ING Groep NV Form 6-K Summary: Six Months Ended June 30, 2025
Business Context and Reporting Period
This Form 6-K reports the unaudited condensed consolidated interim financial results for ING Groep NV for the six-month period ended June 30, 2025. ING is a global financial institution with a strong European base, offering retail and wholesale banking services. The financial statements are prepared in accordance with IFRS as issued by the International Accounting Standards Board (IFRS-IASB) for SEC reporting, while management monitors performance using IFRS as adopted by the European Union (IFRS-EU). A significant accounting difference exists regarding the "IAS 39 carve-out" for fair value hedge accounting on mortgage and savings portfolios, which is permitted under IFRS-EU but not IFRS-IASB.
Key Financial Metrics
| Metric (EUR million) | 6M 2025 | 6M 2024 | Change |
|---|---|---|---|
| Net Result (IFRS-IASB) | 3,915 | 4,456 | -12% |
| Net Result (IFRS-EU) | 3,130 | 3,358 | -7% |
| Total Income | 11,339 | 11,300 | 0% |
| Net Interest Income | 7,159 | 7,655 | -6% |
| Net Fee & Commission Income | 2,216 | 1,998 | +11% |
| Operating Expenses | 6,234 | 5,880 | +6% |
| Loan Loss Provisions | 612 | 559 | +9% |
| Net Core Lending Growth | 22.2 billion | 12.0 billion | - |
| Net Core Deposits Growth | 28.8 billion | 28.2 billion | - |
| CET1 Ratio | 13.3% | 13.6% | -30 bps |
Material Changes vs. Prior Period
- Profitability Decline: Net result under IFRS-IASB decreased by 12% to EUR 3.9 billion. Under IFRS-EU, the decline was 7% to EUR 3.1 billion. The IFRS-IASB result includes a positive adjustment of EUR 786 million related to the reversal of the EU "IAS 39 carve-out" hedge accounting, compared to EUR 1.1 billion in the prior year.
- Revenue Mix: Total income remained flat. Net interest income fell 6% due to normalizing liability margins, despite higher volumes. Conversely, net fee and commission income rose 11%, driven by strong growth in investment product fees and daily banking fees.
- Expense Pressure: Operating expenses increased 6% year-on-year, reflecting inflationary pressures, investments in business growth, and EUR 120 million in incidental costs (including EUR 85 million for workforce rebalancing in Wholesale Banking).
- Asset Growth: Net core lending grew by EUR 22.2 billion, primarily driven by residential mortgages (EUR 13.2 billion). Net core deposits grew by EUR 28.8 billion, with strong inflows in Germany and the Netherlands.
- Risk Costs: Risk costs remained below the through-the-cycle average at 18 basis points of average customer lending. Stage 3 provisions decreased significantly due to lower inflows and higher recoveries.
Outlook, Risks, and Contingencies
- Geopolitical Risks: Elevated risks persist due to the war in Ukraine, tensions in the Middle East, and US-EU trade policy developments (including a 15% tariff agreement). ING continues to monitor these for potential market volatility and operational impacts.
- Russia Exit: ING has agreed to sell its Russian subsidiary, ING Bank (Eurasia) JSC, to Global Development JSC. The transaction is expected to close in Q3 2025. ING estimates a post-tax negative impact of EUR 0.8 billion upon disposal, including a book loss of EUR 0.5 billion. No loss has been recognized yet due to regulatory approval uncertainties.
- Legal Proceedings: Significant ongoing litigation includes investor claims in the Netherlands regarding historic financial economic crime policies (EUR 587 million claimed), mortgage expense claims in Spain, and Swiss franc mortgage disputes in Poland. ING disputes the investor claims and maintains provisions where appropriate.
- Capital Management: The CET1 ratio decreased to 13.3% from 13.6%, partly due to a EUR 2 billion share buyback program. The bank maintains a target CET1 ratio of around 12.5% and a distribution policy of a 50% payout ratio on resilient net profit.
- Climate Litigation: Legal proceedings were initiated in March 2025 by Friends of the Earth Netherlands alleging contribution to climate change. ING intends to defend its science-based climate approach.
Key Facts for Investor Verification
- Accounting Standards: Verify the distinction between IFRS-EU (management view) and IFRS-IASB (SEC filing) results, specifically the EUR 786 million positive adjustment in 2025 related to hedge accounting carve-outs.
- Russia Disposal: Monitor the closing of the ING Bank (Eurasia) JSC sale in Q3 2025 and the realization of the estimated EUR 0.8 billion post-tax loss.
- Legal Provisions: Track the outcome of the Dutch investor litigation (EUR 587 million claim) and the Polish Supreme Court/CJEU rulings on Swiss franc mortgages, which could impact future provisions.
- Margin Trends: Assess the sustainability of fee income growth (up 11%) against the backdrop of normalizing net interest margins (down 6%).
- Capital Position: Confirm the CET1 ratio remains above the 12.5% target and the 10.74% regulatory requirement amidst ongoing share buybacks.