Detailed narrative
Capital Allocation Strategy and Target Update
ING outlined its capital allocation priorities, focusing on maintaining attractive shareholder returns through its 50% dividend payout policy, investing in value-accretive growth, and returning excess capital above its new CET1 target. The fully loaded CET1 MDA has risen to around 11.2% from 10.5% in 2020 due to regulatory changes, prompting a revision of the CET1 ratio target to around 13%.
This target provides an 180 basis point buffer above the MDA threshold, deemed appropriate given business resilience and countercyclical buffer impact. Any capital structurally above 13% will be considered excess and factored into future capital planning.
Strong Commercial Momentum and Customer Growth
The company continued to demonstrate robust commercial momentum in Q3, adding nearly 200,000 mobile primary customers, contributing to over EUR 1.1 million growth in the last 12 months, well ahead of the Capital Markets Day target. Customer balances grew at an annualized rate of 7% in the first 9 months of 2025, keeping the company on track to achieve its 4% annual growth target.
This growth is supported by increased activities with customers, including a rise in investment accounts and trading clients.
Fee Income Growth and Outlook Upgrade
Fee income continued its upward trend, growing by 15% year-on-year, with most of this growth being structural. This strong performance led to an upgraded full-year 2025 fee growth outlook of more than 10%. Retail Banking fee growth was supported by the continued rise in mobile primary customers and investment products, while Wholesale Banking achieved a quarterly record fee income of EUR 383 million, driven by strong performance in lending, lead roles, and underwriting activities.
Approximately 75% of fee growth is considered alpha-driven.
Deposit Dynamics and NII Outlook
Core deposits experienced a slight decline of EUR 200 million QoQ, primarily due to EUR 7 billion in outflows from Retail Banking in Germany and Belgium following the conclusion of promotional savings campaigns and seasonal summer spending patterns. Conversely, Wholesale Banking posted strong inflows of EUR 7 billion, particularly in payments, cash management, financial markets, and cash pooling.
Commercial NII rose due to strong performance in Wholesale Banking Lending and the conclusion of a promotional savings campaign in Retail Banking Germany. The full-year 2025 commercial NII is expected to be between EUR 15.2 billion and EUR 15.3 billion.
Digitalization, AI, and Efficiency Initiatives
ING is actively integrating generative AI capabilities across its organization, with a GenAI chatbot live in 6 markets and AI used in consumer finance to assist and automate loan applications. These efforts are part of a broader strategy to digitize services and enhance tech platforms, aiming for operational efficiencies.
The company estimates around 950 positions in the Netherlands could be affected by the end of 2026 due to AI rollout and digitalization, reflecting a global push for efficiency, not limited to the Netherlands.
Risk Costs and Credit Quality
Total risk costs for the quarter were EUR 326 million, equivalent to 19 basis points of average customer lending, which is below the through-the-cycle average and reflects the quality of loan growth. Net additions to Stage 3 provisions amounted to EUR 361 million, mainly due to collective provisioning in Retail Banking and newly defaulted files in Wholesale Banking.
However, these Wholesale Banking defaults were attributed to idiosyncratic events at specific clients rather than systemic observations, with Stage 3 ratio remaining stable. Stage 1 and Stage 2 risk costs showed a net release of EUR 35 million.