• Mobile Primary Business Customers Growth: Increased by 1.1 million in 2024, with 430,000 added in Q4.
• Net Core Lending Growth: Retail Banking grew by EUR26 billion in 2024, with EUR7.2 billion in Q4.
• Net Deposit Growth: Total customer balance growth of 6% in 2024.
• Sustainable Deals Volume: EUR130 billion mobilized in 2024, a 13% increase from 2023.
• Branch Network Rationalization: Reduced to just over 600 globally from almost 800 in 2023.
• Net Interest Income: Supported by volume growth in lending and liabilities.
• Fee Income Growth: Increased by over 11% year-on-year.
• Return on Equity: 13% in 2024.
• Shareholder Yield: Above 15% for the second consecutive year.
• Share Buyback: EUR2 billion ongoing, with an additional EUR500 million cash payment in January.
• Final Cash Dividend: EUR0.71 per share for 2024.
• Netherlands Income: Around EUR5 billion with profit before tax close to EUR3 billion.
• Russia Business Sale Impact: Estimated negative impact of EUR700 million on P&L.
• Core Deposit Growth: Increased by over EUR16 billion in Q4.
• Fee Growth: 14% year-on-year increase.
• Total Expenses: Increased by 4.8% in 2024.
• Risk Cost: EUR299 million in Q4, 18 basis points of average customer lending.
• Core Tier 1 Ratio: Decreased slightly due to higher risk-weighted assets.
• 2025 Outlook: Total income expected to remain strong with 5%-10% fee income growth.

• Warning! GuruFocus has detected 3 Warning Sign with ING.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ING Groep NV (NYSE:ING) achieved outstanding commercial growth in 2024, with a significant increase in mobile primary business customers and a record net core lending growth of EUR26 billion.
• The company reported strong net interest income supported by volume growth in both lending and liabilities, despite margin pressure from decreasing rates.
• Fee income grew by over 11% year-on-year, driven by an increase in the number of clients and diversification of the income base.
• ING Groep NV (NYSE:ING) maintained a strong capital generation, with a return on equity of 13% and a shareholder yield above 15% for the second consecutive year.
• The company made significant progress in sustainability, mobilizing EUR130 billion in sustainable deals, surpassing its previous target for 2025.

Negative Points

• The sale of the onshore business in Russia is expected to have a negative impact of around EUR700 million on the P&L and around 5 basis points on the CET1 ratio.
• The liability margin decreased due to lower replicating income and additional lower margin volumes attracted in Wholesale Banking.
• Total expenses increased by 4.8% in 2024, driven by inflationary pressures on staff expenses and higher VAT following a ruling in the Netherlands.
• Risk costs amounted to EUR299 million in the fourth quarter, with additions to Stage 3 provisions largely due to new and existing files in Wholesale Banking.
• The company faces challenges in maintaining a strong liability NII in a lower rate environment, with expectations of a liability margin around 100 basis points in 2025.

Q & A Highlights

Q: Are you prioritizing share buybacks over M&A opportunities in 2025, and what are your plans for SRTs? A: We are growing at 4% to 5% annually and diversifying our services. We consider both share buybacks and M&A based on long-term ROE value creation. For SRTs, we are taking actions like primary syndication and securitization to optimize capital usage in Wholesale Banking. We expect the first SRT in the second half of this year.

Q: Can you update us on the announced core deposit rate reductions and the situation in the Netherlands? A: Approximately EUR200 billion in core deposits are subject to reductions, with a positive revenue impact of EUR600 million annually. In the Netherlands, 70% of our deposit book has seen pricing actions. We are comfortable with our position and will make further announcements as needed.

Q: What has changed in your cost guidance for 2025 compared to the Capital Markets Day? A: Inflation and collective labor agreements remain sticky in 2025. We are investing in client acquisition and achieving savings, but our guidance for 2027 remains the same, with costs expected to grow between 3% to 4% from 2024 to 2027.

Q: Can you explain the impact of the onshore business exit in Russia and your deposit campaign plans for 2025? A: The onshore business in Russia was mainly operational, with local accounts and payments. We continue to reduce offshore exposure. For deposit campaigns, we seize opportunities to grow our customer base and primary customers, adjusting strategies based on market conditions.

Q: How do you plan to achieve the RWA mix shift and what is your outlook for Belgium's term deposits? A: We are on track to shift the RWA mix to 45% Wholesale and 55% Retail by 2027, using tools like syndication and SRTs. In Belgium, we expect term deposits maturing later this year to move to different price points or normal savings accounts, supported by cross-selling efforts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.