference is made to Note 1 ‘accounting

policies’ to the consolidated financial statements, for detailed

information on Critical Accounting Estimates.

Contents

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Item 6. Directors,

Senior Management and

Employees

Directors and senior management

Executive Board

Appointment, suspension and dismissal

Members of the Executive Board are appointed, suspended and dismissed by the General

Meeting. For the

appointment of Executive Board members, the Supervisory Board may draw

up a binding list, which may be

rendered non-binding by the General Meeting. A resolution of the General Meeting to render this list non-

binding, or to suspend or dismiss Executive Board members without this being proposed by the Supervisory

Board, requires an absolute majority of the votes cast. Additionally,

this majority must represent more than half

of the issued share capital. The Articles of Association exclude the waiver of the latter

requirement in a second

General Meeting. This ensures that significant shareholders proposals cannot

be adopted in a General Meeting

with a low attendance rate and can only be adopted with substantial

support of ING Group’s shareholders.

Candidates for appointment to the Executive

Board are subject to a suitability and reliability assessment by the

Dutch Central Bank and European Central Bank (DNB and ECB) and must continue

to meet these while in

function.

Function of the Executive Board

The Executive Board is charged with the management of ING Group. This includes responsibility for

setting and

achieving ING Group’s strategy,

objectives and policies, as well as ensuring the delivery of results. It also includes

the day-to-day management of ING Group. The Executive

Board is accountable for the performance of these

duties to the Supervisory Board and the General Meeting. The responsibility for the management of ING Group is

vested in the Executive Board collectively.

The organisation, powers and modus operandi of the Executive

Board

are detailed in the Charter of the Management Board.

The Charter of the Management Board is available on ing.com.

In accordance with the Banker’s Oath that is taken

by the members of the Executive Board, they must carefully

consider the interests of all stakeholders

of ING. In that consideration they must put the customer’s interests

the centre of all their activities.

ING Group indemnifies the members of the Executive Board against

direct financial losses in connection with

claims from third parties, as far as permitted by law,

on the conditions laid down in the Articles of Association

and their commission contract. ING Group has taken

out liability insurance for the members of the Executive

Board.

Profile of members of the Executive Board

ING Group aims for its Executive Board to have

an adequate and balanced composition. The Supervisory Board

regularly assesses the composition of the Executive

Board.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

The Supervisory Board has drawn up a profile to be used as a basis for selecting members of the Executive Board,

which is available on ing.com. This profile among others includes guidelines that relate to

the composition of the

Executive Board.

Diversity and succession planning

ING aims for the Executive Board of ING to consist of a diverse

selection of persons with executive experience,

preferably gained in the banking sector,

experience in corporate governance of large

stock-listed companies and

experience in the political and social environment in which such companies operate. In addition, there

should be

a good balance in the experience of and affinity with the desired nature and culture of the business of ING. ING

strives to have at least 30 percent of the seats held by

women, and at least 30 percent of the seats by men.

In 2018, ING introduced a new principle in a bid to bolster diversity within our organisation.

The 70 percent

principle gives managers a basis for building mixed teams around appropriate

dimensions of diversity (with a

focus on gender,

nationality and age group) and strives for a 30 percent difference

in team composition. It is our

ambition to adhere to this principle across the organisation within both local and global teams. This principle is

incorporated into succession planning for the Executive

Board.

The Supervisory Board is responsible for selecting and nominating candidates for appointment or reappointment

to the Executive Board,

among others based on the Executive Board profile.

Finding suitable candidates remains challenging, as there are numerous requirements

to take into account,

including gender to enhance the composition of the Executive Board and specific criteria for each function,

including regulatory requirements.

As an example to demonstrate the aforementioned:

with the departure of the CEO Ralph Hamers on 30 June

2020, the Supervisory Board was faced with the challenge of appointing a successor.

Considering all aspects the

Supervisory Board appointed Steven van Rijswijk as the successor of Ralph Hamers with effect

from 1 July 2020.

The Supervisory Board concluded that Steven van Rijswijk has the right combination of experience, leadership

skills and deep understanding of ING’s business to lead ING into

the next phase of ING’s strategic

direction.

With the position change of Steven van Rijswijk on 1 July 2020, the CRO position became vacant.

ING appointed Ljiljana Čortan as CRO of ING and member of the Management Board Banking with effective date

1 January 2021. The Supervisory Board will propose to the shareholders to appoint Ljiljana Čortan as member of

the Executive Board at the AGM on 26 April 2021. In terms of the dimensions of diversity,

Ljiljana Čortan will add

both nationality and gender diversity to the Executive Board and Management

Board in line with our 70 percent

principle.

Succession planning for Executive Board positions is continuously worked

on, balancing the career advancement

of (female) senior managers, considering female candidates for

the role and bringing in talents from outside the

bank.

On 31 December 2020, there were no female members of the Executive Board.

ING considers that the preferred

gender balance will be achieved with the appointment of Ljiljana Čortan following the AGM on 26 April 2021.

ING is still looking long term and taking steps to improve the appointment

of women in senior positions

throughout the bank in line with the adopted diversity and inclusion principle.

Remuneration and share ownership

Members of the Executive Board are permitted to

hold shares in the share capital of ING Group for long-term

investment purposes. Transactions

by members of the Executive Board in these shares are subject to the ING

regulations for insiders. These regulations are available

on ing.com.

Details of the remuneration of members of the Executive

Board, including shares granted to them, together with

additional information, are provided in the Remuneration

report.

Ancillary positions/conflicting interests

No member of the Executive Board has corporate directorships

at listed companies outside ING.

Transactions involving actual or potential conflicts of interest

In accordance with the DCGC, transactions with members of the Executive Board in which there

are significant

conflicts of interest will be disclosed in the Annual Report.

Significant conflicting interests are considered

to be absent and are not reported if a member of the Executive

Board obtains financial products and services, other than loans, which are provided by ING Group subsidiaries in

Contents

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

the ordinary course of their business on terms that apply to all employees. In connection with the

aforementioned, such loans do not include banking and financial products in which the granting of credit is of a

secondary nature, e.g. credit cards and overdrafts in current

account.

For an overview of loans granted to members of the Executive

Board, the Remuneration report.

Information on members of the Executive Board

S.J.A. (Steven) van Rijswijk, chief executive officer (CEO)

(Born 1970, Dutch nationality, male; appointed

in 2017, term expires in 2021)

Steven van Rijswijk has been a member of the Executive Board since 8 May 2017. He was appointed

CEO and

chairman of the Executive Board and the Management Board Banking with effect

from 1 July 2020. Prior to this

he was ING’s CRO. The Supervisory Board will propose

to the shareholders to reappoint him as member of the

Executive Board and CEO of ING Group at the AGM on 26 April 2021.

He is responsible for the proper functioning of the Executive Board, the Management Board

Banking and its

committees, formulating and implementing ING’s

strategy and acting as main contact for the Supervisory Board.

He is also responsible for the following departments: Innovation, Legal,

Corporate Strategy,

Corporate HR, Centre

of Excellence Communications and Brand Experience and Corporate Audit Services. Steven

van Rijswijk joined

ING in 1995 in the Corporate Finance department holding various positions in the areas of Mergers and

Acquisitions and Equity Markets. Before becoming a member of the Executive

Board, he was global head of Client

Coverage at Wholesale Banking.

He holds a master’s degree in business economics from Erasmus University Rotterdam

(the Netherlands).

Relevant positions pursuant to CRD IV

CEO and chairman of the Executive Board of ING Groep N.V.

and of the Management Board Banking of ING Bank

N.V.

Other relevant ancillary positions

Member of the Management Board of the Dutch Banking Association (Nederlandse Vereniging van

Banken),

member of the Board of Directors of the Institute of International Finance, Inc.

T. (Tanate) Phutrakul, chief financial officer (CFO)

(Born 1965, Thai nationality, male; appointed in 2019, term expires

in 2023)

Tanate

Phutrakul was appointed as CFO of ING Groep N.V.

and ING Bank N.V.

and member of the Management

Board Banking of ING Bank on 7 February 2019. Subsequently, he was appointed

as a member of the Executive

Board of ING Groep N.V.

at the AGM on 23 April 2019.

Tanate

Phutrakul is responsible for ING’s

financial departments, Group Treasury (including capital

management

activities), Investor Relations, Group Research

and Regulatory and International Affairs. Before

his appointment

to the Executive Board, he was ING Group controller

in Amsterdam and between 2015-2018 he was the CFO of

ING in Belgium.

He holds a master’s degree in Engineering from Imperial College, University of London, and an MBA from

Harvard

Business School.

As from 1 July 2020 Tanate

Phutrakul temporarily assumed the responsibility for risk on the Executive

Board until

the appointment of a successor to ING’s former CRO

Steven van Rijswijk.

Relevant positions pursuant to CRD IV

CFO and member of the Executive Board of ING Groep N.V.,

CFO and member of the Management Board Banking

of ING Bank N.V.,

and Non-executive member of the board of ING Belgium N.V./S.A.

Other relevant ancillary positions

None.

Temporary status chief risk officer (CRO)

With the position change of Steven van Rijswijk on 1 July 2020, the CRO position became vacant.

In November 2020, ING announced the appointment of Ljiljana Čortan as CRO and member of the Management

Board Banking from 1 January 2021. In the interim,

the day-to-day risk management activities were performed by

Karst Jan Wolters

reporting to chief financial officer Tanate

Phutrakul.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Changes in the composition

Ralph Hamers stepped down from his position as CEO and chairman of the Executive Board of ING Groep

N.V.

and of the Management Board Banking of ING Bank N.V.

as of 30 June 2020.

He was succeeded by Steven van Rijswijk.

The Supervisory Board will propose to the shareholders to appoint Ljiljana Čortan as member of the Executive

Board of ING Group at the AGM on 26 April 2021 (see ‘Diversity and succession planning’ above).

Supervisory Board

Appointment, suspension and dismissal

Members of the Supervisory Board are appointed, suspended and dismissed by the General Meeting. For the

appointment of Supervisory Board members, the Supervisory Board may draw up a binding list, which may be

rendered non-binding by the General Meeting.

A resolution of the General Meeting to render this list non-binding, or to suspend or dismiss Supervisory Board

members without this being proposed by the Supervisory Board, requires an absolute majority of the votes cast.

Additionally, this majority must represent

more than half of the issued share capital. The Articles of Association

exclude the waiver of the latter requirement

in a second General Meeting. This ensures that significant proposals

of shareholders cannot be adopted in a General Meeting with a low attendance

rate and can only be adopted

with substantial support of ING Group’s

shareholders.

Candidates for appointment to the Supervisory Board are subject to a suitability and reliability assessment by

the

Dutch Central Bank and European Central Bank (DNB and ECB) and must continue

to meet these while in

function.

Function of the Supervisory Board

The function of the Supervisory Board is to supervise the policy

(beleid)

of the Executive Board and the general

course of affairs of ING Group and the business connected with it, as well as to

provide advice to the Executive

Board.

In line with Dutch company law,

the Articles of Association, the DCGC as well as the Charter of the Supervisory

Board, all members of the Supervisory Board are required to:

•

be guided by the interests of ING Group and the business connected with it, thereby carefully balancing the

interests of all stakeholders

of ING and when drawing that balance, give paramount importance to the

customer’s interest, as set out in the Dutch Banker’s

Oath;

•

foster a culture focused on long-term value creation,

financial and non-financial risk awareness, compliance

with the Company’s risk appetite, responsible and ethical behaviour and stimulate

openness and

accountability within ING and its subsidiaries;

•

perform their duties without mandate and independent of any interest in the business of ING;

•

refrain from supporting one interest without regard

to the other interests involved;

and

•

ensure that it functions effectively.

According to the Banker’s Oath that is taken

by the members of the Supervisory Board, they must carefully

consider the interests of all stakeholders

of ING. In that consideration they must put the customer’s interests

the centre of all their activities. Certain resolutions of the Executive Board, specified in the Articles of Association,

in the Charter of the Management Board and in the Charter of the Supervisory Board, are subject to approval by

the Supervisory Board.

In accordance with the Articles of Association ING Group indemnifies the members of the Supervisory Board as

far as legally permitted against direct

financial losses in connection with claims from third parties lodged or

threatened to be lodged against them by virtue of their service as a member of the Supervisory Board.

Profile of members of the Supervisory Board

The Supervisory Board has drawn up a profile to be used as a basis for its composition. It is available on ing.com.

In view of their experience and the valuable contribution that former members of the Executive

Board can make

to the Supervisory Board, it has been decided, taking into account the size of the Supervisory Board and ING’s

wide range of activities that such individuals may become members of the Supervisory Board of ING Group.

Former Executive Board members must wait at least

one year before becoming eligible for appointment to

the

Supervisory Board.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

Former members of the Executive Board are not eligible for appointment

to the position of chairman or vice-

chairman of the Supervisory Board.

After a former member of the Executive Board has been appointed to the

Supervisory Board, this member may

also be appointed to one of the Supervisory Board’s committees.

However,

appointment to the Audit Committee

is only possible if the individual in question resigned from the Executive Board at least three

years prior to such

appointment.

The Supervisory Board of ING shall consist of a mix of persons with executive experience, preferably

gained in the

banking sector,

experience in corporate governance of large stock

-listed companies and experience in the

political and social environment in which such companies operate. In the selection of Supervisory Board

members, ING is striving for a balance in nationality,

gender, age,

and educational and work background. In

addition, there should be a balance in the experience and affinity with the nature and culture of the business of

ING and its subsidiaries. More specifically ING strives to have at least 30 percent

of the seats held by women, and

at least 30 percent of the seats by men. These guidelines that relate to the composition of the Supervisory Board,

are laid down in the Supervisory Board Profile. Based on this profile, the Supervisory Board is responsible for

selecting and nominating candidates for appointment or reappointment to

the Supervisory Board.

With respect to gender diversity,

three female members currently serve on the Supervisory Board: Mariana

Gheorghe, Margarete Haase and Herna Verhagen,

resulting in the Supervisory Board meeting its 30 percent

gender diversity target.

We believe the Supervisory Board is well balanced in terms of other relevant diversity

aspects. Overall, the

preferred emphasis on members with a financial or banking background has been maintained. In terms

nationality, the ratio

between Dutch and non-Dutch nationalities in 2020 was 56 - 44 percent.

Other diversity related aspects are also taken

into consideration in light of the overall Supervisory Board

composition.

ChapSuperV

Term of appointment of members of the Supervisory Board

As a general rule, Supervisory Board members step down from the Supervisory Board in the 4th, 8th, 10th or

12th year after their initial appointment. They are eligible for re-appointment

in the 4th year after their initial

appointment and, with explanation, also in the 8th and 10th year.

Under special circumstances the Supervisory Board may,

with explanation, deviate from this general rule, for

instance to maintain a balanced composition of the Supervisory Board and/or to preserve valuable expertise

and

experience. The retirement schedule is available on ing.com.

Ancillary positions/conflicting interests

Members of the Supervisory Board may hold other positions, including directorships, either paid

or unpaid.

CRD IV restricts the total number of supervisory board positions or non-executive directorships

with commercial

organisations that may be held by a Supervisory Board member to four,

or to two, if the Supervisory Board

member also has an executive board position. The European Central

Bank may, under special circumstances,

permit a Supervisory Board member to fulfil an additional supervisory board position or non-executive

directorship. Positions with, inter alia, subsidiaries or qualified holdings are not taken

into account in the

application of these restrictions. Such positions may not conflict with the interests

of ING Group. It is the

responsibility of the individual member of the Supervisory Board and the Supervisory Board collectively to ensure

that the directorship duties are performed properly and are

not affected by any other positions that the

individual may hold outside ING Group.

Members of the Supervisory Board are to disclose material conflicts of interest (including potential

conflicts of

interest) and to provide all relevant

information relating to them. The Supervisory Board – excluding the member

concerned – decides whether a conflict of interest exists.

In case of a conflict of interest, the relevant member of the Supervisory Board abstains

from discussions and

decision-making on the topic or the transaction in relation to which he or she has a conflict of interest with ING

Group.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Transactions involving actual or potential conflicts of interest

In accordance with the DCGC, transactions with members of the Supervisory Board in which there are material

conflicting interests will be disclosed in the Annual Report.

Any relation that a member of the Supervisory Board may have with an ING Group subsidiary as an ordinary,

private individual is not considered a significant conflict of interest.

Such relationships are not reported, with the

exception of any loans that may have

been granted.

For an overview of loans granted to members of the Supervisory Board, see the Remuneration

report.

Independence

The members of the Supervisory Board are requested to assess annually whether the criteria of dependence set

out in the DCGC do not apply to them and to confirm this in writing. On the basis of these criteria, all members of

the Supervisory Board are to be regarded as independent on 31 December 2020. On the basis of the NYSE listing

standards, all members of the Supervisory Board are independent.

Permanent committees of the Supervisory Board

On 31 December 2020, the Supervisory Board had four permanent committees: the Risk Committee, the Audit

Committee, the Nomination and Corporate Governance Committee

and the Remuneration Committee. An

organisational chart of the four permanent committees of the Supervisory Board can be found

above.

The organisation, powers and conduct of the Supervisory Board are detailed in the Supervisory Board Charter on

ing.com.

Separate charters have been drawn

up for the Risk Committee, the Audit Committee, the Nomination and

Corporate Governance Committee and the Remunerat

ion Committee. These charters are also available on

ing.com. A short description of the duties of the four permanent committees follows below.

The Risk Committee assists and advises the Supervisory Board with performance of its duties in relation to

overseeing (i) the setting and monitoring of the Company’s

risk appetite and risk strategy for all types of risk

including but not limited to financial and non-financial risk, (ii) the effectiveness of the internal risk management

and control systems and (iii) other related

risk management topics. The Risk Committee shall prepare the

discussions within and decisions of the Supervisory Board on such matters.

On 31 December 2020, the members

of the Risk Committee were: Mike Rees (chairman), Jan Peter

Balkenende, Juan Colombás, Mariana Gheorghe,

Margarete Haase, Herman Hulst, Harold Naus and Hans Wijers.

The Audit Committee assists and advises the Supervisory Board with the performance of its duties in relation to

the integrity and quality of the Company’s financial reporting and the related effectiveness

of the Company’s

internal risk management and control systems

and shall prepare the discussions within and the decisions of the

Supervisory Board on such matters. On 31 December 2020, the members of the Audit Committee were:

Margarete Haase (chairwoman), Juan Colombás, Herman Hulst, Mike Rees

and Hans Wijers.

The appointment of Margarete Haase in 2017 as Supervisory Board member became effective

as per 1 May 2018

and per that date Margarete Haase is considered a financial expert

as defined by the SEC in its final rules

implementing Section 407 of the Sarbanes-Oxley Act of 2002.

The Nomination and Corporate Governance Committee assists the Supervisory Board with the performance

of its

duties in relation to selection and nomination of among others the Supervisory Board members and

Management Board members,

talent management and the effectiveness of

the Company’s governance arrangements

and shall prepare the discussions with and decisions of the Supervisory

Board on such matters.

On 31 December 2020, the members of the Nomination

and Corporate Governance Committee were: Hans Wijers

(chairman), Mariana Gheorghe and

Herna Verhagen.

The Remuneration Committee assists the Supervisory Board, with the performance of its duties in relation

remuneration policies and the application and compliance thereof and shall prepare the discussion within and

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

decisions of the Supervisory Board on such matters. In doing so, the Remuneration

Committee will take into

account the adequacy of information provided to shareholders on remuneration

policies and practices. On 31

December 2020 the members of the Remuneration Committee were: Herna Verhagen

(chairwoman), Mariana

Gheorghe, Harold Naus and Hans Wijers.

The composition of the Supervisory Board committees can also be found on ing.com.

Remuneration and share ownership

Remuneration of the members of the Supervisory Board is determined by the General Meeting and is not

dependent on the results of ING Group. Details of remuneration are

provided in the Remuneration report.

Members of the Supervisory Board are permitted to hold shares in the share capital of ING Group for

long-term

investment purposes. Transactions

by members of the Supervisory Board in these shares are subject to the ING

insider regulations,

which are available on ing.com.

Information on members of the Supervisory Board

G.J. (Hans) Wijers (chairman)

(Born 1951, Dutch nationality, male; appointed

in 2017, term expires in 2021)

Former position: chief executive officer and member of the Executive

Board of AkzoNobel N.V.

Relevant positions pursuant to CRD IV

Chairman of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

and member of the supervisory board of Hal

Holding N.V.

Other relevant ancillary positions

Member of the Temasek European

Advisory Panel of Temasek

Holdings Private Limited.

A.M.G. (Mike) Rees

(Born 1956, British nationality, male; appointed in 2019, term

expires in 2023)

Former position: Deputy CEO of Standard

Chartered Bank PLC.

Relevant positions pursuant to CRD IV

Vice-chairman of the Supervisory Board of ING Groep N.V./ING

Bank N.V.,

non-executive chairman of Athla

Capital Management Ltd.,

non-executive chairman of Travelex

Topco Limited

and non-executive chairman of the

board of Satsanga Fintech Holdings.

Other relevant ancillary positions

Non-executive chairman of Mauritius Africa FinTech

Hub.

J.P. (Jan Peter) Balkenende

(Born 1956, Dutch nationality, male; appointed

in 2017, term expires in 2021)

Former position: partner EY (on corporate responsibility).

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

Other relevant ancillary positions

Professor of governance, institutions and internationalisation

at Erasmus University Rotterdam

(the

Netherlands), external senior adviser to EY,

member of the Supervisory Board of Goldschmeding Foundation,

chairman of the Board of Maatschappelijke Alliantie (the Netherlands) and chairman of the Board of Noaber

Foundation.

J. (Juan) Colombás

(Born 1962, Spanish nationality, male, appointed in 2020, term

expires in 2024)

Former position: chief operating officer and executive

board member of the board of directors of Lloyds Banking

Group.

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

Other relevant ancillary positions

None.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

M. (Mariana) Gheorghe

(Born 1956, Romanian nationality, female,

appointed in 2015, term expires in 2023)

Former position: CEO of OMV Petrom SA.

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

and non-executive director of ContourGlobal

Plc.

Other relevant ancillary position

Member of the Advisory Council of the Bucharest Academy of Economic Studies, Romania.

M. (Margarete) Haase

(Born 1953, Austrian nationality, female;

appointed in 2017, term expires in 2021)

Former position: CFO of Deutz AG.

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

(effective per 1 May 2018), member of the

supervisory board and chairwoman of the audit committee of Fraport AG, member of the supervisory board and

chairwoman of the audit committee of Osram Licht AG, and member of the supervisory board and chairwoman

of the audit committee of Marquard & Bahls AG.

Other relevant ancillary positions

Chairwoman of the Employers Association of Kölnmetall and member of the German Corporate Governance

Commission.

H.A.H. (Herman) Hulst

(Born 1955, Dutch nationality, male, appointed

in 2020, term expires in 2024)

Former position: global vice chair EY Japan and member of Global Practice Group.

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

Other relevant ancillary positions

None.

H.H.J.G. (Harold) Naus

(Born 1969, Dutch nationality, male, appointed

in 2020, term expires in 2024)

Former position: global head of Trading Risk Management

and general manager Market Risk management of ING

Bank N.V.

Relevant positions pursuant to CRD IV

Member of the Supervisory Board of ING Groep N.V./ING

Bank N.V.

CEO of Cardano Risk Management B.V.

and

CFO of Cardano Holding Ltd.

Other relevant ancillary positions

Chairman of the Curatorium VU Amsterdam “Risk Management for

Financial Institutions”

H.W.P.M.A. (Herna) Verhagen

(Born 1966, Dutch nationality, female;

appointed in 2019, term expires in 2023)

Former position: member of the Supervisory Board of SNS Reaal N.V.

(now: SRH N.V.).

Relevant positions pursuant to CRD IV

Member of the Supervisory

Board of ING Groep N.V./ING

Bank N.V.

CEO of PostNL N.V.

and non-executive board

member and chairwoman of the nomination committee of Rexel SA.

Other relevant ancillary positions

Member of the supervisory board,

member of the audit committee of Het Concertgebouw N.V

member of the

advisory council of Goldschmeding Foundation and member of the Board of VNO-NCW (inherent to her position

at Post NL N.V.).

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Changes in the composition

Eric Boyer de la Giroday and Hermann-Josef Lamberti retired from

the Supervisory Board effective from the close

of 2020 AGM. Juan Colombás, Herman Hulst and Harold Naus were appointed by the AGM of 28 April 2020. The

appointments of Herman Hulst and Harold Naus became effective on this date.

The appointment of Juan

Colombás became effective on 1 October 2020.

Company secretary

The Supervisory Board and Executive Board are assisted by the company secretary

Cindy

van Eldert-Klep.

Contents

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

B. Compensation

Remuneration report

FOR INFORMATION ONLY

In what was a challenging year for ING, one of the biggest factors

influencing our business was

Covid-19. First and foremost,

it’s a human tragedy that has affected

the lives, jobs and wellbeing of

people everywhere, including our customers and employees. Naturally,

it also affected our

business performance, which has a direct impact on the way we recognise

and reward many of our

employees. In this context there will be no changes

to remuneration for the Executive

Board and

the Supervisory Board in 2021 and the Executive Board will forgo

their variable remuneration for

performance year 2020.

ING’s approach to remuneration

is designed to attract, motivate and retain

people with the skills, abilities, values

and behaviours needed to achieve its strategy.

At the same time, we have a responsibility to be balanced and

fair,

taking into account all our stakeholders

in what was, and continues to be, a difficult environment.

That’s why we aim to have an ongoing dialogue with our regulators,

customers, shareholders , works councils

and other stakeholder groups. Due to the Covid-19 restrictions,

we engaged with our stakeholders

in 2020 mainly

through indirect and online channels. This included consultations in preparation for

this year’s remuneration

approach, strengthening the link between performance and remuneration

outcomes. We will continue these

interactions in 2021.

Our view on remuneration

ING seeks to effectively reward

success and avoid rewarding for failure.

We aim to offer well-balanced

remuneration that focuses on creating short-

and long-term value for all our stakeholders. We

make our biggest

contribution to society through our business: processing payments, providing loans and protecting

people’s

money. At

the same time, as a gatekeeper to the financial system

we have responsibility to keep our bank safe,

secure and compliant. Achieving the balance between our function as a bank and managing the inherent risks

this brings, is reflected in our remuneration approach.

Our remuneration principles are important to achieve our strategy

and our purpose – empowering people to stay

a step ahead in life and in business. These principles apply to all employees, including members of the Executive

Board.

The 2020 Remuneration Report is subject to an advisory vote at the AGM in April 2021. In the report we

look

back on the year 2020. We report on ING’s

performance and how 2020 events such as the coronavirus pandemic

impacted our business results and subsequently remuneration. We

explain how the Executive Board and

Supervisory Board remuneration policies are implemented and share details of remuneration

awarded in 2020 to

the Executive Board and to the Supervisory Board. In addition, we also set out the key performance

indicators for

the year ahead.

Halfway through the year,

Steven van Rijswijk succeeded Ralph Hamers as chief executive

officer.

The same

remuneration principles apply to him as did to his predecessor.

As such, Steven’s remuneration

until 1 July 2020

is reflected in his previous role as chief risk officer,

and in the second half of the year as CEO.

In line with ING’s commitment to increase transparency

and accountability,

this year we provide insight into the

organisational as well as the personal performance objectives of the Executive

Board members. Among other

things we aim to clarify the performance metrics used for awarding variable remuneration,

how targets are set,

how achievements are measured, and the important role risk management plays

in influencing remuneration,

including the pre-

and post award risk assessment.

In addition, we set out the remuneration approach that applies to all employees. We

explain more about how

remuneration works within ING. This includes the performance management process

and its link to

remuneration, as well as the measures we have in place to mitigate

risk.

Remuneration policy

This 2020 Remuneration Report is the first to reflect

ING’s new Executive Board

and Supervisory Board

remuneration policies, which came into effect

on 1 January 2020. The policies were drawn up based on the

various viewpoints, interests, remarks

and concerns of our stakeholder groups. When presented

in March 2020,

stakeholders were largely

positive. At the Annual General Meeting (AGM) in April 2020, shareholders approved

the Executive Board and Supervisory Board remuneration policies with 94.4% and 98.6% of the votes

respectively.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Under the 2020 policy, and in line with the requirements laid down in the Dutch Banking Code, the total

direct

compensation of the Executive Board is below the median of our peer group. This group is selected on the basis

of geography,

talent market, size and governance framework,

as well as a balancing factor to ensure relevance of

our benchmark. Our peer group in 2020 consists of eight comparable Dutch companies and eight relevant

European financial services providers, which are listed in the ‘Total

direct compensation’

paragraph.

Performance year 2020

The impact of the global coronavirus pandemic reverberated

across all of our businesses in all locations. While

2020 was a tough year,

ING’s financial results remained resilient and

we continued to attract more primary

customers, even during the wide-spread lockdowns that

took place around the world. At the same time, the

economic headwinds required us to remain flexible and sharpen our focus on activities that will ensure ING

delivers on its strategic priorities. And of course, there

is a link between performance and remuneration.

In light of the economic headwinds and the pressure Covid-19 placed on our business, our customers and on

society, the Supervisory Board and the Executive

Board jointly agreed that the Executive Board members

will not

receive any variable remuneration rela

ted to the performance year 2020.

Additionally, the Supervisory Board decided not to increase the base salary of Executive

Board members from 1

January 2021. The fees for the Supervisory Board will also be unchanged for 2021.

For all other eligible staff,

variable remuneration is based on group, business line and individual performance

criteria, is for at least 50% based on non-financial targets and comes in the form

of discretionary and collective

variable remuneration. The total amount awarded

was significantly lower than for the previous year,

reflecting

declining financial performance and recognising broader stakeholder

interests. The biggest reductions occur at

the more senior levels of the organisation (see ‘2020 specifics’ for more information).

This is in line with the

recommendations of the European Central Bank urging moderation

with respect to awarding variable

remuneration. Similarly,

ING complies with the prevailing ECB recommendation on shareholder distributions.

In closing, I’d like to

express my heartfelt gratitude

to every ING employee, at every level of the organisation, for

their ongoing commitment and dedication over the past year.

It hasn’t always been easy to adapt to working at a

distance, often while also juggling the demands of family life or recovering from

illness. Yet even in the most

challenging circumstances, they have shown true orange spirit and continued

to take things on and make them

happen for customers, for ING and for all stakeholders.

Thank you.

Herna Verhagen

Chairman of the Supervisory Board Remuneration Committee

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Remuneration Report Executive Board and Supervisory Board

FOR ADVISORY VOTE AT

2021 ING GROEP N.V.

ANNUAL GENERAL MEETING (AGM)

About this report

This Remuneration Report explains the 2020 Executive

Board remuneration policy (hereafter called the 2020 EB

remuneration policy) and 2020 Supervisory Board remuneration policy (hereafter

called the 2020 SB

remuneration policy) and how these have been implemented. Both these policies were approved

at the 2020

AGM. This section of the report is the Remuneration Report as referred

to in the Dutch act implementing the

Shareholder Rights Directive II (SRD II). It will be presented to shareholders at

the 2021 AGM for an advisory vote.

An explanation of how the results of this vote are taken

into account will be included in the 2021 Remuneration

Report.

This report is prepared in the spirit of the draft (non-binding) ‘Guidelines on the standardised

presentation of the

remuneration report’ from the European Commission published in March 2019. Although the finalised guidelines

were expected to be published in 2020, these were not available at

the time of preparing this report. In that

context therefore,

2020 should still be considered a transitional year though with increased transparency where

possible. This is for instance processed in the paragraphs ‘2020 Executive

Board performance assessment &

reward process’ and ‘2020 Executive Board

performance evaluation’.

In the 2021 Remuneration Report we aim

to disclose fully in line with the final guidelines (if available).

2020 AGM

The 2019 Remuneration Report was presented

for an advisory vote at the AGM held on 28 April 2020 (hereafter

called the 2020 AGM). The outcome was that 93.4% of shareholders were in favour

of the report. There were no

additional comments or questions on the advisory vote, aside from the ask for additional transparency on

variable remuneration of the Executive Board. As explained

at the 2020 AGM, the 2019 Remuneration Report

included a new approach for Executive Board variable remuneration

also setting out how this links to

performance as of performance year 2020. The 2020 Remuneration Report

aims to provide greater transparency

regarding the Executive Board performance,

as also promised during our stakeholder consultation.

In addition to the 2019 Remuneration Report, the 2020 EB remuneration

policy and 2020 SB remuneration policy

were up for a binding vote at the 2020 AGM. To

come to a balanced proposal we incorporated feedback

from the

broad stakeholder consultation carried

out in the autumn and winter of 2019. This extensive stakeholder reach-

out was essential before any decision over 2020 was taken.

The vote was 94.4% in favour of the EB remuneration

policy and 98.6% in favour of the SB remuneration policy.

Both policies were adopted by shareholders and

became effective retroactively

from 1 January 2020 until the 2024 AGM at the latest.

We remain aware of the fact that

remuneration is an important topic for many

stakeholder groups and that

viewpoints on the topic may vary.

The Supervisory Board is fully committed to ensuring that our approach to

remuneration achieves a balance that aligns the best interest

of ING and the viewpoints of our stakeholders.

Stakeholder engagement is a key

element in the formulation of our remuneration policies, as demonstrated

the extensive process we carried out in 2019. The Supervisory Board will continue to foster

a transparent

dialogue on remuneration and future policy amendments.

Board changes and business events 2020

Ralph Hamers stepped down as chief executive officer (CEO)

and member of the Executive Board of ING Group

on 30 June 2020. The Supervisory Board appointed Steven van Rijswijk as his successor from 1 July 2020. Steven

van Rijswijk, who was ING’s chief risk officer

(CRO), was already a member of the Executive Board. The agreed

remuneration package for Steven

van Rijswijk is the same as for the previous CEO and in line with the 2020 EB

remuneration policy.

Until the appointment of a new CRO, Karst Jan Wolters,

reporting to chief financial officer (CFO) Tanate

Phutrakul, carried out the day-to-day risk management activities ad interim.

On 6 November 2020 it was

announced that Ljiljana Čortan was appointed as the new CRO and member of the Management Board Banking

effective 1 January 2021. The agreed remuneration package

for Ljiljana Čortan is the same as for the previous

CRO and in line with the 2020 EB remuneration policy.

The targets for 2021 are set in anticipation of her CRO role

as the Supervisory Board will propose to shareholders to appoint her as member of the Executive Board

and CRO

of ING Group at the AGM in April 2021.

Shareholders at the 2020 AGM approved the appointment of Juan Colombás, Herman Hulst and Harold

Naus to

the Supervisory Board. Robert Reibestein resigned from the Supervisory Board effective

from 1 January 2020,

because of persistent health issues, while Eric Boyer de la Giroday and Hermann-Josef Lamberti retired

at the end

of the 2020 AGM.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Main decisions on the remuneration of the Executive Board and Supervisory Board

for 2021

To summarise, the following

decisions have been made in relation to remuneration for

2021:

◾

no changes to the 2020 EB and SB remuneration policies will be proposed;

◾

the Supervisory Board and Executive Board jointly agreed that the Executive

Board members will not

receive any variable remuneration related

to the performance year 2020;

◾

the Supervisory Board decided not to increase the base salary of the Executive Board members from 1

January 2021; and

◾

no changes to the current remuneration structure

for the Supervisory Board members will be made for

2021.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Remuneration Executive

Board

Executive Board remuneration policy

The 2020 EB remuneration policy complies with applicable laws and regulations and is in line with the

remuneration principles that apply to all ING employees.

The 2020 EB remuneration policy is disclosed in full on ing.com under the section ‘Remuneration’.

Should policy

changes be proposed, we will first engage with our stakeholders

to inform and discuss the proposed changes,

after which a revised version of the 2020 EB remuneration policy will be submitted

for adoption by shareholders

at the General Meeting before it becomes effective.

Please note that the following paragraphs, present

a brief

summary of the current applicable 2020 EB remuneration policy.

Total direct compensation

Total

direct compensation is the total of fixed and variable remuneration,

excluding benefits such as pension and

allowances.

Total

direct compensation for the Executive Board members

is determined and reviewed periodically by the

Supervisory Board. In line with the 2020 EB remuneration policy, the Executive

Board’s total

direct compensation

for 2020 was compared to a new peer group as formulated

in the 2020 EB remuneration policy. This peer group

is based on five guiding principles, reflecting ING’s current profile,

and further explained in the 2020 EB

remuneration policy.

These principles can be described as follows.

Guiding principle

Short description

Geography

ING is headquartered in the Netherlands, but has an international profile

Talent market

ING is increasingly experiencing a cross-pollination of talent across

sectors/industries, not limited to traditional banking competitors

Size

ING acknowledges the importance of including companies that are broadly

comparable in terms of size and complexity

Governance framework

ING is subject to the Dutch (financial services) regulatory framework and

operates within a Dutch stakeholder

environment

Balancing

ING acknowledges the importance of retaining sight of relevant peer companies

that do not match on the other criteria

In line with the Dutch Banking Code, the peer group should consist of both financial and non-financial companies,

taking into account the relevant international

context. In addition, the Supervisory Board decided to exclude the

UK and Switzerland from our peer group, due to very different

pay structures in their financial sectors. Smaller

banks and companies were also excluded because these are less complex

compared to a large enterprise like

ING. The composition of the peer group is explicitly not included in the 2020 EB remuneration policy.

In 2020, the

peer group comprised:

ABN AMRO

Ahold Delhaize

BBVA

Deutsche Bank

Aegon

ASML

Banco Santander

Intesa Sanpaolo

NN Group

Heineken

BNP Paribas

Societe Generale

Rabobank

Philips

Credit Agricole

UniCredit

We aim to keep our peer group as constant

as possible. In line with the requirements laid down in the Dutch

Banking Code the total direct compensation under the 2020 EB remuneration policy is below the median of the

peer group. The calculation of the position towards the median of the peer group has been performed based on

the actual fixed remuneration 2020 and the actual variable remuneration

related to performance year 2019. Due

to the fact that there was no variable remuneration

related to the current performance year

(2020), we use the

variable remuneration related to the previous

performance year (2019) for this calculation.

1 The exact composition of the peer group is disclosed in the Annual Report annually retroactively.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

Fixed remuneration

The individual base salaries are set according to the role, responsibilities and experience of each Executive Board

member with reference to market

practice. The Remuneration Committee reviews

the individual base salaries of

the Executive Board members each year and advises the Supervisory Board on this. The Supervisory Board has

the discretion to increase the individual base salaries annually. The below factors

are given consideration in

determining their base salaries:

◾

the individual’s level of skill and performance;

◾

ING’s business performance, and market

conditions;

◾

internal pay ratios and salary increases for other employees within ING;

◾

remuneration level at the external peer group;

◾

public indexation reference points

(e.g. consumer price index); and

◾

stakeholder views.

Variable remuneration

for Executive Board members is limited to

a maximum of 20% of base salary in line with

legislative requirements. At least 50% of this is based on non-financial performance

criteria. The 2020 EB

remuneration policy provides for an at-target

variable remuneration of 16% of base salary.

If performance

criteria are exceeded, the Supervisory Board can increase the variable component to

the maximum. If

performance is below target, the variable component will be decreased,

potentially to zero. All variable

remuneration is awarded fully in shares. There is a minimum holding period of five years

from the award date

plus an additional holding year as of the vesting date. This combination (i.e. all shares plus a long holding period)

fosters alignment with shareholders and a focus

on the long term.

The Supervisory Board pre-determines the performance criteria for the Executive

Board each year to ensure

alignment between ING's strategy,

performance objectives and long-term interest.

For further details on the pay-out of variable remuneration

please see the 2020 EB remuneration policy which is

disclosed in full on ing.com under the section ‘Remuneration’.

On the right, is a visual illustrating the potential pay-out scheme of variable remuneration

for Executive Board

members.

Contents

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information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

100

Pension

Since 1 January 2015, all members of the Executive Board participate in the Collective Defined Contribution

pension plan, which is accrued on an annual salary of up to €110,111 for 2020. This is the same as for all

employees working in the Netherlands without a supplementary pension scheme. Executive Board members

are

compensated for the lack of pension accrual above this amount by means of a savings allowance (see ‘Benefits’),

to be annually determined, on the same terms that apply to other participants in the Dutch pension scheme. The

set-up of this compensation for the lack of pension accrual is in line with best practices.

Benefits

Executive Board members are eligible for additional benefits, such as:

◾

the use of a company car;

◾

contributions to company savings plans;

◾

individual savings allowance;

◾

expatriate allowances (if applicable);

◾

banking and insurance benefits from ING (on the same terms as for other employees of ING in the

Netherlands);

◾

tax and financial planning services to ensure compliance with the relevant legislative requirements.

Tenure

Members of the Executive Board are appointed by shareholders

at the AGM for a maximum period of four years.

They may be reappointed by shareholders at the General

Meeting in line with ING’s Articles of Association and

applicable rules and regulation. Executive Board members have

a commission contract for an indefinite period.

ING has the option to terminate the contract if a member is not reappointed by shareholders

at the AGM, or if

their membership of the Executive Board is terminated. There is a three

-month notice period for individual board

members and a six-month period for ING. During this time the board member continues to work

and in principle

remains eligible for all agreed remuneration components.

In the event of an involuntary exit, Executive Board

members are eligible for an exit arrangement. If termination

of the contract is based on mutual agreement, the Executive Board

member is also eligible for a severance

payment. These arrangements are subject to specific requirements

(e.g. limited to a maximum of one year of

fixed base salary and under the condition that there should be no reward for failure).

If an Executive Board

member departs voluntarily or in circumstances involving fraud,

gross negligence, wilful misconduct or any

activity detrimental to ING, no severance payment or award

of variable remuneration over the performance year

will be made.

Periodic review of the Executive Board remuneration policy and the remuneration

awarded

In accordance with the 2020 EB remuneration policy,

the Supervisory Board annually determines the actual

remuneration for members of the Executive

Board, based on advice from the Remuneration Committee of the

Supervisory Board.

The Remuneration Committee’s

responsibilities include preparing the Supervisory Board for decisions regarding

the individual remuneration of members of the Executive Board.

Remuneration proposals for individual Executive

Board members are drawn up in accordance with the 2020 EB remuneration

policy and cover the following

aspects: remuneration structure, the amount of the fixed and variable

remuneration components, the

performance criteria used, scenario analyses that were carried out and, if and when considered appropriate

stakeholder engagement, review

of the EB remuneration policy,

the pay ratios within the company and its

affiliated enterprises. In the performance of its tasks the Remuneration

Committee works closely together with

the Risk Committee.

The Remuneration Committee takes

note of the views of individual Executive Board members with regard

to the

amount and structure of their own remuneration, including the aspects mentioned above.

Special employment conditions

Special employment conditions, for example to secure the recruitment

of new executives, may be used in

exceptional circumstances subject to approval

by the Supervisory Board. The Supervisory Board aims to minimise

these payments and ensure they are compliant with regulatory requirements.

This is in line with the 2020 EB

remuneration policy.

In 2020, there were none.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

101

2020 Remuneration Executive Board

This section includes details of remuneration for current and former

Executive Board members relating to the

period served on the Executive Board in 2020.

In line with the Dutch Corporate Governance Code, ING calculates an internal

ratio of remuneration for Executive

Board members and a representative reference

group. Deemed most relevant for this ratio

is the total direct

compensation of the CEO compared to the average

total direct compensation of all ING employees. On this basis,

the internal ratio in 2020 was 1:28 (2019: 1:31, 2018: 1:29). For the sake of transparency

we also calculate the

ratio of total direct compensation for other Executive

Board members compared to the average

total direct

compensation of all ING employees. On that basis the internal ratio in 2020 was 1:19 (2019: 1:21, 2018: 1:20).

The lower ratios for 2020 compared to 2019, are

mainly because the Supervisory Board and the Executive Board

jointly agreed that the Executive Board members will not receive

any variable remuneration award related

to the

performance year 2020.

As was announced in February 2020, Ralph Hamers stepped down from his position as ING’s

CEO and chairman

of the Executive Board on 30 June 2020. As his departure was voluntary,

no exit arrangements were agreed or

paid, in line with the 2020 EB remuneration policy. All outstanding

variable remuneration that was awarded

previous years and not yet vested before

his departure, has lapsed. This means he will not receive any future

pay-outs of variable remuneration related

to previous performance years.

Remuneration versus company performance and average employee remuneration

The table on the next page shows the link between directors’ remuneration

(Executive Board and Supervisory

Board members), company performance and the average

remuneration of an ING employee. This is carried out

by showing the development of the remuneration for Executive

Board and Supervisory Board members over the

last five years presented in percentages.

With respect to the remuneration of the Supervisory Board, it should be

noted that there is no link to company performance in order to safeguard

its independent role. No component of

the remuneration of the Supervisory Board members is linked to company

performance, since this is all and only

dependant on attendance.

The relative performance of the company is presented

on three different metrics over the last five years.

The

metrics consist of:

◾

Retail primary relationships

◾

Profit before tax for ING Group

◾

Return on equity based on IFRS-EU Equity.

Finally, we present

the development of the remuneration on average

(per employee). For this number we use

the same data as is used to determine the internal ratio. As ING has only disclosed the internal ratio

since 2017,

no comparison for 2016 and 2015 is presented.

Due to the strict regulations on variable remuneration in the Netherlands (i.e. 20% bonus cap) and to the fact

that Executive Board members were not awarded

any variable remuneration for performance

year 2020, the link

between remuneration and company performance is correlated

but limited. Furthermore, the requirement that

variable remuneration must be based on at least 50% non-financial targets

means there is only a partial

relationship between the company’s financial performance

and the remuneration of Executive Board members.

2 Ralph Hamers stepped down from the Executive Board on 30 June 2020; Tanate

Phutrakul was appointed to the Executive Board

immediately after the AGM on 23 April 2019. Steven van Rijswijk was an Executive Board member for the full years 2018-2019. For 2020, a

pro-rata method is applied to his remuneration as CEO from 1 July 2020.

3 Total direct compensation

comprises fixed base salary and variable remuneration, excluding benefits such as pension arrangements, and

allowances.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

102

Development of directors’ remuneration, company

performance and employee remuneration

Amount in thousands of euros unless otherwise stated

FY 2020

FY 2020 vs FY 2019

6, 7

FY 2019 vs FY 2018

FY 2018 vs FY 2017

FY 2017 vs FY 2016

FY 2016 vs FY 2015

Directors remuneration (Executive

Board)

1, 2, 3, 4

Ralph Hamers

888

-55.9%

15.2%

-12.8%

1.4%

2.9%

Steven van Rijswijk

1,499

7.2%

16.2%

-11.8%

Tanate Phutrakul

1,222

25.6%

Company’s performance

4, 5

Retail primary relationships (in mln)

13.9

10%

14%

Profit before Tax

ING Group (continuing operations) (in mln)

3,809

-44%

-6%

23%

-4%

Return on equity based on IFRS-EU Equity

4.8%

-49%

-4%

-3%

Average employee remuneration

Average fixed and annual variable remuneration

-1.7%

-1.1%

Directors remuneration (Supervisory Board)

Hans Wijers

209

3.5%

9.2%

340.5%

Hermann-Josef Lamberti

-66%

1.4%

-1.4%

-5.4%

34.2%

Mike Rees

129

76.7%

Jan Peter Balkenende

-2%

200%

Juan Colombás

Mariana Gheorghe

108

-8.5%

12.4%

11.7%

-4.1%

145%

Eric Boyer de la Giroday

-64.8%

1.9%

-7%

23.9%

Margarete Haase

105

7.1%

55.6%

Herman Hulst

Harold Naus

Herna Verhagen

121

303.3%

1 The remuneration of the Executive Board consists of base salary and variable remuneration (total direct compensation).

2 Variable remuneration of the Executive Board is included in the year in which the performance was delivered

i.e. prior to the year in which it is paid out.

3 The fixed remuneration for the Executive Board did not change in 2019. Hence, the relative total

compensation increase from 2018 to 2019 is fully attributed to the fact that no variable remuneration was awarded

for performance year 2018. In addition, as Tanate Phutrakul

was not an

Executive Board member for the full year,

a comparison between 2018 and 2019 cannot be made.

4 Fixed remuneration for Executive Board members of ING is not linked

to company performance but is predominantly based on a benchmark exercise and total direct compensation of Executive

Board members should stay below the median of the benchmark, based on the Dutch Banking

Code. This has a mitigating effect on the correlation with the company performance.

5 Supervisory Board members do not receive any variable remuneration. Their remuneration is based on fixed fees related

to their role and number of meetings. The high fluctuations are caused by members joining or leaving the Supervisory Board during the year, role changes during the

year, and differences

in the number of meetings. Hence there is no correlation between the Supervisory Board remuneration and the company performance.

6 The decrease in the 2020 versus 2019 comparison for Ralph Hamers is due to the fact that his remuneration is only for the period from 1 January 2020 until 30 June 2020, when he stepped down as an Executive Board member.

The increase for Tanate

Phutrakul in this comparison is

because he was appointed by the AGM on 23 April 2019 and therefore his 2019 remuneration reflects a partial year as an Executive Board member while the 2020 remuneration presents

a full year as an Executive Board member.

The increase for Steven van Rijswijk in this comparison is

caused by his appointment as CEO as of 1 July 2020 and the higher remuneration package.

7 The decrease in the 2020 versus 2019 comparison for Hermann-Josef Lamberti and Eric Boyer de la Giroday is fully attributed to the fact that both retired after

the AGM on 28 April 2020. The increase in this comparison for Mike Rees and Herna Verhagen is because they were appointed

by the AGM on 23 April 2019 and therefore reflect a partial year as Supervisory Board members whereas 2020 is presented as a full year as a Supervisory Board member.

8 The decrease in the 2018 versus 2017 comparison for the CFO and CRO is fully attributed to the fact that for performance year

2018 no variable remuneration was awarded while over performance year 2017 variable remuneration was awarded.

Contents

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

103

2020 Executive Board performance assessment & reward process

The Executive Board performance process includes a number of key

steps. This process serves as the foundation

to determine the variable remuneration for

Executive Board members.

At the start of the performance year,

the Supervisory Board approves the financial and non-financial

performance measures applicable to Executive Board members

for the upcoming financial year:

◾

Financial performance measures

including profit-based and return-based measures.

◾

Non-financial performance measures

including customer,

people, strategy and sustainability measures.

Each performance measure is weighted and totals 100%. The Dutch Remuneration

Policy for Financial Enterprises

Act (Wet Beloningsbeleid Financiële Ondernemingen, WBFO) specifies that at least 50% of variable remuneration

metrics must be based on non-financial targets. The performance measures for

the CEO and CFO are based on

group performance. The measures for the CRO are based 75% on functional key

performance indicators (KPIs)

and 25% on group results, in line with regulations for control functions.

Throughout the year,

regular conversations take

place between the Supervisory Board and the Executive Board

to review their performance to date. While no formal assessments are

completed, progress of performance

measures is discussed and the extent to which progress is on track.

At the end of the year,

the Risk Committee and Remuneration Committee are

both responsible for providing

input into and assessing the performance of the Executive Board members to determine

the variable

remuneration to be awarded. They jointly advise the Supervisory Board on the recommendations

to get final

approval of the awards. This follows a multi-step

and integrated process that closely aligns with the way that

variable remuneration is determined for the wider ING workforce.

The process covers an assessment of their

performance, based on individual performance scorecards. It includes KPIs and targets agreed

at the beginning of

the performance year,

along with risk assessments measured on an ex-ante and ex-post risk adjustment basis.

The core performance scorecard for each Executive

Board member consists of both quantitative and qualitative-

based KPIs. Quantitative-based KPIs are assessed on a primarily formulaic basis where the expected target

performance level must be achieved before

the on-target pay-out can be earned. Qualitative-based KPIs are

assessed using a standard three-point rating scale:

1 = maximum = exceeding expectations; 2 = target

= meeting expectations; 3 = threshold = not meeting

expectations. The overall outcome of the performance

scorecard assessment based on the above is the ‘starting

point’ for determining the variable remuneration of the Executive Board

members.

The integrated performance assessment process for

determining variable remuneration also takes

into account

financial and operational performance, risk and compliance, as well as behaviour and conduct of each Executive

Board member.

This is supported by a robust framework for considering risk and conduct, which is in line with

regulations. It includes the following elements:

◾

Performance hurdles

– Executive Board members are only eligible for consideration

for variable

remuneration if both of the performance hurdles are met. This is line with all employees who are eligible

for discretionary variable remuneration. See ‘Performance

hurdles’ for further details.

◾

Risk tests and adjustments

– Performance under three metrics (covering financial and non-financial risk)

is considered against thresholds set at the beginning of the financial year,

taking into account ING’s risk

appetite statement framework. When

these risk tests are not within the risk appetite it may lead to a

downward variable remuneration adjustment.

◾

Ex-post risk assessment

– Adjustments may be made based on risk management performance, including

events that had a financial or reputational impact on ING. Risk and Human Resources also assess

potential holdbacks or clawbacks impacting variable remuneration.

The CRO is responsible for recommending any risk-adjustments

to variable remuneration awards. The final

decision is at the level of the Supervisory Board. The Supervisory Board, based on the advice of the Remuneration

Committee and Risk Committee, decides on any risk adjustments (potentially to zero)

to variable remuneration

for Executive Board members.

As a final step in the process, in exceptional circumstances the Supervisory Board may

apply its discretion to

adjust upwards or downwards the variable remuneration

of Executive Board members.

Contents

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Part III

Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

104

2020 Executive Board base salary

The base salary of all Executive Board members increased with 1.5% on 1 January 2020, as was announced in our

2019 Annual Report. This decision was based on reliable indexation reference

points, including the (forecast)

Consumer Prices Index 2020, in line with the 2020 EB remuneration policy.

As stated in our 2019 Remuneration

Report, the increase for Executive Board members

is below the collective labour agreement CLA increase for

employees in the Netherlands.

2020 Executive Board performance evaluation

The Executive Board is evaluated along the following perform

ance target areas:

Financial

◾

Profit before tax

◾

Return on equity

Non-financial

◾

Customer (except for CRO)

◾

Sustainability

◾

People

◾

Strategic priorities

◾

Regulatory (for CRO only,

replacing Customer)

This section includes more details on the financial and non-financial performance of the Executive Board

members. Key financial achievements, collectively accomplished by the Executive

Board in 2020 in the

predefined target areas are summarised in one table. The non-financial, individual performance

of each the

Executive Board members is summarised in separate

tables.

Financial performance

Measure

Target - minimum

Target - maximum

Performance

Assessment

Profit before tax (CEO/CFO weight

25%, CRO

12.5%)

6,509

7,195

3,809

Return on Equity (CEO/CFO weight 25%, CRO

12.5%)

10%

4.8%

The performance assessment and outcome of the Executive Board members is summarised in the tables

below.

4 The collective salary increase based on the Collective Labour Agreement in the Netherlands (agreed for the period from 1 January 2019 –

31 December 2020), per 1 September 2019 was 3% for all employees in the Netherlands. In addition, per 1 September 2020 another

collective salary increase of 3% took place.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

105

Chief executive officer

Target

Performance

Customer

Increase number of

primary customers

In 2020 the number of primary customers increased by 578,000 to 13.9 million. The increase was lower

than projected at the beginning of 2020 and was impacted by the challenges related to Covid-19.

Sustainability

Cover nine sectors in Terra

In October 2020 the second progress report on Terra

was published. Five of the sectors (automotive,

power generation, residential real estate,

commercial real estate, and cement) are outlined in

comparison to 2019. An additional four sectors - fossil fuels, aviation, steel

and shipping - were added,

in line with the target to cover all nine sectors in scope in 2020, including quantitative

results and

targets. The report’s Climate Alignment

Dashboard shows most sectors are on track for climate

alignment, with progress still needed in some.

People

Improve organisational

health on three priorities

The Organisational Health Pulse survey for 2020 was focused on progress

against three priorities –

direction, leadership and innovation & learning. ING reached significant improvement

across all

business lines with all priorities in the top decile or top quartile.

Strategic priorities

Deliver on the regulatory

commitments

Delivered regulatory commitments related to implementation

of new regulations on time and at the

required levels.

Deliver on the strategic

priorities

Migrated all private individual customers

in Belgium to the OneApp/OneWeb services.

The Wholesale TOM programme achieved cost, risk and income benefits

and came to a natural close.

Stopped the Maggie transformation programme and refocused

our activities to ensure faster

customer delivery and a continuously improving end-to-end digital customer experience.

Extended the roll out of ING’s Touchpoint

platform, which gives new and existing business initiatives

access to 25.2 million ING customers (65% of customer base).

Introduced innovative services such as CoorpID and Blacksmith, which digitalise the know your

customer process for corporate clients.

Chief financial officer

Target

Performance

Customer

Increase number of

primary customers

In 2020 the number of primary customers increased with 578,000 to 13.9m. The increase was lower

than projected at the beginning of 2020 and was impacted by the challenges of Covid-19.

Sustainability

Green issuance

In 2Q a US$1 billion green bond was issued to fund loans for renewable energy and green buildings,

which was beyond the agreed target.

People

Improve organisational

health on three priorities

The Organisational Health Pulse survey for 2020 was focused on progress

against three priorities –

direction, leadership and innovation & learning. ING reached significant improvement

across all

business lines with all priorities in the top decile or top quartile.

Strategic priorities

Deliver on the regulatory

commitments

Delivered regulatory commitments related to implementation

of new regulations on time and at the

required levels.

Deliver on the strategic

priorities

Migrated all private individual customers

in Belgium to the OneApp/OneWeb services.

The Wholesale TOM programme achieved cost, risk and income benefits

and came to a natural close.

Stopped the Maggie transformation programme and refocused

our activities to ensure faster

customer delivery and a continuously improving end-to-end digital customer experience.

Extended the roll out of ING’s Touchpoint

platform, which gives new and existing business initiatives

access to 25.2 million ING customers (65% of customer base).

Introduced innovative services such as CoorpID and Blacksmith, which digitalise the know your

customer process for corporate clients.

Contents

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Additional

information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

106

Chief risk officer

Target

Performance

Regulatory

Deliver on regulatory

commitments

Delivered identified regulatory commitments related to

implementation of new regulations on time

and at the required levels.

Sustainability

Digitalisation of retail

credit risk

Standardisation and digitalisation of retail credit risk processes

in line with target.

Install compliance by

design

Elements of compliance and non-financial risk have been digitalised and robotised in line with target,

improving sustainable embedding of compliance and NFR processes.

Strategic priorities

Manage credit- market

and non-financial risk

within Board approved risk

appetite

Credit risk, market risk and non-financial risk effectively managed

within ING’s risk appetite profile.

People

Improve organisational

health on three priorities

The Organisational Health Pulse survey for 2020 was focused on progress

against three priorities –

direction, leadership and innovation & learning. ING reached significant improvement

across all

business lines with all priorities in the top decile or top quartile.

* Sustainability for the CRO has been focused on sustainable embedding of risk in the organisation.

The performance assessment and outcome of the Executive Board members is summarised in the tables below,

taking into account the pre-

and post award risk assessment.

Outcome performance assessment

CEO

CFO

CRO

Weighting

Assessment

Outcome

Weighting

Assessment

Outcome

Weighting

Assessment

Outcome

(%)

Profit before tax

25%

12.5%

Return on equity

25%

12.5%

Customer

12.5%

Regulatory

25%

100%

25%

Sustainability

12.5%

90%

11.3%

12.5%

90%

11.3%

10%

90%

People

12.5%

100%

12.5%

100%

12.5%

10%

100%

10%

Strategic priorities

12.5%

90%

11.3%

12.5%

90%

11.3%

30%

100%

30%

Total

100%

35%

100%

35%

100%

74%

* Due to rounding, percentages presented in the table may not add up precisely to the total percentages

provided.

2020 variable remuneration outcome

In light of the economic headwinds and the pressure Covid-19 placed on our business, our customers and on

society, the Supervisory Board and the Executive

Board jointly agreed for the Executive Board to

forgo their

variable remuneration related to the performance

year 2020. Although it was decided to forgo variable

remuneration, in the table on the left the individual performance of the members of the Executive

Board against

their set-targets is shown to illustrate

the performance to stakeholders.

As Steven van Rijswijk had a split year as CRO and then CEO, his award

was calculated against the CEO

performance results (50%) and the CRO performance results (50%).

In the second half of the year,

risk management reported into CFO Tanate

Phutrakul ad interim, in addition to his

role as CFO. As such, his variable remuneration award

was calculated against the CFO performance results

for the

full year,

also taking into consideration the CRO performance results for

the second half of the year.

Following the performance hurdles a thorough performance assessment has been completed

including ex-ante

risk tests. Based on this assessment and the overall achievements, the Supervisory Board has concluded that the

Executive Board members delivered relatively

strong results despite a challenging year due to Covid-19.

In addition, the Supervisory Board considered if any discretionary adjustment was required and they

determined

both the financial and non-financial results speak for themselves in the current environment. Furthermore the

Supervisory Board considers the behaviour of the Executive Board members and following their assessment

discretionary adjustments were applied.

In the final step, the Supervisory Board reviewed the CRO’s assessment

of ex-post risk adjustments. Whilst the

Global KYC program has made clear progress in 2020 and has delivered

on most milestones it was considered a

90% modifier (10% discount) to the CEO portion of his 2020 variable remuneration award

would be applied.

Following this performance assessment process the resulting variable remuneration

awards for Steven van

Rijswijk would have been €158,139 and for Tanate

Phutrakul €109,338.

Overall this would have equated to

variable remuneration for the CEO at 10.6% of his maximum 20% cap

and a

34.1% reduction against target. For the CFO it would

represent 9.0% of his maximum 20% cap and a 44.8%

reduction against target. The ratio

between base salary and total direct compensation is 100% (for 2020).

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information

Financial Statements

ING Group Annual Report 2020 on Form 20-F

107

Awards made to Executive Board members reflect

the Supervisory Board’s assessment of each of the Executive

Board members’ performance against the objectives in their scorecards,

as outlined in the previous section. The

Remuneration Committee also consulted the Risk Committee

and took into consideration its feedback on risk and

compliance matters. In addition to the modifier as stated

above, there was no reasoning to apply any individual

risk mitigating measures in accordance with ING’s

Remuneration Regulations Framework

(IRRF).

2020 Executive Board remuneration

Total remuneration

Amounts in euros (rounded

figures)

Base salary

Variable

remuneration

Total direct

compensation

Pension

Emoluments

Total

remuneration

Ralph Hamers

888,100

11,600

779,900

1,679,600

Steven van Rijswijk (CEO role)

888,100

11,600

242,000

1,141,700

Tanate Phutrakul

1,221,700

23,300

358,500

1,603,500

Steven van Rijswijk (CRO role)

610,800

11,600

169,000

791,400

As recognised in the profit or loss statement of 2020, the expenses for

each Executive Board member (active on

31 December 2020), relating to their role on the Executive Board, amount to

€2.0 million for the CEO and €1.6

million for the CFO. These amounts include deferred elements from

previous years, paid out in 2020.

The following tables (i.e. total direct compensation, pension costs and other emoluments) show the

remuneration awarded to individual Executive

Board members with respect to the performance years 2020, 2019

and 2018. The 2020 figures reflect a partial year as an Executive Board member for Ralph Hamers.

In addition,

the figures for Steven van Rijswijk are divided between his two

different roles on the Executive

Board. The 2019

figures reflect a partial year as an Executive Board member for Tanate

Phutrakul. The 2018 and 2019 figures

reflect a full year as Executive Board members for

Ralph Hamers and Steven van Rijswijk.

All Executive Board remuneration is paid directly

by ING with the exception of director’s fees for

Tanate

Phutrakul as non-executive director

at ING Belgium.

Total direct compensation

for (active) individual Executive Board members

2020

2019

2018

Amounts in euros (rounded figures)

Amount

Number of

Amount

Number of

Amount

Number of

Ralph Hamers (CEO)

Base salary

888,100

1,750,000

Variable remuneration (fully in shares)

266,000

25,726

Steven van Rijswijk (CEO role)

Base salary

888,100

Variable remuneration (fully in shares)

Tanate Phutrakul

(CFO)

Base salary

1,221,700

831,100

Variable remuneration (fully in shares)

141,400

13,675

Steven van Rijswijk (CRO role)

Base salary

610,800

1,203,600

Variable remuneration (fully in shares)

195,000

18,858

Total aggregated

base salary

3,608,700

3,784,700

2,953,600

Total aggregated

variable remuneration

602,400

Total aggregated

number of shares

58,259

1 Ralph Hamers stepped down as an Executive Board member on 30 June 2020. His base salary reflects the payments from 1 January 2020 –

30 June 2020.

2 The number of shares is based on the average ING share price on the day the year-end results were published.

3 Steven van Rijswijk was appointed CEO as of 1 July 2020. His total direct compensation is divided between his role as CRO and then as

CEO. The annualised base salary for Steven van Rijswijk as of 1 July 2020 is EUR 1,776,250 (this includes the 1.5% salary increase as per 1

January 2020).

4 The variable remuneration percentage for the Executive Board

members are as follows: CEO 15%, CFO 15% and CRO 16%. The applicable

percentage for the CFO is the full percentage for 2019, partially in his capacity as a Management Board Banking member and since 23 April

2019 in his capacity as an Executive Board member.

5 The 2019 details for Tanate Phutrakul

reflect a partial year as an Executive Board member.

5 The IRRF consists of the most important regulatory requirements with respect to remuneration to which all remuneration

policies of

majority owned entities have to adhere to. Furthermore, it consists of our general remuneration principles that apply to all staff

globally

working under the responsibility of ING.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

108

Pension costs

Members of the Executive Board participate in the Collective Defined Contribution

(CDC) pension plan. In 2020,

pension accrual applied to salary up to an amount of € 110,111. The table below shows the pension costs of the

individual members of the Executive Board in 2020, 2019 and 2018.

Pension costs for individual Executive Board members

Amounts in euros (rounded figures)

2020

2019

2018

Ralph Hamers

11,600

23,000

26,000

Steven van Rijswijk (CEO role)

11,600

Tanate Phutrakul

23,300

16,000

Steven van Rijswijk (CRO role)

11,600

23,000

26,000

1 Pension accrual only applies to salary up to an annually set amount (i.e. EUR 105,075 for 2018, EUR 107,593 for 2019 and EUR 110,111 for

2020).

2 Ralph Hamers stepped down as an Executive Board member on 30 June 2020. His pension costs reflect the period from 1 January 2020 –

30 June 2020.

3 Steven van Rijswijk was appointed as CEO from 1 July 2020. Therefore his pension costs for

2020 are divided between his role of CRO and

then as CEO.

4 The 2019 emoluments for Tanate Phutrakul

reflect a partial year as an Executive Board member.

Benefits

The individual members of the Executive Board receive other emoluments, including savings allowances

compensate for the loss of pension benefits on salary above € 110,111 in 2020, employer contributions to savings

schemes, reimbursement of costs related to home/work

commute, costs relating to tax and financial planning

services, costs related to reimbursement of the Directors

& Officers indemnity,

costs associated with a company

car and for expats, the costs associated with housing and schooling.

The other emoluments in 2020, 2019 and 2018 amounted to the following costs.

Other emoluments

Amounts in euros (rounded figures)

2020

2019

2018

Ralph Hamers

779,900

613,000

561,000

Steven van Rijswijk (CEO role)

242,000

–

Tanate Phutrakul

358,500

235,000

Steven van Rijswijk (CRO role)

169,000

367,000

369,000

1 The 2020 emoluments reflect the partial year as an Executive Board member for Ralph Hamers.

2 The 2019 emoluments for Tanate Phutrakul

reflect a partial year as an Executive Board member.

3 Steven van Rijswijk was appointed as CEO from 1 July 2020. His emoluments are divided between his role as CRO and then as CEO.

4 This amount does not consist of any exit arrangements due to the fact his departure was voluntary and therefore

nothing has been agreed

or paid, which is fully in line with the 2020 EB remuneration policy.

5 The prior period has been updated to improve consistency and comparability.

Breakdown of other emoluments paid in 2020

Amounts in euros (rounded figures)

Ralph

Hamers

Steven van Rijswijk

(CEO role)

Tanate Phutrakul

Steven van Rijswijk

(CRO role)

Contribution individual savings

31,100

42,800

21,400

Individual savings allowance

193,100

192,400

257,200

128,800

Travel and

accident insurance

8,200

8,300

16,500

8,200

Other amounts

547,500

10,200

42,000

10,600

1 The 2020 emoluments reflect the partial year as an Executive Board member for Ralph Hamers.

2 Steven van Rijswijk was appointed as the new CEO as of 1 July 2020. The emoluments are divided between his role as CRO and then as

CEO.

3 Other amounts includes the following elements: personnel facility (mortgage), tax and financial planning, reimbursement of costs under

the Directors & Officers indemnity provided by ING, redemption of the holiday allowance for Ralph Hamers and payment of director’s

fees

for Tanate Phutrakul

as non-executive director at ING Belgium.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

109

Long-term incentives awarded in previous years

Long-term incentives to the Executive Board members

in previous years are disclosed in the table ‘ING shares

held by Executive Board members’.

In line with the 2020 EB remuneration policy we do not operate (active) long-

term incentive plans anymore.

Employee stock options

The table below contains information on outstanding employee

stock options and movements during the

financial year of employee stock options held by the members of the Executive Board

on 31 December 2020. This

includes employee stock options awarded prior to their appointment to

the Executive Board. Please note that all

unexercised options lapsed in 2020 when the applicable stock option plans reached

the end of their 10-year

lifespan.

Options held by Executive Board members

Number of options

Outstanding on

31 December

2019

Exercised

in 2020

Waived or

expired in

2020

Outstanding on

31 December

2020

Grant

price in

euros

Grant

date

Vesting

date

Expiry

date

Ralph Hamers

22,124

7.35

17 March

2010

17 March

2013

17 March

2020

Tanate Phutrakul

11,062

7.35

17 March

2010

17 March

2013

17 March

2020

Steven van Rijswijk

2,318

7.35

17 March

2010

17 March

2013

16 March

2020

Steven van Rijswijk

10,694

7.35

17 March

2010

17 March

2013

17 March

2020

Deferred shares are shares conditionally granted

subject to a tiered vesting over a period of five years (for

awards in 2020 and before), with the

ultimate value of each deferred

based on ING

’s

price on the

vesting date. This is conditional on there being no holdback.

The main condition for exercise is that these require

continued employment through vesting date.

Shares vested for Executive Board members

during 2020

Number of shares

Grant date

Vesting date

End date of

retention

period

No. of

granted

No. of

vested

Vesting

price in

euros

No. of

unvested

remaining

Ralph Hamers

LSPP

11 May

2017

11 May

2020

11 May 2022

23,092

4,619

5.15

LSPP

10 May

2018

11 May

2020

10 May 2023

18,547

2,225

5.15

LSPP

11 May 2020

11 May

2020

11 May 2025

25,726

10,290

5.15

Tanate Phutrakul

LSPP Units

25 March

2016

27 March

2020

N/A

7,987

1,065

5.73

LSPP Units

27 March

2017

27 March

2020

N/A

6,032

482

5.73

1,449

LSPP Units

27 March

2018

27 March

2020

N/A

4,972

397

5.73

1,592

LSPP

27 March

2019

27 March

2020

27 March

2021

2,837

227

5.73

908

LSPP

11 May 2020

11 May

2020

11 May 2025

17,694

7,078

5.15

10,616

Steven van Rijswijk

LSPP

27 March

2017

27 March

2020

27 March

2021

13,890

2,315

5.73

LSPP

27 March

2018

27 March

2020

27 March

2021

3,460

346

5.73

1,038

LSPP

10 May

2018

11 May

2020

10 May 2023

6,584

790

5.15

2,370

LSPP

11 May

2020

11 May

2020

11 May 2025

18,858

7,543

5.15

11,315

1 All the outstanding deferrals of Ralph Hamers lapsed when he voluntarily stepped down as an Executive Board member.

2 Shares granted to Tanate

Phutrakul (March 2016 to March 2019) and Steven van Rijswijk (March 2017 to March 2018) were awarded for

their performance in positions prior to their Executive Board appointment.

3 All current Executive Board members participate in the ING Group Long-term Sustainable Performance

Plan (LSPP) and receive their

shares under its plan rules.

4 Deferred share units of Tanate

Phutrakul are cash settled instruments. The value of these are based on ING Group’s

share price at the

vesting date. No retention period applies.

5 Number of shares granted includes both the deferred and upfront part awarded at the granting

date.

6 The balance of unvested shares post holdback, where applicable.

7 The number of shares granted is split between the service period Tanate Phutrakul

was a Management Board member and Executive

Board member.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

110

Total value

of vested and unvested shares of Executive Board

members - 2020

Amounts in euros (rounded figures)

Vested shares

Unvested shares

Share price in euros

Total value

euros

Ralph Hamers

17,134

–

7.61

130,390

Tanate Phutrakul

9,249

14,565

7.61

181,225

Steven van Rijswijk

10,994

14,723

7.61

195,706

1 The opening share price on 31 December 2020.

Loans and advances to Executive Board members

The table below presents the loans and advances provided to Executive Board

members that were outstanding

on 31 December 2020, 2019 and 2018. Since Ralph Hamers was no longer an Executive Board member on 31

December 2020, there is no information included for 2020. These loans were provided on market

conditions with

due observance of the applicable policies within ING.

Loans and advances to individual Executive Board members – 2020

Amount in thousands of euros

Amount

outstanding 31

December

Average interest

rate

Repayments

Steven van Rijswijk

–

Tanate Phutrakul

–

Loans and advances to individual Executive Board members – 2019

Amount in thousands of euros

Amount

outstanding 31

December

Average interest

rate

Repayments

Ralph Hamers

2,402

1.4%

Tanate Phutrakul

Steven van Rijswijk

Loans and advances to individual Executive Board members – 2018

Amount in thousands of euros

Amount

outstanding 31

December

Average interest

rate

Repayments

Ralph Hamers

2,499

1.4%

Steven van Rijswijk

ING shares held by Executive Board members

Executive Board members are encouraged

to hold ING shares as a long-term investment to maintain

alignment

with ING. The table below shows an overview of the shares held by members of the Executive Board

on 31

December 2020, 2019 and 2018.

ING shares held by Executive Board members

Numbers of shares

2020

2019

2018

Ralph Hamers

–

93,833

67,392

Steven van Rijswijk

75,490

69,490

66,153

Tanate Phutrakul

13,251

9,200

1 Since Ralph Hamers was no longer an Executive Board member on 31 December 2020, there is no information included for 2020.

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

111

2021 Executive Board remuneration

The Supervisory Board decided not to increase the base salary of the Executive Board members from 1 January

2021.

The pandemic did not result in any adjustment of the target areas compared

to 2020. Therefore, for 2021 the

following target areas will be taken

into account:

Financial

◾

Profit before tax

◾

Return on equity

Non-financial

◾

Customer (except for CRO)

Increase number of primary customers as it leads to deeper relationships, greater

customer

satisfaction and, ultimately,

customers choosing ING for more of their financial needs

Increase mobile sales per 1,000 active customers

Increase percentage of personal interaction

with customers

◾

People

Strengthen organisational health with a focus on four priority areas:

direction, leadership,

innovation & learning and role clarity

Strengthen ING’s leadership

cadre

Increase gender balance in ING’s leadership cadre

◾

Strategy

Deliver on digitalisation initiatives

Deliver on innovation initiatives

◾

Sustainability

Development of integrated climate

risk strategy

◾

Regulatory

Deliver commitments to regulators

Contents

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Financial Statements

ING Group Annual Report 2020 on Form 20-F

112

Remuneration Supervisory Board

Supervisory Board remuneration policy

In line with the Dutch act implementing SRD II, the 2020 SB remuneration policy was presented to shareholders

at the 2020 AGM. Based on the result of the binding vote (98.6% in favour), the 2020 AGM adopted the SB

remuneration policy with retroactive effect

from 1 January 2020 until the 2024 AGM at the latest. The 2020 SB

remuneration policy is disclosed in full on ing.com in the section ‘Remuneration’.

The Supervisory Board remuneration levels for 2020, similar to 2019, are shown below:

Supervisory Board remuneration structure

Annual fees in euros

2020

Chairman Supervisory Board

125,000

Vice chairman Supervisory Board

95,000

Supervisory Board member

70,000

Committee fees (annual amounts)

Chairman committee

20,000

Member committee

10,000

Attendance fees (per event)

Attendance fee outside country of residence

2,000

Attendance fee outside continent of residence

7,500

All fees are paid out fully in cash. No variable remuneration is provided

to ensure that the Supervisory Board

members can maintain independence. The Supervisory Board members are not eligible for retirement

benefits

nor any other benefits in relation to their position on the Supervisory Board. Members of the Supervisory Board

are reimbursed for their travel

and ING-related business expenses.

2020 Remuneration Supervisory Board

The table below shows the remuneration, including attendance fees

for each Supervisory Board member.

All fees

for the Supervisory Board are paid directly by ING. The only exception to this is for Eric Boyer

de la Giroday who

received payments from ING Belgium for his role in the Supervisory Board of ING Belgium.

2020 Remuneration Supervisory Board

2020

2019

2018

Amount in euros (rounded figures)

Remuneration

VAT

Remuneration

VAT

Remuneration

VAT

Hans Wijers (chairman)

173,000

36,000

167,000

35,000

153,000

32,000

Hermann-Josef Lamberti (vice-chairman)

48,000

141,000

139,000

Mike Rees (vice-chairman)

129,000

73,000

Jan Peter Balkenende

80,000

17,000

82,000

17,000

82,000

17,000

Juan Colombás

23,000

Mariana Gheorghe

108,000

119,000

105,000

Eric Boyer de la Giroday

38,000

108,000

Margarete Haase

105,000

98,000

63,000

Herman Hulst

68,000

14,000

Harold Naus

68,000

14,000

Herna Verhagen

100,000

21,000

25,000

5,000

1 Hermann-Josef Lamberti and Eric Boyer de la Giroday retired after the AGM on 28 April 2020. The remuneration figures for 2020 reflect a

partial year as a member of the Supervisory Board.

2 Mike Rees became vice-chairman after the AGM on 28 April 2020.

3 Juan Colombás was appointed to the Supervisory Board by the AGM on 28 April 2020 and became effective on 1 October 2020. The

remuneration figures for 2020 reflect a partial year as a member of the Supervisory Board.

4 Herman Hulst and Harold Naus were appointed to the Supervisory Board by the AGM on 28 April 2020 with effect from that date. The

remuneration figures for 2020 reflect a partial year as a member of the Supervisory Board.

Compensation of former members of

the Supervisory Board not

included in the table above amounted

to nil in

2020, €176,000 in 2019 and

€333,000 in 2018.

Loans and advances to Supervisory Board members

Supervisory Board members may obtain banking and insurance services from ING Group and its subsidiaries in

the ordinary course of their business and on terms that are customary in the sector.

The Supervisory Board

members do not receive privileged financial services. On 31 December 2020, there were no loans and advances

outstanding to Supervisory Board members.

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ING shares and employee stock options held by Supervisory Board members

Supervisory Board members are permitted to hold ING shares as a long-term investment.

The table below shows

the holdings by members of the Supervisory Board on 31 December 2020, 2019 and 2018.

ING shares held by Supervisory Board members

Numbers of shares

2020

2019

2018

Hermann-Josef Lamberti

5,700

Eric Boyer de la Giroday

47,565

Margarete Haase

800

Herman Hulst

3,650

Harold Naus

1,645

1 Since both Hermann-Josef Lamberti and Eric Boyer de la Giroday retired after the 2020 AGM on 28 April 2020, there is no information

included for 2020.

The following table contains information on employee

stock options outstanding and awards vested

for

Supervisory Board members.

Employee stock options on ING Groep N.V.

shares held by members of the Supervisory Board on 31 December 2020

Number of stock options

Outstanding on

31 December

2020

Expired in

2020

Outstanding on

31 December

2019

Expired in

2019

Outstanding on

31 December

2018

Expired in

2018

Eric Boyer de la Giroday

–

113,479

2021 Remuneration Supervisory Board

The Supervisory Board decided not to change the fees for 2021.

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General information for all staff

FOR INFORMATION ONLY

AT 2021 ING GROEP N.V.

ANNUAL GENERAL MEETING (AGM)

The primary objective of ING’s remuneration

principles is to attract, motivate and retain

qualified and expert

leaders as well as senior staff (including Executive Board members)

and other highly qualified staff who have the

desired Orange Code values and behaviours, skills and knowledge to deliver on ING’s

purpose and Think Forward

strategy in a sustainable way.

The remuneration principles are an integral part of ING’s

strategy and risk profile. They maintain a sustainable

balance between short and long-term value creation and build on ING’s

long-term responsibility towards its

employees, customers, shareholders and other stakeholders.

Our approach to the remuneration principles did

not change in 2020.

Our remuneration principles apply to all staff and are embedded in ING’s

Remuneration Regulations Framework

(IRRF) and our people offer (OPO). Introduced in 2020, OPO sets out ING’s differentiating

offer as an employer in

the marketplace and states what we

ask of our people in return. It gives guidance to our global people practices,

while supporting our Think Forward Strategy.

The IRRF and OPO comply with relevant international and local

legislation and regulations.

Our remuneration principles

Our remuneration principles apply to all employees and comprise the following:

Aligned with business strategy

ING’s remuneration principles are

aligned with the business strategy and company goals.

Creates long-term value

ING’s remuneration principles contribute

to long-term value creation and support a focus on the long-term interests

of its

stakeholders, including employees, customers

and shareholders.

Responsible and fair

In line with our Orange Code values and behaviours, ING acts responsibly and treats staff

fairly across the globe.

Mitigates risk and optimises controls

Risk management is an enabler of long-term value creation. ING ensures its remuneration

principles are properly correlated with its

risk profile and stakeholder interests.

Performance driven

ING operates a fair,

objective and transparent performance management process linked

to remuneration to steer and motivate

all

employees to deliver on its strategic goals, aiming to reward

success and prevent rewarding for failure.

Sustainable

ING supports the sustainable recruitment, engagement and retention

of all employees.

Performance management

We aim to reward for

success and avoid rewarding for failure.

That is why ING’s remuneration

approach is

strongly linked to a robust and transparent

performance management process. Outcomes of performance

evaluations (including collective and individual risk assessments) provide input for remuneration.

As not all

employees are eligible for variable remuneration there

is not necessarily a link to financial performance. In the

Netherlands, for example the vast majority of the employees do not receive

any variable remuneration.

Step Up Performance Management is our global performance management approach

applicable to the majority

of employees. It aims to improve people’s

individual performance and thereby team performance and ultimately

ING's performance. Step Up Performance Management is one of our people practices

that help to increase focus,

alignment and transparency.

We do this through continuous conversations

between managers, employees and

teams. To

support these conversations, there are three formal

moments to discuss performance during the year:

target setting, mid-year review and year

-end evaluation.

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The Step Up Performance Management approach consists

of three dimensions:

Job:

the impact employees have in their daily work on an individual and team level, based on factors

such as qualitative job description, dynamic planning and specific selected quantitative priorities.

Orange Code behaviours:

how employees do their work and how effective their behaviour is as a

professional and colleague. We expect all employees

to act in line with ING’s Orange Code.

Stretch ambitions:

at ING, we believe high performance requires stretch

and investment (to achieve the

stretch). Therefore we

ask people to set ambitions beyond their day-to-day role and connect

their

personal passion, expertise or interest with the long-term success of ING.

All targets are agreed between the employee and their manager,

as well as within management teams, to ensure

consistency across the bank. ING uses three labels to evaluate performance:

excellent, well done and

improvement required.

Step Up Performance

Management does

not prescribe

the targets employees

should set.

However, the following

regulatory requirements

apply to specific

groups:

For employees eligible for variable remuneration,

a minimum of 50% non-financial priorities.

For all employees in control functions (Legal, Risk, Finance, Compliance, Audit and Human Resources), no

individual financial KPIs are allowed, unless required by local law.

For identified risk takers, risk mitigation

measures may lead to a downwards adjustment of the

performance outcome and negatively affect

variable remuneration (a risk modifier can be applied).

Total direct compensation

ING aims to provide total direct compensation or expected business and individual performance

at levels which,

on average, are at the median of the markets

in which we operate, benchmarked against

relevant peer groups. In

line with the Dutch Banking Code, the current remuneration levels of the Executive

Board are below the median

of the peer group introduced with the 2020 EB remuneration policy.

This year, remuneration

levels for members

of the Management Board Banking were also benchmarked against

the same peer group as the Executive Board.

The Executive Board and the other members of the Management Board Banking are on average

below the

median. Three members of the Management Board Banking are on or slightly above the median. Due to their

ING-specific roles it is difficult to have a good comparison inside and outside of the financial industry in the

Netherlands as well as abroad. There are limited comparable positions for these roles. To

ensure we adhere to

our 2020 EB remuneration policy,

we regularly monitor and benchmark salary levels across ING.

Fixed remuneration represents

a sufficiently high proportion, in line with the level of expertise and skills, and

allows a fully flexible variable remuneration award.

When no variable remuneration is awarded, the

compensation level is still enough for a decent standard of living. Variable

remuneration is performance driven,

subject to regulatory caps and prevents excessive

risk taking, where applicable.

The comprehensive process around variable remuneration

The awarding of variable remuneration, where

applicable, is based on group, business line and individual

performance criteria unless local legislation prescribes otherwise. In all ING countries, we adhere to the

applicable variable remuneration caps.

For Identified Staff (i.e. staff considered to

have a material impact on ING’s risk profile),

at least 40% of variable

remuneration is deferred over

a period of three to five years with a tiered vesting schedule. Furthermore, at

least

50% of variable remuneration is awarded in equity (or equity-linked

instruments unless local legislation

prescribes otherwise).

Performance and risk assessment

ING applies measures to mitigate risk relating to variable remuneration.

Our global remuneration policy takes

into consideration risk, capital, liquidity and the likelihood and timing of earnings. Measures

include pre-award

and post-award risk assessments of variable remuneration.

In 2020, the Management Board Banking and the Supervisory Board approved the Variable

Remuneration

Accrual Model (VRAM) set-up and approach to determine the 2020 discretionary risk-adjusted

variable

remuneration pools.

The VRAM takes a holistic view of the overall performance

of ING across three key dimensions:

(i)

financial,

(ii)

non-financial, and

(iii)

risk.

Within each of these three elements specific criteria are used to measure performance (e.g. profit, return on

equity, customer,

people, strategy,

sustainability as well as financial and non-financial risk).

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The proposal for the variable remuneration pool is prepared

by Human Resources, Risk and Finance, and follows

the VRAM’s step-by-step

process and construct including CEO discretion to adjust the proposed variable

remuneration pool. The CEO considers several

factors when making this decision. This discretion is checked by

the Supervisory Board and requires their approval.

The Management Board Banking reviews the variable remuneration

pool on behalf of the Supervisory Board,

taking into account the advice of the Risk Committee and the Remuneration

Committee.

The total variable remuneration pool (for individual and collective variable

remuneration), encompasses all

employees eligible for variable remuneration globally,

including Identified Staff.

ING takes a multi-step approach to determine whether to

award variable remuneration in a given performance

year and the maximum amount of the pool. Within this process, a range of risk elements is assessed at various

levels and, where appropriate, risk adjustments are made to the variable

remuneration pools.

Performance hurdles

To unlock the discretionary

variable remuneration pools, both of the following performance hurdles must

met. These are:

The Common Equity Tier 1 (CET1) ratio must be at or above the threshold established by applicable

regulations;

The return on equity (underlying RoE) is equal to or higher than the percentage determined at

the

beginning of each performance year by the Management Board Banking and the Supervisory Board.

Underlying RoE, in line with the VRAM Policy (as established in PY 2019) and approved by governing

bodies, can be adjusted due to one-time charges or infrequent occurrences, such as but not limited to

macro-economic events and pandemic events, during a given performance year.

A variable remuneration pool is also separately accrued for staff

in control functions and support functions and

for those employees subject to a collective variable remuneration

plan. The amount is defined by the

Management Board Banking and approved by the Supervisory Board.

Risk adjustments

In determining the overall size of the variable remuneration

pool, a multi-layered, consistent and bank-wide

approach for risk tests and adjustments is applied to the process, based on an assessment by

the CRO.

To establish

appropriate risk-adjusted

variable remuneration pools, ex ante risk adjustments

are made based on

measures used to assess the bank’s current

and future risks and whether performance sufficiently aligns with risk

appetite levels. The risk adjustment assessment includes measurements on ‘forward

looking’ capital, liquidity and

non-financial risk, where adjustments are made on deviation from risk appetite.

In addition, ex post risk adjustments are a key element

in the process of determining both final variable

remuneration pools and individual awards. Here, the CRO may

provide additional input at a more granular level

to adjust ING’s overall,

business line and/or country variable remuneration pools based on their risk management

performance.

The ex-ante and/or ex-post risk adjustments require

Supervisory Board approval, taking into account the input of

the Risk and Finance functions and the advice of the Risk Committee and Remuneration Committee.

The final risk adjustment measure lies in the individual performance assessment itself.

An employee’s

performance is extensively assessed before variable

remuneration is proposed and awarded. Every

manager

carefully assesses the performance delivered by their individual team members on the basis of pre

-agreed

performance priorities and in line with the Step Up Performance Management framework. In addition, managers

have the discretionary power to lower the proposed variable remuneration

if risk taking is perceived as

inappropriate. In this way,

variable remuneration is aligned with any additional risks identified on an individual

basis during the performance year.

Additional risk requirements apply to Identified Staff who are considered

risk takers in accordance with CRD IV.

These risk requirements set the minimum standards to be met during the performance

year.

Deviation from

these standards may lead to downward adjustment

of the variable remuneration, a so-called risk modifier.

This

process is run independently by the Risk function for which the CRO is ultimately responsible. Within the

Executive Board, risk modifiers were applied to the CEO

for the performance year 2020. The Supervisory Board,

advised by its Risk Committee, is responsible for risk modifiers within the Management Board Banking.

Finally, a post-award

risk assessment can be applied. This assessment analyses whether any events or findings

occurred that should lead to a downward adjustment of variable remuneration

of previous years by applying a

holdback (i.e., forfeiture of up to 100% of the awarded, but unvested,

variable remuneration) or clawback

(surrender of up to 100% of the paid or vested variable remuneration).

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Shareholders’ mandate to exceed 100% variable remuneration cap

ING’s remuneration

policies comply with international and local legislation and regulations. Under the Dutch

WBFO (which sets various requirements on remuneration), financial institutions

are permitted to set a variable

remuneration cap higher than 100% (but not higher than 200%) of fixed remuneration for

employees outside of

the European Economic Area (EEA), provided that the higher cap is approved

by shareholders and does not

conflict with ING’s capital adequacy requirements.

At the 2017 AGM, shareholders approved to apply an

increased maximum percentage of up to 200% for

employees outside the EEA for a period of five performance years until end-2021. For

2020, it was applied to zero

employees worldwide. At the 2021 AGM, we will ask for a new mandate to

apply an increased maximum

percentage of up to 200% for employees outside the EEA for a further period of five performance

years, from

2022 until 2026. This mandate is rarely used by ING and was applied to zero

employees worldwide in 2018 and

2019.

2020 specifics

ING awards variable remuneration across the global organisation

in line with our remuneration principles, global

and local legislation and market practices. The awarding of variable

remuneration, where applicable, is based on

group, business line and individual performance criteria, both financial and non-financial, and comes in the form

of discretionary and collective variable remuneration.

Collective variable remuneration is based on collective labour agreements and/or

profit sharing schemes that are

driven by regulation, law and/or workers

council agreements in various countries. Over the past years the total

amount of collective variable remuneration has been relatively

stable and typically accounted for around 25% of

the total amount of variable remuneration.

The award of discretionary variable remuneration is based on a clear,

transparent and verifiable mechanism for

measuring performance and applying adjustments for risks (the Variable

Remuneration Accrual Model or VRAM).

The starting point is an aggregate of the individual target incentive

amounts from all eligible employees across

the group. The next step is to unlock the discretionary pool based on the results of the performance hurdles.

First, the underlying RoE was calculated and this performance

hurdle passed. The underlying RoE, in line with the

VRAM Policy and approved by governing bodies, has been adjusted for

macro-economic and pandemic events

during performance year 2020. The CET1 performance hurdle was also calculated and passed. Subsequent

to the

results of these performance hurdles the discretionary pool was unlocked. This ‘discretionary

pool’ is then

subject to a number of adjustments including for

financial and non-financial performance and for risk.

In 2020 the impact of COVID-19 presented unprecedented challenges for ING. While considerations

around staff

well-being and the wider societal impact of the pandemic are paramount, these circumstances have

led to

weaker performance results and this led to a negative

adjustment to the discretionary pool. Furthermore, in line

with our policy, executive

discretion was applied to further adjust the pool amount downwards in light of

declining financial performance and recognising broader stakeholder

interests. Overall, these adjustments

accounted for a downward adjustment

of the discretionary pool amount by approximately 26% from target

discretionary pool and resulting in approximately 20% decline versus the previous

performance year.

differentiated approach was

taken in the allocation of the discretionary variable remuneration,

with a

significantly larger reduction for senior leaders than for junior employees

(on average 30% reduction for senior

leaders).

The total actual amount of both discretionary and collective variable remuneration

awarded to all eligible

employees globally for 2020 was €314.2 million (€93.6 million in collective variable remuneration),

compared to

total staff expenses of €5,812 million. For 2019, the total

amount was €378.0 million (€98.0 million in collective

variable remuneration) on €5,755 million staff expenses

and €303.1 million (€93.9 million in collective variable

remuneration) out of €5,420 million in 2018.

In 2020, two employees – excluding members of the Management Board

Banking – were awarded total annual

remuneration (including employer pension contributions and excluding

severance payments made) of €1 million

or more.

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Board practices

For information regarding

board practices, see Item 6.A

Severance payments to members of the Executive Board

The contracts entered into with the members

of the Executive Board provide for severance

payments that

become due upon termination of the applicable Executive Board member’s contract,

including if termination

occurs in connection with a public bid as defined in section 5:70 of the Dutch Financial Supervision Act. For

purposes of calculating the amounts due, it is not relevant whether or not termination of the employment or

commission contract is related to a public bid. Severance

payments to the members of the Executive Board are

limited to a maximum of one year’s fixed salary,

in line with the Dutch Financial Supervision Act and the

Corporate Governance Code

Employees

The average number of employees at a full time equivalent basis was 55,901

at the end of 2020, of which 15,201

or 27%, were employed in the Netherlands. Substantially all of the Group’s

Dutch employees are subject to a

collective labor agreement covering ING in the Netherlands.

The distribution of employees with respect to the Group’s

continuing operations for the years 2020, 2019 and

2018 were as follows:

Number of employees

Netherlands

Rest of the world

Total

2020

2019

2018

2020

2019

2018

2020

2019

2018

Total average

number

of internal employees at full time

equivalent basis

15,201

14,415

13,600

40,701

39,016

38,633

55,901

53,431

52,233

The Group employs a significant numbers of temporary employees. The

average number of temporary

employees, not included in the table above, at a full time equivalent basis was 7,886 at the end of 2020.

Share ownership

For information regarding share

ownership, see Item 6.B of this Form 20-F and Note 27 ‘Staff expenses’ to the

consolidated financial statements.

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Item 7.

Major shareholders and related

party transactions

A. Major shareholders

ING Group ordinary shares are listed on the stock exchanges

of Amsterdam (Euronext Amsterdam)

and

Brussels (Euronext Brussels). ING Group American Depositary Shares (“ADSs”)

are listed on the New York

Stock

Exchange (NYSE). Options on ING Group ordinary shares or in the form of American depository receipts (ADRs)

are traded on the Euronext Amsterdam

Derivative Markets and the Chicago Board Options Exchange.

Holders of ordinary shares or American Depositary Shares with a stake

of 3% or more

To the best

of our knowledge, as of 31 December 2020, no holder of ordinary shares or ADSs, other than

BlackRock Inc. held 3% or more of ING Group’s issued share

capital.

On 4 February 2019, BlackRock, Inc. disclosed by way of a Schedule 13G filed with the SEC, beneficial

ownership of 233,492,874 ordinary shares of ING Group as of 31 December 2018, representing 6.0% of ING

Group’s issued share capital.

On 5 February 2020, BlackRock, Inc. disclosed by way of a Schedule 13G filed with

the SEC, beneficial ownership of 259,231,767 ordinary shares of ING Group as of 31 December 2019,

representing 6.7% of ING Group’s

issued share capital. On 29 January 2021, BlackRock, Inc. disclosed by way of

a Schedule 13G filed with the SEC, beneficial ownership of 289,185,500 ordinary shares of ING Group as of 31

December 2020, representing 7.4% of ING Group’s issued share

capital.

On 31 December 2020, ING Groep N.V.

and its subsidiaries held 571,671 ordinary shares or ADSs, ,representing

0.01% of ING Group’s issued share capital.

ING Groep N.V.

does not have voting rights in respect of shares and

ADSs it holds or which are held by its subsidiaries. Pursuant to section 5.3 of the Dutch Financial Supervision

Act (“Major Holdings Rules”), any person who, directly or indirectly,

acquires or disposes of an interest in the

voting rights and/or the capital of (in short) a public limited company incorporated

under the laws of the

Netherlands with an official listing on a stock exchange within the European Economic

Area, as a result of

which acquisition or disposal the percentage of his voting rights or capital interest

whether through

ownership of shares, American depositary receipts (ADRs) or any other financial instrument, whether stock-

settled or cash-settled, such as call or put options, warrants, swaps

or any other similar contract - reaches,

exceeds or falls below the threshold levels of 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%

is required to provide updated information

on its holdings. As a result, other than based on information

available from public filings available under the applicable laws of any other jurisdiction, ING Groep

N.V.

is not

aware of any changes in the ownership of ordinary shares or ADSs between the thresholds levels

mentioned in

the previous sentence.

On 31 December 2020, no person is known to ING Groep N.V.

to be the owner of more than 10% of the

ordinary shares or ADSs. As of 31 December 2020, members of the Supervisory Board and their related third

parties held 5,295 Ordinary Shares. Members of the Supervisory Board do not hold ING options.

As at 31 December 2020, members of the Executive Board and their related third

parties held 88,741

ordinary

shares.

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As at 31 December 2020 ING Groep N.V.

was not a party to any material agreement that becomes effective,

is required to be amended or terminated in case of a change of control

of ING Groep N.V.

following a public bid

as defined in the Dutch Financial Supervision Act. ING Groep N.V.’s

subsidiaries may have customary change of

control arrangements included in agreements related

to various business activities, such as joint venture

agreements, letters of credit and other credit facilities,

ISDA-agreements, hybrid capital and debt instruments,

reinsurance contracts and futures and option trading

agreements. Following a change of control of ING Groep

N.V.

(as the result of a public bid or otherwise), such agreements may be amended or terminated, leading, for

example, to an obligatory transfer

of the interest in the joint venture, early repayment

of amounts due, loss of

credit facilities or reinsurance cover and liquidation of outstanding

futures and option trading positions.

As of 31 December 2020 ING Groep N.V.

was not aware of any arrangements the operation

of which may result

in a change of control of ING Groep N.V.

B. Related Party Transactions

In the normal course of business, ING Group enters into various transactions

with related parties. Parties are

considered to be related if one party has the ability to control or exercise

significant influence over the other

party in making financial or operating decisions. Related parties of ING Group include, among others, its

subsidiaries, associates, joint ventures, key

management personnel, and various defined benefit and

contribution plans. Transactions between

related parties include rendering or receiving of services, leases,

transfers under finance arrangements

and provisions of guarantees or collateral. There

are no significant

provisions for doubtful debts or individually significant bad debt expenses recognised on outstanding

balances

with related

parties.

ING Group has entered into various transactions with related

parties. For more information, reference

is made

to Note 49 “Related parties”

in the consolidated financial statements.

As described under “Item 6. Directors, Senior Management and Employees”,

some members of the Supervisory

Board are current or former senior executives

of leading multi-national corporations based primarily in the

Netherlands. ING Group may at any time have lending, investment

banking or other financial relationships with

one or more of these corporations in the ordinary course of business on terms which we believe are no less

favorable to ING than those reached with unaffiliated

parties of comparable creditworthiness.

C. Interests of experts and counsel

This item does not apply to annual reports on Form 20-F.

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Item 8.

Financial information

Consolidated statements and other financial information

Consolidated statements

For information regarding consolidated

statements and other financial information, see Item 18 of this Form

20-F.

Legal Proceedings

For a description of ING’s legal proceedings,

see Note 45 ‘Legal proceedings’ in the consolidated financial

statements.

Policy on dividend distribution

In the third quarter of 2020, ING announced a change in its distribution policy from a progressive dividend to a

pay-out ratio of 50% of resilient net profit and additional return

of structural excess capital. For detailed

information on ING’s 2020 dividend, reference

is made to Note 51 ‘Capital Management’.

Cash distributions on ING Groups ordinary shares are generally paid in Euros. However,

the Executive Board

may decide, with the approval of the Supervisory Board, to declare dividends in the currency of a country other

than the Netherlands in which the shares are traded. Amounts payable to holders

of ADSs that are paid to the

Depositary in a currency other than dollars will be converted to dollars and subjected to

a charge by the

Depositary for any expenses incurred by it in such conversion.

If the Executive Board has been designated as a body authorised to resolve to issue shares, it may

decide, with

the approval of the Supervisory Board, that a distribution on ordinary shares shall be made in the form of

ordinary shares instead of cash or to determine that the holders of ordinary shares

shall be given the choice of

receiving the distribution in cash or in the form of ordinary shares on such terms as the Executive Board,

with

the approval of the Supervisory Board, may decide.

The right to dividends and distributions in respect of the ordinary shares will lapse if such dividends or

distributions are not claimed within five years following the day after

the date on which they were made

available.

There are no legislative or other legal provisions currently in force

in the Netherlands or arising under ING

Groups’ Articles of Association restricting the remittance of dividends to holders of ordinary

shares, or ADSs

not resident in the Netherlands. Insofar as the laws of the Netherlands are concerned, cash dividends paid in

Euro may be transferred from

the Netherlands and converted into any other currency,

except that for

statistical purposes such payments and transactions must

be reported by ING Group to DNB

and, further, no

payments, including dividend payments, may be made to jurisdictions or persons, that

are subject to certain

sanctions, adopted by the Government of the Netherlands, implementing resolutions of the Security Council of

the United Nations, or adopted by the European Union.

Dividends are subject to withholding taxes in the Netherlands as described under Item 10, “Additional

Information - Taxation

Netherlands Taxation”.

Significant changes

For information on subsequent events reference

is made to Note 50 ‘Subsequent events’ of the consolidated

financial statements.

Since 31 December 2020, until the filing of this report, no other significant changes have occurred in the

financial statements of the Group included in “Item 18 Consolidated Financial Statem

ents” of this document.

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Item 9.

The offer and listing

Offer and listing details

Ordinary Shares (nominal value EUR 0.01 per share) are traded on Euronext Amsterdam,

the principal trading

market for

the Ordinary Shares, under the symbol “INGA”.

The Ordinary Shares are also listed on the stock

exchange of Euronext Brussels, under the symbol “INGA”.

ADSs, representing an equal number of Ordinary

Shares, are traded on the New York

Stock Exchange under the symbol “ING”.

Plan of distribution

This item does not apply to annual reports on Form 20-F.

Markets

For information regarding markets,

see Item 9.A of this Form 20-F.

Selling shareholders

This item does not apply to annual reports on Form 20-F.

Dilution

This item does not apply to annual reports on Form 20-F.

Expenses of the issue

This item does not apply to annual reports on Form 20-F.

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Item 10.

Additional information

Share capital

This item does not apply to annual reports on Form 20-F.

Memorandum and articles of association

For a description of ING’s memorandum and articles of association, please see Exhibit 2.1 “Description of

Securities Registered under Section 12 of the Exchange Act”,

which is incorporated by reference

herein.

Material contracts

There have been no material contracts outside the ordinary course

of business to which ING Groep N.V.

or any

of its subsidiaries is a party in the last two years.

Exchange controls

Cash distributions, if any, payable in Euros on Ordinary Shares and ADSs

may be officially transferred from the

Netherlands and converted into any other currency without

violating Dutch law, except that for statistical

purposes such payments and transactions must be

reported by ING Groep N.V.

to the Dutch Central Bank and,

further, no payments, including dividend payments, may be made to jurisdictions

or persons subject to certain

sanctions, adopted by the government of

the Netherlands

or the European Union.

axation

The following is a summary of certain Netherlands tax consequences, and the United States federal

income tax

consequences, of the ownership of our Ordinary Shares or American Depositary Shares (“ADSs”)

by U.S.

Shareholders (as defined below) who hold Ordinary Shares or ADSs as capital assets.

For the purposes of this summary, a “U.S. Shareholder” is a beneficial owner of Ordinary Shares or ADSs that is:

◾

an individual citizen or resident of the United States,

◾

a corporation organized under the laws

of the United States or of any state of the United States,

or any

entity taxable as United States corporation,

◾

an estate, the income of which is subject to United States federal

income tax without regard to its

source, or

◾

a trust if a court within the United States is able to exercise

primary supervision over the

administration of the trust and one or more United States

persons have the authority to control all

substantial decisions of the trust.

Further, this summary is limited to U.S.

Shareholders who are not, and are not deemed to be, a resident of the

Netherlands for Dutch tax purposes.

This summary is based on the United States Internal Revenue Code of 1986 and the laws of the Netherlands,

each as amended, their legislative history,

existing and proposed regulations, published rulings and court

decisions, and the tax treaty between the United States

and the Netherlands for the Avoidance of Double

Taxation

and the Prevention of Fiscal Evasion with respect to Taxes

on Income (“Treaty”), all as of the date

hereof. These laws are

subject to change, possibly on a retroactive basis. The information provided

below is

neither intended as tax advice nor purports to describe all of the tax considerations that

may be relevant to

investors and prospective investors.

It should not be read as extending to matters not specifically discussed,

and investors should consult their own advisors as to the tax

consequences of their ownership and disposal of

Ordinary Shares or ADSs. In particular,

the summary does not take into account the specific circumstances of

particular investors (such as tax-exempt

organizations, banks, insurance companies, dealers

in securities,

traders in securities that elect to mark-to-market

their securities holdings, investors liable for alternative

minimum tax, investors whose functional currency is not the U.S. dollar,

investors that actually or

constructively own 10% or more of the combined voting power of the voting stock or of the total value

of ING

Groep N.V.,

investors that hold Ordinary Shares or ADSs as part of a straddle

or a hedging or conversion

transaction, investors that acquired

or dispose of Ordinary Shares or ADSs as part of a wash sale, or investors

that own Ordinary Shares or ADSs through a partnership), some of which may be subject to special rules.

Moreover,

this summary does not discuss the Dutch tax treatment of a holder of Ordinary Shares or ADSs that

is an individual who receives income or capital gains derived from the Ordinary Shares and ADSs and this

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income received or capital gains derived are attributable

to the past, present or future employment activities

of such holder.

The summary is based in part upon the representations of the Depositary and the assumption that each

obligation in the Deposit Agreement and any related agreement

will be performed in accordance with its

terms. In general, for United States federal

income tax and Netherlands tax purposes, holders of ADSs will be

treated as the owners of the Ordinary Shares underlying the ADSs, and exchanges

of Ordinary Shares for ADSs,

and exchanges of ADSs for Ordinary Shares, will not be subject to United States

federal income tax or

Netherlands income tax. References to

Ordinary Shares in this section include references to ADSs.

It is assumed, for purposes of this summary, that a U.S.

Shareholder is eligible for the benefits of the Treaty

and

that a U.S. Shareholder’s eligibility is not limited by the limitation on benefits provisions of the Treaty.

Netherlands Taxation

Withholding tax on dividends

The Netherlands imposes a withholding tax on a distribution of a dividend at the statutory rate of 15%.

Dividends include:

dividends paid in cash and in kind;

ii.

deemed and constructive dividends;

iii.

the consideration for the repurchase or redemption of shares

in excess of the qualifying average paid-

in capital unless such repurchase is made for temporary investment

purposes or is exempt by law;

iv.

any (partial) repayment of paid-in capital not qualifying as capital for

Dutch dividend withholding tax

purposes;

liquidation proceeds in excess of the qualifying average

paid-in capital for Dutch dividend withholding

tax purposes; and

vi.

stock dividends up to their nominal value (unless distributed out of ING Groep N.V.’s

qualifying paid-in

capital).

Reduction of Dutch dividend withholding tax based on Dutch law

Under certain circumstances, a reduction of Dutch dividend withholding tax can be obtained

based on Dutch

law:

An exemption at source is available if the Dutch

participation exemption applies and the Ordinary

Shares or ADSs are attributable to a business carried out in the Netherlands. To

qualify for the Dutch

participation exemption, the U.S. Shareholder must generally

hold at least 5.0 percent of our nominal

paid-in capital and meet certain other requirements.

ii.

An exemption at source is available for

dividend distributions to certain qualifying corporate U.S.

Shareholders owning our Ordinary Shares or ADSs if such shareholder would have been able to apply

the Dutch participation exemption if it would have been resident

of the Netherlands, unless such

shareholder holds the Ordinary Shares or ADSs with the primary aim or one of the primary aims to

avoid the levy of Dutch dividend withholding tax at the level of another person and the Ordinary

Shares or ADSs are not held for valid commercial reasons that reflect

economic reality.

iii.

Certain tax exempt organizations

(e.g. pension funds and excluding collective investment vehicles) may

be eligible for a refund of Dutch dividend withholding tax upon their request. Based on domestic law

not yet entered into force,

in those circumstances, an exemption at source

may also become available

upon request.

iv.

Upon request and under certain conditions, certain qualifying individual and corporate U.S

Shareholders of Ordinary Shares or ADSs which are not subject to personal or corporate

income tax in

the Netherlands may request a refund of Dutch dividend withholding tax insofar

the withholding tax

withheld on the gross dividend is higher than the personal or corporate income tax which would have

been due on the net dividend if they were resident or established in the Netherlands. This refund is

however not applicable when, based on the Treaty,

the Dutch dividend withholding tax can be fully

credited in the United States by the U.S. Shareholder.

However,

it is unclear whether (i) which

(financing) costs can be taken into account

when determining the hypothetical personal or corporate

income tax due on the net income (ii) or how the Netherlands would determine whether,

based on the

double taxation convention, a full credit

is available in the country of residence of the holder for

purposes of this refund. See “United States Taxation

—Taxes

on dividends” for more information. The

provision in essence is intended to be a codification of certain judgments by both the European Free

Trade Association Court of Justice and the European

Court of Justice that already indicated that in

certain circumstances a refund should be available prior to

the introduction of the provision in Dutch

law. It is possible that this provision is an insufficient

codification of these judgments and that based

on EU law a larger refund should be provided.

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Reduction of Dutch dividend withholding tax based on the Tre

aty

Pursuant to the provisions of the Treaty,

certain corporate U.S. Shareholders owning

directly at least 10% of

our voting power are eligible for a reduction to 5% Dutch dividend withholding tax provided

that the U.S.

Shareholder is the beneficial owner of the dividends received and does not have an enterprise or an interest

an enterprise that is, in whole or in part, carried on through a permanent establishment or permanent

representative in the Netherlands to which the dividends are attributable.

The Treaty also provides

for a

dividend withholding tax exemption on dividends, but only for a shareholder owning directly at

least 80.0

percent of our voting power and meeting all other requirements.

Provided that certain conditions are met, under the Treaty

dividends paid to qualifying exempt pension trusts

and other qualifying exempt organizations, as defined in the Treaty,

are exempt from Dutch dividend

withholding tax. To

obtain a refund of the tax withheld such qualifying exempt pension trusts are

required to

file a request. Only if certain conditions are fulfilled, such qualifying exempt pension trusts may

be eligible for

relief at source upon payment of the dividend. Qualifying exempt

organizations (other than qualifying exempt

pension trusts) can only file for a refund of the tax withheld.

Anti-dividend stripping rules

Pursuant to the Dutch anti-dividend stripping rules, in the case of dividend-stripping, the 15% dividend

withholding tax cannot be reduced or refunded. Dividend-stripping is deemed to be present if the recipient

of a

dividend is, different from what has been assumed above, not the beneficial owner thereof and is entitled to

larger credit, reduction or refund of dividend withholding tax than the beneficial owner of the dividends. Under

these rules, a recipient of dividends will not be considered the beneficial owner thereof if as a consequence of

a combination of transactions a person other than the recipient wholly or partly benefits from the dividends,

whereby such person retains, whether directly or indirectly,

an interest similar to the shares on which the

dividends were paid.

Credit for ING Groep N.V.

ING Groep N.V.

may, with respect to

certain dividends received from qualifying non-Netherlands subsidiaries,

credit taxes withheld from those dividends against the Netherlands

withholding tax imposed on certain

qualifying dividends that are redistributed by ING Groep N.V.,

up to a maximum of the lesser of:

3% of the amount of qualifying dividends redistributed by ING Groep N.V.;

and

3% of the gross amount of certain qualifying dividends received by ING Groep N.V.

The reduction is applied to the Dutch dividend withholding tax that ING Groep N.V.

must pay to the Dutch tax

authorities and not to the Dutch dividend withholding tax that ING Groep N.V.

must withhold.

Taxes

on income and capital gains

Income and capital gains

Income and capital gains derived from the Ordinary Shares or ADSs by an individual or corporate

U.S.

Shareholder are generally not subject to Netherlands income tax or corporation

tax, unless:

such income and gains are attributable to a (deemed) permanent establishment

or (deemed)

permanent representative in the Netherlands of the U.S. Shareholder;

ii.

the shareholder is entitled to a share in the profits of an enterprise or (in case of a non-Dutch resident

corporate shareholder only) a co-entitlement to the net

worth of an enterprise, that is effectively

managed in the Netherlands (other than by way of securities) and to which enterprise the Ordinary

Shares or ADSs are attributable; or

iii.

such income and capital gains are derived from a direct, indirect or deemed substantial

interest in the

share capital of ING Groep N.V.

(such substantial interest not being a business asset), and in the case

of a non-Dutch resident corporate shareholder only,

that substantial interest is being held with the

primary aim or one of the primary aims to avoid the levy of income tax from another person and is put

in place without valid economic reasons that reflect economic reality;

iv.

in case of a non-Dutch resident corporate shareholder,

such shareholder is a resident of Aruba,

Curacao or Saint Martin with a permanent establishment or permanent representative

in Bonaire,

Eustatius or Saba to which the Ordinary Shares or ADS are attributable, while the profits of such

shareholder are taxable in the Netherlands pursuant to Article 17(3)(c) of the Dutch Corporate

Tax Act

1969; or

in case of a non-Dutch resident individual, such individual derives income or capital gains from the

Ordinary Shares or ADSs that are taxable as benefits from

‘miscellaneous activities’ in the Netherlands

(‘resultaat uit overige werkzaamheden’,

as defined in the Dutch Income Tax

Act 2001), which includes

the performance of activities with respect to the Ordinary Shares or ADSs that exceed regular

portfolio

management.

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Substantial interest

Generally speaking, for Dutch tax purposes, an interest in the share

capital of ING Groep N.V.,

should not be

considered a substantial interest if the holder of such interest,

and, in case of an individual, his or her spouse,

registered partner,

certain other relatives or certain persons sharing the holder’s household, alone or together,

does or do not hold, either directly or indirectly, the ownership

of, or certain rights over,

shares or rights

resembling shares representing 5% or more of the total issued and outstanding

capital, or the issued and

outstanding capital of any class of shares, of ING Groep N.V.

Gift or inheritance tax

No Netherlands gift or inheritance tax will be imposed on the transfer or deemed transfer

of the Ordinary

Shares or ADSs by way of a gift by or on the death of a U.S. Shareholder if,

at the time of the gift or the death of

that shareholder,

such shareholder is not a (deemed) resident of the Netherlands.

Netherlands inheritance or gift taxes (as the case may be) are due, however,

if the transfer of the bearer

receipts or ADSs are construed as an inheritance or as a gift made by or on behalf of a person who, at the time

of the gift or death, is deemed to be a resident of the Netherlands. For the purposes of Netherlands gift or

inheritance tax, an individual of Dutch nationality is deemed to be a resident of the Netherlands if he or she

has been a resident thereof at any time during the ten years preceding

the time of the gift or death. For the

purposes of Netherlands gift tax, any person is deemed to be a resident of the Netherlands if he or she has

resided therein at any time in the twelve months preceding the gift.

United States Taxation

Taxes

on dividends

The tax treatment of owning Ordinary shares will depend in part on whether or not ING Groep N.V.

is classified

as a passive foreign investment company,

or PFIC, for United States federal

income tax purposes.

Except as

discussed below under “-PFIC Rules”, this discussion assumes that we

are not classified as a PFIC for United

States federal income tax

purposes.

Under the United States federal income tax

laws, a U.S. Shareholder will be required to include in gross income

the full amount of a cash dividend (including any Netherlands withholding tax withheld) as ordinary income

when the dividend is actually or constructively received by the U.S. Shareholder.

For this purpose, a “dividend”

will include any distribution paid by ING Groep N.V.

with respect to the Ordinary Shares, but only to the extent

such distribution is not in excess of ING Groep N.V.’s

current and accumulated earnings and profits as

determined for United States federal

income tax purposes. Distributions in excess of current and accumulated

earnings and profits, as determined for United States federal

income tax purposes, will be treated as a non-

taxable return of capital to the extent

of a U.S. Shareholder’s basis in the Ordinary Shares and thereafter as

capital gain. Because ING Groep N.V.

does not keep account of its earnings and profits, as determined for

United States federal income tax

purposes, U.S. Shareholders should generally expect to treat

any distribution

as a dividend for U.S. federal income tax

purposes.

For foreign tax credit purposes, dividends will generally be income

from sources outside the United States and

will, depending on the circumstances of the U.S. Shareholder,

generally be “passive” income for purposes of

computing the foreign tax credit allowable to the shareholder.

A dividend will not be eligible for the dividends

received deduction generally allowed to U.S. corporations

in respect of dividends received from other U.S.

corporations. Dividends paid to a non-corporate U.S.

Shareholder that are considered qualified dividend

income will be taxable to the shareholder at preferential

rates applicable to long-term capital gains provided

that the shareholder holds the Ordinary Shares for more than 60 days during the 121-day

period beginning 60

days before the ex-dividend date

and meets other holding period requirements. Dividends paid by ING Groep

N.V.

with respect to the Ordinary Shares generally will be qualified dividend income, provided that, in the year

that you receive the dividend, we are eligible for the benefits of the Treaty.

We believe that we are currently

eligible for the benefits of the Treaty

and we therefore expect that dividends on the Ordinary Shares will be

qualified dividend income, but there can be no assurance that we will continue to be eligible for the benefits of

the Treaty.

Subject to certain limitations, a U.S. Shareholder may generally

deduct from income, or credit against its

United States federal income tax

liability, the amount of any Netherlands withholding taxes

under the Treaty.

The Netherlands withholding tax will likely not be creditable against the U.S.

Shareholder’s United States tax

liability, however,

to the extent that ING Groep N.V.

is allowed to reduce the amount of dividend withholding

tax paid over to the Netherlands Tax

Administration by crediting withholding tax imposed on certain dividends

paid to ING Groep N.V.

In addition, special rules apply in determining the foreign tax credit limitation with

respect to dividends that are subject to preferential

rates. To

the extent a reduction or refund of the tax

withheld is available to you under Dutch law or under the Treaty,

the amount of tax withheld that could have

been reduced or is refundable will not be eligible for credit against your United

States federal income tax

liability. In addition, to the extent

an amount of Dutch tax withheld is contingent on the availability of a credit

against the amount of income tax owed to another country,

that amount of Dutch tax withheld will not be

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eligible for a credit against your United States federal

income tax liability. It is unclear whether or how the

Netherlands would apply this rule in determining whether,

based on the Treaty,

a credit is available in the

United States for purposes of the dividend withholding tax refund

provision described in Section IV under

“Netherlands Taxation

—Withholding tax on dividends—Reduction of Dutch dividend withholding tax based on

Dutch law”.

Since payments of dividends with respect to Ordinary Shares will be made in Euros, a U.S. Shareholder will

generally be required to determine the amount of dividend income by translating

the Euro into United States

dollars at the “spot rate” on the date

the dividend distribution is includable in the income of the U.S.

Shareholder.

Generally, any

gain or loss resulting from currency exchange fluctuations during the period from

the date the dividend distribution is includable in the income of the U.S. Shareholder to the date such payment

is converted into U.S. dollars will be treated

as ordinary income or loss and will not be eligible for the special

tax rate applicable to qualified dividend income. Such gain or loss will generally

be income or loss from sources

within the United States for foreign tax

credit limitation purposes.

Taxes

on capital gains

Gain or loss on a sale or exchange of Ordinary Shares by a U.S. Shareholder will generally

be a capital gain or

loss for United States federal

income tax purposes. If such U.S. Shareholder has held the Ordinary Shares for

more than one year,

such gain or loss will generally be long-term capital gain or loss. Long-term capital gain

a non-corporate U.S. Shareholder is generally taxed

at preferential rates.

In general, gain or loss from a sale or

exchange of Ordinary Shares by a U.S. Shareholder will be treated

as income or loss from sources within the

United States for foreign tax

credit limitation purposes.

PFIC rules

ING Groep N.V.

believes it is not a PFIC for United States federal

income tax purposes, and it does not expect to

become a PFIC in the foreseeable future. However,

this conclusion is a factual determination that must be

made annually and thus may be subject to change. It is therefore possible that we could

become a PFIC in a

future taxable year

If ING Groep N.V.

were to be treated as a PFIC, unless a U.S. Shareholder made an effective

election to be taxed

annually on a mark-to-market basis with respect to the Ordinary Shares, any gain

from the sale or disposition

of Ordinary Shares by a U.S. Shareholder would be allocated ratably

to each year in the holder’s holding period

and would be treated as ordinary income. Tax

would be imposed on the amount allocated to each year prior to

the year of disposition at the highest rate in effect

for that year,

and interest would be charged at the rate

applicable to underpayments on the tax payable

in respect of the amount so allocated. The same rules would

apply to “excess distributions”,

defined generally as distributions in a single taxable year exceeding

125% of the

average annual distribution made by ING Groep N.V.

over the shorter of the three preceding taxable years

the portion of the holder’s holding period that preceded the current taxable year.

Dividends received by a U.S.

Shareholder will not be eligible for the special tax rates applicable to qualified dividend income if ING Groep

N.V.

were to be treated as a PFIC with respect to the shareholder either in the taxable

year of the distribution

or the preceding taxable year,

but instead will be taxable at rates applicable to

ordinary income.

A U.S. Shareholder who owns Ordinary Shares during any year that ING Groep N.V.

is a PFIC may be required to

file Internal Revenue Service Form 8621.

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Dividends and paying agents

This item does not apply to annual reports on Form 20-F.

Statement by experts

This item does not apply to annual reports on Form 20-F.

Documents on display

ING Groep N.V.

is subject to the informational requirements of the Securities Exchange Act of 1934, as

amended. In accordance with these requirements, ING Groep N.V.

files reports and other information with the

Securities and Exchange Commission (”SEC”). These materials, including this Annual Report and its exhibits,

may be inspected and copied on the SEC’s website at www.sec.gov.

You may

also inspect ING Groep N.V.’s

SEC

reports and other information on the website of ING Groep N.V.

(www.ing.com).

Subsidiary information

This item does not apply to annual reports on Form 20-F.

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Item 11. Quantitative

and Qualitative

Disclosure of Market

Risk

See “Item 5. Operating and Financial Review and Prospects – Factors

Affecting Results of Operations” and

“Additional information

ING Group Risk Management” for these

disclosures, including disclosures relating to

operational, compliance and other non-market-related

risks.

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Item 12. Description of Securities Other

Than Equity Securities

Debt securities

This item does not apply to annual reports on Form 20-F.

Warrants and rights

This item does not apply to annual reports on Form 20-F.

Oth

er securities

This item does not apply to annual reports on Form 20-F.

American depositary shares

Fees and Charges Payable

by a Holder of ADSs

JPMorgan Chase Bank, N.A., as ADR depositary,

may collect fees for,

among other things, the delivery and

surrender of ADSs directly from investors, or from

intermediaries acting for them, depositing Ordinary Shares

or surrendering ADSs for the purpose of withdrawal.

The charges of the ADR depositary payable which may be payable

by investors are as follows:

Type of Service

ADR Depositary Actions

Fee Payable

Depositing or

substituting the

underlying Ordinary

Issuance of ADSs against the deposit of Ordinary Shares,

including deposits and issuances in respect of:

share distributions, rights and other

distributions.

a stock dividend or stock split.

a merger, exchange

of securities or

other transactions or events affecting

the ADSs or the underlying Ordinary

Shares.

$5.00 for each 100 ADSs (or portion

thereof) issued, delivered or upon

which a share distributive or elective

distribution is made or offered.

The

ADR depositary may sell sufficient

securities or property received in

respect of share distributions, rights

and other distributions prior to such

deposit to pay such charge.

Receiving or

distributing cash

dividends

Distribution of cash dividends or other cash distributions, or

offering of elective cash/stock dividends.

$0.05 or less per ADS held.

Selling or exercising

rights

additional ADRs resulting from a

dividend or free distribution consisting

of Ordinary Shares, or U.S dollars

resulting from sales of Ordinary Shares

received in a distribution.

Instruments representing rights to

acquire additional ADRs as a result of

distribution on Ordinary Shares, or U.S

dollars resulting from sales of such

rights.

other securities available to the ADR

depositary resulting from any

distribution on the deposited Ordinary

Shares, or U.S dollars resulting from

sales of such other securities.

An amount equal to the fee for the

execution and delivery of ADSs which

would have been charged as a result

of the deposit of such securities.

Withdrawing an

underlying Ordinary

Acceptance of ADSs surrendered for withdrawal of deposited

Ordinary Shares

$5.00 for each 100 ADSs (or portion

thereof) reduced, cancelled or

surrendered.

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Type of Service

ADR Depositary Actions

Fee Payable

Transferring,

splitting or grouping

of ADRs

Registration, registration of transfer,

combination and split-up

of ADRs in the ADR register as evidenced by the ADRs

surrendered or upon delivery of proper instruments of transfer

$1.50 per ADR.

General depositary

services, particularly

those charged on an

annual basis

Other services performed by the ADR depositary in

administering the ADR program

$0.05 per ADS per calendar year (or

portion thereof), which may be

charged on a periodic basis during

each calendar year against holders of

the record date(s) set by the ADR

depositary and shall be payable at

the sole discretion of the ADR

depositary by billing such holders or

deducting such charge from one or

more cash distributions.

Reimbursement of

fees, charges and

expenses of the ADR

depositary

The ADR depositary and/or any of its agents may incur fees,

charges and expenses (including expenses incurred on behalf

of holders of ADRs in connection with compliance with foreign

exchange control regulations or any

law or regulation relating

to foreign investment) in connection with the servicing of the

underlying Ordinary Shares or other deposited securities, the

sale of securities (including, without limitation, deposited

securities), the delivery of deposited securities or otherwise in

connection with the ADR depositary’s compliance with

applicable law, rule or regulation.

Fees and charges shall be assessed

on a proportionate basis against

holders of ADRs as of the record date

or dates set by the ADR depositary

and shall be payable at the sole

discretion of the ADR depositary by

billing such holders of ADRs or by

deducting such charge from one or

more cash dividends or other cash

distributions.

Type of Service

ADR Depositary Actions

Fee Payable

Other charges and

expenses of the ADR

depositary

The ADR depositary may incur charges and expenses on behalf

of holders in connection with:

stock transfer or other taxes

and other

governmental charges.

SWIFT, cable, telex

and facsimile

transmission and delivery charges

incurred at the request of persons

depositing, or holders of ADRs delivering

underlying Ordinary Shares, ADRs or

deposited securities.

transfer or registration fees

for the

registration or transfer of deposited

securities.

fees, expenses and other charges of the

ADR depositary or its agent in

connection with the conversion of

foreign currency into U.S. dollars.

Payable by holders or persons

depositing Ordinary Shares.

Payable by persons depositing, or

holders of ADRs delivering underlying

Ordinary Shares, Ads or deposited

securities.

Payable by persons depositing or

withdrawing deposited securities.

Payable by persons receiving such

foreign currency,

as the ADR

depositary will deduct any fees,

expenses and other charges prior to

distributing such foreign currency.

Fees and Payments made by the ADR depositary to

ING

In consideration for acting as depositary,

the ADR depositary has agreed to provide ING with certain amounts

on an annual basis. In the year ended 31 December 2020, the ADR depositary paid aggregate fees and made

other direct and indirect payments to ING in an amount of USD 3,335,215.

Under certain circumstances, including removal of the ADR depositary or termination of the ADR program

ING, ING is required to repay the ADR depositary certain amounts reimbursed

and/or expenses paid to or on

behalf of ING.

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132

PART

II.

Item 13. Defaults,

Dividend Arrearages

and

Delinquencies

None.

Item 14. Material Modifications

to the

Rights of Security Holders and Use of

Proceeds

None.

Item 15. Controls and Procedures

Internal control over financial reporting

Due to the listing of ING shares on the New York Stock

Exchange, ING Group is required to comply with the SEC

regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act (SOX

404). These regulations require that

the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of ING Group report and certify on an

annual basis on the effectiveness of ING Group’s

internal control over financial reporting. Moreover,

the external

auditors are required to provide an opinion on the effectiveness

of ING Group’s internal

control over financial

reporting.

SOX 404 activities are organized along the lines of the governance

structure, and involve the participation of

senior management across ING. Following the SOX 404 process, ING is in the position to publish an unqualified

statement that the Company’s

internal control over financial reporting was effective

as of 31 December 2020.

The SOX 404 statement by the Executive

Board is included on this page, followed by the report of the external

auditor as issued on Form 20-F.

Disclosure Controls and Procedures

The Company’s management, under the supervision and with the participation of the CEO and CFO, has

performed an evaluation of the effectiveness of the design and operation

of the Company’s disclosure controls

and procedures. Based on that evaluation, the CEO and CFO concluded that the Company’s

disclosure controls

and procedures were effective as of December 31, 2020, the end of the period covered

by the 2020 Form 20-F.

Report of the Executive Board on Internal

Control Over Financial Reporting

The Executive Board is responsible for establishing and maintaining

adequate internal control over financial

reporting. ING’s internal control

over financial reporting is a process designed under the supervision of our

principal executive and principal financial officers to provide reasonable

assurance regarding the reliability of

financial reporting and the preparation of financial statements for

external purposes in accordance with generally

accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that:

◾

Pertain to the maintenance of records that,

in reasonable detail, accurately and fairly reflect the

transactions and dispositions of assets of ING;

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◾

Provide reasonable assurance that transactions are recorded

as necessary to permit preparation of

financial statements in accordance with generally accepted

accounting principles, and that our receipts

and expenditures are being made only in accordance with authorisations of our management and

directors; and

◾

Provide reasonable assurance regarding prevention

or timely detection of unauthorised acquisition, use

or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation

of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that

the degree of compliance with the

policies or procedures may deteriorate.

The Executive Board assessed the effectiveness of internal

control over financial reporting as of 31 December

In making this assessment, the Executive Board performed tests based on the criteria of the Committee

Sponsoring Organisations of the Treadway

Commission (“COSO”) in Internal Reporting – Integrated Framework

(2013 Framework). Based on the Executive Board’s

assessment and those criteria, the Executive Board concluded

that the Company’s internal control

over financial reporting was effective as of 31 December 2020.

Attestation Report

of the Registered Public Accounting Firm

Our independent registered public accounting firm has audited and issued their report on ING’s

internal control

over financial reporting, which appears on the page below.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s internal

controls over financial reporting during the period

covered by this Annual Report that have materially affected

or are reasonably likely to materially affect,

our

internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Shareholders

and the Supervisory Board

ING Groep N.V.:

Opinion on Internal Control Over Financial Reporting

We have audited ING Groep N.V.

and subsidiaries’ (‘the Company’) internal control over financial reporting as of

December 31, 2020, based on criteria established in Internal Control – Integrated

Framework (2013) issued by

the Committee of Sponsoring Organizations of the Treadway

Commission. In our opinion, the Company

maintained, in all material respects, effective

internal control over financial reporting as of December 31, 2020,

based on criteria established in Internal Control – Integrated

Framework (2013) issued by the Committee of

Sponsoring Organizations of the Treadway

Commission.

We also have audited, in accordance with the standards

of the Public Company Accounting Oversight Board

(United States) (‘PCAOB’), the consolidated statements

of financial position of the Company as of December 31,

2020 and 2019, the related consolidated statements

of profit or loss, comprehensive income, changes in equity,

and cash flows for each of the years in the three-year period ended December 31, 2020, and the related

notes

and specific disclosures described in Note 1 of the consolidated financial statements as being part of the

consolidated financial statements (collectively,

‘the consolidated financial statements’), and our report dated

March 8, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining

effective internal control

over financial reporting and

for its assessment of the effectiveness of internal control

over financial reporting, included in the accompanying

Report of the Executive Board on Internal Control

Over Financial Reporting. Our responsibility is to express an

opinion on the Company’s internal control over

financial reporting based on our audit. We are a public

accounting firm registered with the PCAOB and are required

to be independent with respect to the Company in

accordance with the U.S. federal securities laws and the applicable rules and regulations

of the Securities and

Exchange Commission and the PCAOB.

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We conducted our audit in accordance with the standards

of the PCAOB. Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether effective

internal control over financial

reporting was maintained in all material respects. Our audit of internal control

over financial reporting included

obtaining an understanding of internal control

over financial reporting, assessing the risk that a material

weakness exists, and testing and evaluating the design and operating

effectiveness of internal control

based on

the assessed risk. Our audit also included performing such other procedures as we considered necessary in the

circumstances. We believe that our audit provides

a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control

over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation

of financial statements for external purposes in

accordance with generally accepted accounting principles. A company’s

internal control over financial reporting

includes those policies and procedures that (1) pertain to the maintenance of records that,

in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide

reasonable assurance that transactions are recorded

as necessary to permit preparation of financial statements

in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company

are being made only in accordance with authorisations of management and directors of the company;

and (3)

provide reasonable assurance regarding prevention

or timely detection of unauthorised acquisition, use, or

disposition of the company’s assets that could have a material

effect on the financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation

of effectiveness to future periods are subject to the risk that

controls may become inadequate because of changes in conditions, or that the

degree of compliance with the

policies or procedures may deteriorate.

/s/ KPMG Accountants N.V.

Amstelveen, The Netherlands

March 8, 2021

Item 16A. Audit Committee Financial Expert

The Supervisory Board has determined that Margarete Haase, who is a member of the Supervisory Board,

qualifies as an “audit committee financial expert” as defined by the SEC pursuant to section 407 of the Sarbanes-

Oxley Act of 2002. The Supervisory Board has further determined that Margarete Haase is “independent”,

defined in Rule 10A-3 under the U.S. Securities Exchange Act of 1934. She was appointed as a member of the

Supervisory Board at the General Meeting in May 2017 and her appointment became effective

as per 1 May

2018, as decided by the Supervisory Board in January 2018. Margarete Haase is chairwoman of the Audit

Committee.

Item 16B. Code of Ethics

How we work

Creating a differentiating employee experience

starts with ING’s distinctive

culture: entrepreneurial, open,

collaborative, innovative and energetic.

Who we are and how we work are set out in the Orange Code, our

internal Code of Ethics. Putting

‘integrity above all’

, it comprises:

Our values.

The non-negotiable promises we make to the world no matter

what.

◾

We are honest.

◾

We are responsible.

◾

We are prudent.

Our behaviours.

The commitments we make to each other and the standards by which we measure each other’s

performance:

◾

You take

it on and make it happen.

◾

You help others to

be successful.

◾

You are always

a step ahead.

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The Orange Code is supported by a compliments tool, kudos, that allows employees

to give each other

compliments based on Orange Code behaviours. Employees are introduced

to the Orange Code early with new

joiners invited to complete a global online e-learning introduction module that

explains more about ING’s

culture, how we work and what we expect from employees. In 2019, ING also developed

a global code of conduct

that builds on the Orange Code and sets the standards we expect our people to uphold. This ING Global Code of

Conduct was launched in February 2020. All employees were requested to perform

online e-learning explaining

the Global Code of Conduct in more detail and signed off on adherence to the Global Code of Conduct.

Our Orange Code is included within the performance management process and discussed throughout the year.

is also linked to our Employee Value Proposition

(or Our People Offer), which forms the basis of all people-

related programmes. Through these activities, our aim is to develop a culture

that is focused on long- term value

creation.

The Orange Code applies to all employees worldwide, including the principal executive, financial and accounting

officers. The values and behaviours of the Orange Code are available

on the ING website at

https://www.ing.jobs/Global/Careers/Orange

-code.htm.

In 2020, there were no amendments to the Orange Code. ING did not grant any

waivers (including implicit

waivers) under the Orange Code to the principal executive,

financial or accounting officers in 2020.

Regarding the management of actual or potential conflicts of interest,

ING maintains a Policy on Information

Barriers and Conflicts of Interest which applies to all employees worldwide, including the principal executive,

financial and accounting officers. A description of the Policy on Information Barriers

and Conflicts of Interest is

available to view on the ING website at https://www.ing.com/About

-us/Compliance/Information-Barriers-

Conflicts-of-Interest.htm.

The Conflict of Interest Policy “aims to identify,

assess, manage and mitigate or prevent actual and potential

conflicts between ING customers and between the interests

of ING an the private interests of ING Employees,

including members of ING’s Senior Management which could adversely

influence the performance of their duties

and responsibilities”.

In 2020, an updated Conflicts of Interest was launched and implemented throughout

ING globally.

. ING did not

grant any waivers (including implicit waivers)

under the Conflicts of Interest Policy to the principal executive,

financial or accounting officers in 2020.

Regarding reporting of breaches of the Orange Code, encouraging

a speak up culture and raising concerns about

suspected or actual criminal conduct, unethical conduct or other misconduct by or within ING, ING maintains a

Whistleblower Policy next to the standard reporting

and escalation lines. This requires prompt internal reporting

of violations of the Orange Code and applies to all employees worldwide, including the principal executive,

financial and accounting officers. A description of the Whistleblower Policy is available

on the ING website at

www.ing.com/About

-us/Compliance/ING-Group-Whistleblower-Policy.htm.

ING did not grant any waivers (including implicit waivers)

under the Whistleblower Policy to the principal

executive, financial or accounting officers in 2020.

Banker’s Oath

All employees working for ING in the Netherlands (including ING's principal executive, financial or accounting

officers) take the Banker's

Oath. The oath contains a set of principles affirming the banking industry's

commitment to maintain high standards of ethical behaviour.

Accountability and a disciplinary sanction

mechanism are linked to breaches of these principles.

Compliance is trained to support employees in dealing with dilemmas via workshops and dialogue sessions, using

the Orange Code Decision Making

model (a so-called “four-step approach” weighing the rights and interest

stakeholders involved).

In 2020, there were no amendments to the Banker's Oath. ING did not grant

any waivers under the Banker's Oath

to principal executive, financial or accounting officers in 2020. The text

of the Banker’s oath can be found here:

https://www.ing.com/About

-us/Corporate-governance/Dutch-Banking-Code.htm

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136

Item 16C. Principal Accountant

Fees and

Services

At the Annual General Meeting held on 23 April 2019, KPMG was re-appointed as the external audit firm for

ING

Group for the financial years 2020 through 2023. This appointment includes the responsibility to provide

an audit

opinion on the financial statements and internal control over

financial reporting on 31 December 2020 and to

report on the outcome of these audits to the Executive Board and the Supervisory Board.

The external auditor may be questioned at the Annual General Meeting in relation to

its audit opinion on the

financial statements. The external auditor will therefore

attend and be entitled to address this meeting. The

external auditor attended the meetings of the Risk Committee and of the Audit Committee

and attended and

addressed the 2020 Annual General Meeting, at which the external auditor was questioned about its audit

opinion.

The external auditor may only provide services to ING Group and its subsidiaries with the permission of the Audit

Committee, in line with the ING Group Policy on External Auditors’ Independence. All services were approved

the Audit Committee.

More information on the ING Group Policy on External Auditors’

Independence is available on the website of ING

Group www.ing.com.

Audit fees

Audit fees were paid for professional services rendered

by the auditors for the audit of the consolidated financial

statements of ING Group and statutory

financial statements of ING’s

subsidiaries or services provided in

connection with the audit of Form 20-F and other filings for regulatory and supervisory purposes as well as the

review on interim financial statements

and work performed relating to comfort letters

issued in connection with

prospectuses and reviews of SEC product filings.

Audit-related fees

Audit-related fees were

paid for assurance and related services that are reasonably related

to the performance of

the audit or review of the consolidated financial statements and are not reported

under the audit fee item

above. These services consisted primarily of specific agreed-upon procedure engagements

and assurance

engagements.

Tax

fees

Over 2020 no tax fees were paid. Under the current ING Policy

on External Auditor Independence most tax

services are prohibited and some tax services are only allowed after specific approval

under an ‘exception

procedure’.

Reference is made to Note 28 ‘Other operating

expenses’ in the consolidated financial statements for

audit,

audit-related, tax and all other fees

paid to the external auditors in 2020, 2019 and 2018.

Item 16D. Exemptions

from the Listing

Standards for

Audit Committees

Not applicable.

Item 16E. Purchases of Equity

Securities by

the Issuer and Affiliated Purchasers

There were no purchases by us or any of our affiliated purchasers

of any of our equity securities registered

pursuant to Section 12 of the U.S. Securities Exchange Act of 1934 during the fiscal years ended December 31,

2020 and 2019.

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Item 16F.

Changes in Registrant’s

Certifying

Accountant

Not applicable.

Dutch Corporate Governance Code

ING Group uses the Dutch Corporate Governance Code (DCGC) as reference

for its corporate governance

structure and practices.

ING’s application of the DCGC is described in the 2020 ‘Application

of the Dutch Corporate Governance Code by

ING Groep N.V.’,

dated 8 March 2021, available on ing.com. This is to be read in conjunction with this chapter

and is deemed to be incorporated into this chapter.

The DCGC can be downloaded from the website mccg.nl.

Dutch Banking Code

The Dutch Banking Code (Banking Code), is only applicable to ING Bank N.V.

(ING Bank) and not to ING Group.

However,

ING Group voluntarily applies the principles of the Banking Code regarding remuneration

to its

Executive Board members and senior management. The application by ING Bank is described in the 2020

publication ‘Application

of the Dutch Banking Code by ING Bank N.V.’,

dated 8 March 2021, available on ing.com.

The Banking Code can be downloaded from the website nvb.nl/english/.

Differences between Dutch and US corporate governance practices

ING Group is a public limited liability company (naamloze vennootschap) organised

under the laws of the

Netherlands. It qualifies as a foreign private issuer under the US Securities and Exchange Commission (SEC) rules

and for the purposes of the New York Stock

Exchange (NYSE) listing standards. Under NYSE listing standards,

listed companies that are foreign private

issuers are permitted to follow home-country practice

in some

circumstances, in lieu of the provisions of the corporate governance

rules contained in Section 303A of the NYSE

Listed Company Manual applicable to US-listed companies. In accordance with

the requirements of the SEC and

NYSE, ING Group must disclose in its Annual Report on Form 20-F any significant differences

between its

corporate governance practices and those applicable to

US companies under NYSE listing standards. ING Group

believes the following to be the significant differences between

its corporate governance practices and the NYSE

corporate governance rules applicable to US companies:

•

ING Group has a two-tier board structure, in contrast to

the one-tier board structure used by most US

companies. In the Netherlands, a public limited liability company with a two-tier board structure has an

executive board as its management body and a supervisory board that advises and supervises the executive

board. Supervisory board members are often former state

or business leaders and sometimes former

members of the executive board. A member of the executive

board or other officer or employee of the

company cannot simultaneously be a member of the supervisory board. The supervisory board must approve

specified decisions of the executive board.

•

NYSE listing standards generally require

a majority of board members to be ‘independent’ as determined

under the NYSE listing standards. Under the DCGC, all members of the supervisory board, with the exception

of not more than one person, should be ‘independent’ as determined under the DCGC. However,

the

definition of ‘independent’ under the DCGC differs in its details from the definition of ‘independent’ under the

NYSE listing standards. In some cases, Dutch requirements

are stricter; in other cases the NYSE listing

standards are stricter

. All members of ING’s Supervisory Board, are independent as determined under the

DCGC.

•

NYSE listing standards require a US company to

have a compensation committee and a nominating/corporate

governance committee, each composed entirely of independent director

(as determined under the NYSE

listing standards). ING’s

Nomination and Corporate Governance Committee

and Remuneration Committee are

composed entirely of members of the Supervisory Board who are independent as determined under the

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DCGC.

•

NYSE listing standards require that, when a member of the audit committee

of a US company serves on four

or more audit committees of public companies, the company should disclose (on its website, in its annual

proxy statement or in its annual report filed with the SEC) that the

board of directors has determined this

simultaneous service would not impair the director’s service to the company.

Dutch law does not require the

Supervisory Board to make such a determination.

•

In contrast to the NYSE listing standards,

the DCGC contains an ‘apply-or-explain’

principle, offering the

possibility of deviating from the DCGC. For any deviations by ING Group, please refer

to the paragraph ‘Dutch

Corporate Governance Code’.

•

NYSE listing standards applicable to US companies require external

auditors to be appointed by the audit

committee. By contrast, Dutch

law requires ING Group’s external

auditors to be appointed by the General

Meeting and not by the Audit Committee. The Audit Committee is responsible for preparing the Supervisory

Board’s nomination to the General

Meeting for the appointment and remuneration of ING Group’s

external

auditor,

and annually evaluates the independence and functioning of, and developments in the relationship

with, ING Group’s external

auditor and informs the Supervisory Board of its findings and proposed measures.

•

Under NYSE listing standards, shareholders of US companies must be given the opportunity to

vote on all

equity compensation plans and to approve material revisions to those plans, with limited

exceptions set forth

in the NYSE rules. The NYSE rules require a shareholder vote on all equity compensation plans applicable to

any employee, director or other service provider of a company.

The results of such votes are advisory in

nature rather than binding. Under Dutch law and the DCGC, binding shareholder approval

is only required for

equity compensation plans (or changes thereto) for members of the executive

board and supervisory board,

and not for equity compensation plans for other groups of employees.

Item 16H. Mine Safety

Disclosure

Not applicable.

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PART

III.

Item 17. Consolidated Financial Statements

Not applicable.

Item 18. Consolidated Financial Statements

Reference is made to the Consolidated financial statements

of ING Group on page F-249.

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Item 19. Exhibits

The following exhibits are filed as part of this Annual Report:

Exhibit 1.1

Amended and Restated Articles of Association of ING Groep N.V., dated May 6, 2020

(incorporated by reference to Exhibit 99.1 of ING Groep N.V.’s Report on Form 6-K filed on 25

August 2020)

Exhibit 2.1

Description of Securities Registered under Section 12 of the Exchange Act

Exhibit 2.2

Subordinated Indenture, dated 18 July 2002, between the Company and The Bank of New

York, (incorporated by reference to Exhibit 2.1 of ING Groep N.V.’s Annual Report on Form 20-

F for the year ended 31 December 2002, File No. 1-14642 filed on 27 March 2003)

Exhibit 2.3

Third Supplemental Indenture, dated 28 October 2003, between the Company and The Bank

of New York (incorporated by reference to Exhibit 2.4 of ING Groep N.V.’s Annual Report on

Form 20-F for the year ended 31 December 2003, File No. 1-14642 filed on 30 March 2004)

Exhibit 2.4

Fourth Supplemental Indenture, dated 26 September 2005, between the Company and The

Bank of New York (incorporated by reference to Exhibit 4.2 of ING Groep N.V.’s Report on

Form 6-K filed on 23 September 2005)

Exhibit 2.5

Sixth Supplemental Indenture, dated 13 June 2007, between the Company and The Bank of

New York (incorporated by reference to Exhibit 4.1 of ING Groep N.V.’s Report on Form 6-K

filed on 12 June 2007)

Exhibit 2.6

First Supplemental Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as trustee, dated 16 April 2015, in respect of 6.000% Perpetual Additional Tier

1 Contingent Convertible Capital Securities (incorporated by reference to Exhibit 4.2 of ING

Groep N.V.’s Report on Form 6-K filed on 16 April 2015)

Exhibit 2.7

Second Supplemental Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as trustee, dated 16 April 2015, in respect of 6.500% Perpetual Additional Tier

1 Contingent Convertible Capital Securities (incorporated by reference to Exhibit 4.3 of ING

Groep N.V.’s Report on Form 6-K filed on 16 April 2015)

Exhibit 2.8

Senior Debt Securities Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as Trustee, dated 29 March 2017 (incorporated by reference to Exhibit 4.1 of

ING Groep N.V.’s Report on Form 6-K filed on 29 March 2017)

Exhibit 2.9

First Supplemental Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as trustee, dated 29 March 2017, in respect of 3.150% Fixed Rate Senior Notes

due 2022, 3.950% Fixed Rate Senior Notes due 2027 and Floating Rate Senior Notes due 2022

(incorporated by reference to Exhibit 4.2 of ING Groep N.V.’s Report on Form 6-K filed on 29

March 2017)

Exhibit 2.10

Third Supplemental Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as trustee, dated 9 April 2019, in respect of 3.550% Fixed Rate Senior Notes

due 2024 and 4.050% Fixed Rate Senior Notes due 2029 (incorporated by reference to Exhibit

4.1 of ING Groep N.V's Report on Form 6-K filed on 9 April 2019)

Exhibit 2.11

Third Supplemental Indenture between ING Groep N.V. and The Bank of New York Mellon,

London Branch, as trustee, dated 10 September 2019, in respect of 5.750% Perpetual

Additional Tier 1 Contingent Convertible Capital Securities (incorporated by reference to

Exhibit 4.1 of ING Groep N.V's Report on Form 6-K filed on 10 September 2019)

Exhibit 8

List of Subsidiaries of ING Groep N.V.

Exhibit 12.1

Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the

Sarbanes Oxley Act of 2002

Exhibit 12.2

Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

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Exhibit 13.1

Certification of the Registrant’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 13.2

Certification of the Registrant’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 15.1

Consent of KPMG Accountants

Exhibit 101

eXtensible Business Reporting Language (XBRL)

SIGNATURES

The registrant hereby certifies that it meets all the requirements

for filing on Form 20-F and that it has duly

caused and authorised the undersigned to sign this annual report on its behalf.

ING Groep N.V.

(Registrant)

By:/s/T.

Phutrakul

T. Phutrakul

Chief Financial Officer

Date: March 8, 2021

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Risk management at ING Group

ING Group Annual Report 2020 on Form 20-F

142

Risk management

The Covid-19 pandemic and subsequent lockdown measures have

thrown the

world into turmoil. The global economy shrank in 2020 as domestic

demand

and supply, trade

and finance have been severely disrupted. This section

explains ING’s

approach towards risk management and how

this was impacted

by the Covid-19 pandemic.

As a global financial institution with a strong European base, offering banking services, ING is exposed to a variety

of risks. We manage these risks through a comprehensive

risk management framework that integrates

risk

management into daily business activities and strategic planning. This safeguards

ING’s financial strength

and

reputation by promoting the identification, measurement

and control of risks at all levels of the organisation.

Taking measured risks

is core to ING’s business.

The risk management function supports the Executive Board in formulating the risk appetite, strategies,

policies

and limits. It provides review,

oversight and support functions throughout ING on risk-related

items. ING’s main

financial risks exposures are to credit risk (including transfer

risk), market risk (including interest rate,

equity, real

estate, credit spread, and foreign exchange

risks), funding and liquidity risk, and business risk. ING is also exposed

to non-financial risks such as operational,

IT and compliance risks, as well as to model risks. The ING Group chief

risk officer (CRO) is also the CRO of ING Bank.

This section sets out how ING manages its risks on a day-to-day basis. It explains how the risk management

function is embedded within the organisation based on the ‘three lines of defence’ model. It describes the key

risks that arise from ING’s business model and how these are managed by dedicated

risk management

departments, with various specific areas of expertise. The section provides qualitative and quantitative

disclosures about solvency, credit,

market, funding and liquidity,

ESG, business, operational, IT,

compliance and

model risks.

Risk profile

This chart provides high-level information on the risks arising from ING’s

business activities:

Risk profile

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

Risk management at ING Group

ING Group Annual Report 2020 on Form 20-F

143

Top and emerging risks

The risks listed below are defined as existing and emerging risks that may

have a potentially significant impact on

our financial position or our business model. They may have a material impact on the reputation of the company,

introduce volatility in future operational results, or impact ING’s

medium and long-term strategy including the

ability to pay dividends, maintain appropriate levels of capital

or meet liquidity and funding targets. An emerging

risk is defined as a risk that has the potential to have a significant negative

effect on our performance, but whose

impact on the organisation is currently more difficult to assess than other risk factors

that are not identified as

emerging risks.

The topics have emerged as part of the annual risk assessment that is performed as part of the Stress Testing

Framework and the Risk Appetite Framework. The sequence in which the risks are presented

below is not

indicative of their likelihood of occurrence or the potential magnitude of their financial consequences.

The 2020 risk assessment confirmed our top and emerging risks. The top risks in 2020 are related

to financial

crime, cybercrime and a persistent low interest rate

environment.

On top of that, the Covid-19 pandemic

impacted our business environment. Climate change risk remains an important

risk, reflecting the impact that

climate change may have for the financial position and/or

reputation of ING.

Covid-19 pandemic

Covid-19 was declared a global pandemic by the World Health Organization

on 11 March 2020. Various countries

and local governmental authorities across the world have introduced

measures aimed at preventing the further

spread of Covid-19. Read more in ‘The world around us‘.

In addition, governments in various countries have introduced

measures aimed at mitigating the economic

consequences of the outbreak. For example, the Dutch government

has announced economic measures aimed at

protecting jobs, households’ wages and companies, e.g., by way of tax payment

holidays, guarantee schemes and

a compensation scheme for heavily affected sectors

in the economy. These announced measures and any

additional measures, including any payment holidays with respect to mortgages

or other loans, have had and

may continue to have a significant impact on ING’s

customers and other counterparties. Read more in ‘Our

business’, in ‘Credit

risk’ and in Note 51 ‘Capital Management’.

The Covid-19 pandemic has affected all of ING’s

businesses. These effects have included increased volatility,

widening of credit spreads, and credit deterioration of loans to ING’s

customers. The 2020 risk costs were

impacted by a combination of increased collective provisioning reflecting the worsened

macroeconomic

indicators and uncertainty,

higher individual Stage 3 provisions, negative rating

migration and manual overlays to

address the risk on payment holidays and for the delay in observed defaults

as a result of the Government

support measures.

Sectors particularly impacted by the Covid-19 pandemic were Aviation (Transportation

and

Logistics), Hospitality and Leisure (Services and Food, Beverages and Personal Care)

and Non-food retail (Retail).

Increased attention is being paid to our financial risks. This was especially true during the initial phases of the

pandemic, which included high frequency calls between senior management of the bank, as well as with external

stakeholders like

the ECB, to intensely monitor developments relating to

liquidity, market

and credit risks. ING

also performed several types of stress tests and sectoral

reviews to assess the potential impact on its financial

position, which helped ING to get further insights into the potential impact and to define appropriate

mitigating

actions. Read more in ‘Credit risk’,

‘Market risk’ and ‘Funding and Liquidity risk’.

Basis of disclosures (*)

The risk management section contains information relating to

the nature and extent of the risks of

financial instruments as required by International Financial Reporting Standards

(IFRS) 7 'Financial

Instruments: Disclosures'. These disclosures are an integral part of ING Group Consolidated

financial

statements and are indicated by the symbol

(*). Chapters, paragraphs, graphs or tables within the risk

management section that are indicated with this symbol in the respective

headings or table header

are considered to be an integral part of the consolidated

financial statements.

This risk management section also includes additional disclosures beyond those required by IFRS

standards, such as certain legal and regulatory disclosures. Not all information

in this section can be

reconciled back to the primary financial statements and corresponding notes,

as it has been prepared

using risk data that differs to the accounting basis of measurement.

Examples of such differences

include the exclusion of accrued interest and certain costs

and fees from risk data, and timing

differences in exposure values (IFRS 9 models report

expected credit loss on underlying exposures).

Disclosures in accordance with Part Eight of the CRR and CRD IV,

and as required by the supervisory

authority, are published in our ‘Additional

Pillar III Report’, which can be found

on our corporate

website ing.com.

Contents

Part I

Part II

Part III

Additional

information

Financial Statements

Risk management at ING Group

ING Group Annual Report 2020 on Form 20-F

144

ING is monitoring the evolving Covid-19 pandemic carefully to understand the impact on its people and business.

A central ING team has been set up to monitor the situation globally and provide guidance on health and safety

measures, travel advice, and business continuity for our company.

In addition, a situation in which most or some

of ING’s employees continue working

from home may raise operational risks, including with respect to

information security,

data protection, availability of key

systems and infrastructure

integrity. Read

Ing Groep NV 20-F for FY2020

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