ingbank-2022-12-31-en

The world around us

Despite the initial threat posed by the omicron variant of Covid-19, the

world economy started 2022 with a strong economic recovery to the

point where many advanced economies returned to levels of output

seen prior to the pandemic. This was mainly driven by catch-up

demand for consumer services as households spent more on leisure in

the first quarters of reopening. In some cases, like the Netherlands, the

pre-pandemic level of GDP was quickly surpassed.

With economies reopening, a surge in economic activity in the first half of the year was met by high

inflation rates, mainly related to the energy crisis. The war in Ukraine and related energy crisis was the most

dominant factor in the global economy in 2022. It pushed up inflation dramatically in Europe, to levels not

seen for decades. It has also added to shortages that were already plaguing the European economy.

This caused pain among businesses and consumers alike and rapidly slowed the eurozone to stagnation,

bordering on recession. The US also battled a surge in prices and China continued to struggle economically

due to the continued impact of Covid-related lockdowns and a struggling real estate sector. The UK battled

financial instability after the Truss Government's mini-budget and the budget cuts announced afterwards.

High inflation also prompted a strong response from central banks worldwide. The Fed led the global interest

rate hike cycle, but the ECB also made quick moves towards normalisation of interest rate policy. Ending net

purchases in the ECB’s Pandemic Emergency Purchase Programme and Asset Purchase Programme was

followed by rapid rate hikes over the course of the second half of 2022, which turned into the most

aggressive hike cycle ever by the ECB. This had a marked impact on the financing environment globally with

investment appetite slowing for both households and corporates.

Climate change risk

ING is aware of the risks associated with climate change and how these can impact customers and their

financial health. This includes physical risk and transition risk. Physical risk can be acute, such as flood and

wildfires, or chronic, such as increased temperature and rising sea levels. Transition risk can be driven by

policy, technological or market changes as we shift towards a low-carbon global economy and potentially

lead to stranded assets.

Financial crime risk

We’re committed to fulfilling our role as a gatekeeper to the financial system, to protect customers, society

and our bank from the corrosive effects of financial crimes such as money laundering, terrorist financing,

bribery and corruption, sanctions evasion and tax offences. It’s our intention to not just comply with

applicable laws and regulations in relation to financial crime, but also to continue to strengthen our financial

crime control framework in a robust and sustainable way to prevent, detect and respond to illicit activity.

We continue to seek to harness new and innovative technological capabilities to create a safer environment

for customers, our bank and society. In 2022, we further adjusted our financial crime risk appetite and

framework of policies and procedures to reflect changes in the risk environment and responded to external

developments.

We also sought to further empower our people with the skills and knowledge to fight financial crime, sharing

insights with them about emerging and evolving threats (including in relation to financial crime risks linked

to or heightened by the Covid-19 pandemic) and enhancing our training framework.

Fighting financial crime and protecting the integrity of the financial system is a challenge for all banks, given

the constantly changing environment and pace at which criminals evolve their methods. We believe we can

be more effective in our efforts if we collectively join forces and share intelligence with other banks and with

national, European and international authorities and law enforcement to combat financial crime. We

therefore continue to proactively participate in public-private partnerships, such as Transaction Monitoring

Netherlands and Germany’s Anti-Financial Crime Alliance, and to collaborate with other banks. Read more in

‘How we are making the difference’ and ‘Compliance risk’.

Cybercrime

Cybercrime remains a continuous threat to companies in general and to financial institutions in particular.

Both the frequency and the intensity of attacks are increasing on a global scale. The sophistication and

implications of ransomware attacks are growing concerns.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> The world around us

ING Bank Annual Report 20224

Continuous enhancement of the control environment, to protect from and detect and respond to e-banking

fraud, distributed denial of service (DDoS), targeted attacks and more specific ransomware attacks remains

one of the highest priorities. Additional controls continue to be embedded in the organisation as part of the

overall internal control framework and are continuously re-assessed against existing and new threats. In

addition, ING continues to strengthen its global cybercrime and fraud resilience through extensive

collaboration across the globe with financial industry peers, law enforcement authorities, government (e.g.

National Cybersecurity Centre) and Internet Service Providers (ISPs). See also ‘How we are making the

difference’ and ‘Non-financial risk’.

Inflation risk

Inflation rates accelerated across the globe at the beginning of 2022, fuelled by the war in Ukraine.

Inflationary pressure prompted an adjustment in monetary policy by major central banks and lead to rising

interest rates and tighter global financial conditions.

The mix of high inflation and rising interest rates further deteriorated macro-financial conditions,

aggravating pre-existing vulnerabilities for both businesses and households, which were recovering from the

economic consequences of the Covid-19 pandemic, and ultimately increasing banks’ credit risk. Against this

background while ING took additional provisions throughout 2022, it also benefited from the significantly

higher interest rates.

EU member-state governments introduced several supporting measures to cushion the rise in energy prices

and inflation. These measures, in conjunction with the reduced fiscal space resulting from pandemic-related

support measures and the normalisation of the monetary policy stance, increased sovereign vulnerabilities

in financially weaker countries.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> The world around us

ING Bank Annual Report 20225

Our strategy

ING’s purpose is to empower people to stay a step ahead in life and in

business. Our updated strategy, introduced in 2022, is built around this

purpose and making the difference for people and the planet. In a world

that’s constantly changing, we’re digital and sustainability pioneers,

adept at adapting to the trends impacting our business.

Our two overarching priorities are giving customers a superior customer experience (CX) and putting

sustainability at the heart of what we do.

We also have four enabling priorities:

1. Providing seamless, digital services.

2. Using our scalable technology and operations.

3. Staying safe and secure.

4. Unlocking our people's full potential.

Giving customers a superior experience

We want to put customers at the centre, providing them with the superior experience that is our true source

of differentiation. We believe that banking is a secondary need, and that financial products and services, for

the most part, are commoditised. A superior customer experience is how we can stand out from the crowd.

The rapid digitalisation of society has huge impact on what customers expect from us. They don’t just

expect an experience that is digital and seamless, they expect a specific level and quality of experience. A

digitally-enabled personal, easy, relevant and instant experience is now the base expectation of all

customers, but we also realise that different types of customers have different needs and different ways of

interacting with us.

Putting sustainability at the heart of what we do

We have a responsibility to society to define new ways of doing business that align with economic growth

and social impact. Climate change is one of the world’s biggest challenges, threatening both our planet and

its people, many of whom also struggle with inequality, poor financial health and even a lack of basic

human rights. We’re determined to be a banking leader in building a sustainable future for customers,

society and the environment. We want to lead by example by striving for net zero in our own operations.

We also want to play our part in the low-carbon transformation that's necessary to achieve a sustainable

future, aiming to steer our financing towards meeting global climate goals and working with clients to

achieve their own sustainability goals. For more information go to our 'Sustainability at the heart' chapter.

Our enablers

Providing seamless, digital services

We know that we can make customers happy with robust, 'always-on' channels, data-enabled personalised

experiences and digitalisation of processes with limited human intervention there where needed.

Using scalable technology and operations

A technology and operations foundation that is modular and scalable brings many benefits, including

superior customer experience and safety, speeding up time-to-volume, shortening time-to-market, and

lowering cost-to-serve.

Staying safe and secure

Trust is the starting point, the most basic requirement, for all stakeholders. That’s especially true for a

digital-first bank like ING. People trust us with their money and with their data. Keeping it safe, and

maintaining this trust are crucial.

Unlocking our people's full potential

We want all employees to have skills and capabilities that equip them for the future. We also want to

provide them with an excellent employee experience and promote a diverse, inclusive and vital culture

where everyone feels they belong.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our strategy

ING Bank Annual Report 20226

Superior customer experience

Customers expect an experience that’s personal, easy, relevant and

instant. What this looks like depends, of course, on the type of

customer. For individual customers and small businesses our emphasis

is predominantly on mobile banking, while for mid-corporate and

Wholesale Banking clients it’s all about personal relationships and

superior sector and network expertise supported by seamless digital

delivery.

As an organisation we need to be customer focused – after all, customers are who we’re here for, our

reason for being. And if we want customers to choose us for more of their banking needs, to become

primary customers, we need to nurture relationships with them so that they choose ING before any other.

At every step of their ING journey, customers should feel an emotional connection with us: that’s how we

win customers’ hearts and their business. Banking is a relationship just like any other, and the best

relationships are those in which people feel valued, confident, empowered and in control. In response to

customers’ changing expectations in today’s always-on digital society, we’ve updated our customer

experience principles. We want to provide customers with an experience that is personal, easy, relevant and

instant.

Personal is about recognising customers as individuals and getting to know their needs, goals and

challenges so they feel valued. For example, we should not ask for information twice when we interact with

them, and we tailor messaging to their specific situation.

Easy is about taking the complexity out of banking, making it intuitive, transparent and understandable so

customers feel confident. For example, we aim to clearly price products and services, we avoid complicated

jargon and we’re always accessible.

Relevant is about bringing value to customers, anticipating their needs and proactively providing the right

insights, advice and solutions at the right time, making them feel empowered. For example, guiding them

on difficult financial decisions, like re-financing a mortgage in an environment of rapidly increasing interest

rates.

Instant is about having solutions at their fingertips that put the customer in the driver’s seat of their

finances and making them feel in control by allowing them, for instance, to switch seamlessly between self-

service banking on the app and personal advice in a branch. Different groups of customers have different

requirements. For Retail Banking and some Business Banking customers (i.e. consumers, the self-employed

and small and medium-sized enterprises), the emphasis is on mobile, for both products and services. For

Wholesale Banking (corporate clients) and Business Banking mid-corporates, the emphasis remains on

deepening client relationships, with superior sector knowledge and networking expertise, relevant advice

and tailored products, all supported by seamless digital delivery and services.

CX Day

On 15 November, ING held a global CX Day, with over 5,500 colleagues from across the bank joining

together to come up with ways to make customer experiences personal, easy, relevant and instant. The

event attracted employees from Retail Banking, Business Banking, Wholesale Banking and the support

functions in 11 countries. Together, they identified over 1,000 improvements to delight our customers.

Some of those improvements were implemented live on the day.

Retail Banking

For customers using Retail Banking products and services, ING wants to provide a seamless digital, mobile-

first experience that’s personal, easy, instant and relevant. We want to engage with our customers on

mobile at every stage of their journey and provide more personalised products and services based on data-

driven, relevant insights. Seamless end-to-end digital delivery of customer services is a an enabler for a

superior customer experience to earn, and keep, the primary relationship.

Earning ‘primary relationships’ with customers is an important driver for profitable growth. It leads to deeper

relationships, greater customer satisfaction and ultimately customers choosing us for more of their banking

needs. We want to be our customers’ first partner for their financial business. In Retail Banking, primary

customers have at least two active ING products. One of these should be a current account into which they

deposit regular income.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Superior customer experience

ING Bank Annual Report 20227

Mobile-first

Reflecting customer demand, we are continuously improving our mobile capabilities. In 2022, over 58

percent of customers used mobile banking only (mobile device log in through the app or mobile device log in

through the website) compared to 51 percent in 2021. High adoption of mobile banking is especially visible

in Turkey (88 percent), Romania (74 percent), Spain (63 percent) and in the Netherlands (61 percent).

In the Netherlands, we increased our reach for iOS and Android users to 70 percent with a new method to

fully onboard new customers via their mobile phone. The process takes about 10 minutes and customers

can immediately start using the account afterwards. Our reach extends to all customers that can use

mobile onboarding, i.e. customers with a Dutch passport, ID card or residence permit, those from other

European Economic Area countries and refugees from Ukraine.

Visa Mobile is a new online payment method available for retail customers in Poland. Visa contactless and

prepaid virtual card users may activate Visa Mobile in their ING mobile app. Customers can pay with their

card without using the card's data, by entering the recipient's phone number and confirming payment in

their ING mobile app. Payment is fast and secure. In Romania, ING became the first bank to digitalise the

mortgage journey, launching 100 percent online financial pre-approval, directly from Romania’s internet

banking platform. Customers interested in a mortgage loan are able to find out the exact amount they can

borrow without having to go to the bank.

At Interhyp, our online mortgage broker in Germany, the HOME platform digitalises the mortgage process

for home buyers, advisors, brokers and bank partners. Interhyp customers can connect directly to real-

estate portals, create financing scenarios and upload documents from their smartphones, speeding up the

mortgage decision process. In Spain, we launched instant lending for customers that are new to the bank.

This new service uses instant and automatic processes that provide a differentiated, quick and convenient

lending solution.

Daily banking and savings

Everyday Roundup is a digital product that aims to make saving simpler at a time when customers may be

financially vulnerable (due to the cost-of-living crisis). It is used by over 1.1 million customers in six countries

(Poland, Australia, Germany, Romania, Turkey and, since 2022, Spain). It works by rounding up every

transaction on a customer’s current account and automatically transferring the difference to their savings

account. ING in Australia, Germany and Turkey also have a round-up option for donations to charities.

Similarly, Australia has a round-up option for mortgages, while Spain has a round-up option for investments.

Dealwise, a smart shopping platform (accessible in the banking app), is another initiative that encourages

customers to save on their daily spending. It gives users access to discounts and cashback offers from

participating merchants. Dealwise is available to customers in Romania, Germany and Belgium. Additionally,

in Spain, we updated our daily banking proposition, including the launch of a new, commitment-free

account, that aims to increase new-to-bank customers, has a fully online and instant onboarding process,

and has new services like e-commerce insurance and a subscriptions manager.

Remote advice

More customers are using remote video advice and digital self-service channels. We can connect with

customers across multiple channels through ING’s cloud-based customer interaction platform for phone,

chat and video contacts. Our global customer interaction platform is used in seven countries to harmonise

the experience and ensure customers receive the same services everywhere. Compared to last year, we

doubled the number of remote advice video meetings and witnessed a rise in customers using the chat

function on our websites and mobile apps while realising a reduction in branch traffic. As we continue to

optimise our assisted channels, we are also reducing the number of ING branches, with 94 branches closed

in 2022.

Investment products

ING customers have access to smart digital investment tools like My Money Coach in Italy, Naranja+ in

Spain, Easy Invest in the Netherlands, Komfort-Anlage (Comfort Investing) in Germany and ING Self Invest in

Belgium.

Insurance

ING has teamed up with insurance partners in various Retail Banking markets to offer customers insurance

products via the ING app or website, based on the local needs within those markets. We offer insurance

linked to loans as well as a range of standalone non-life insurance policies. In the Netherlands, we set-up a

new distribution partnership with Dutch health insurer CZ. In Romania, we launched salary protection

insurance offering customers financial support in case of job loss, prolonged medical leave or permanent

invalidity. In Turkey, we introduced digital assistance for insurance and pension products, which led to one

of the very first digital remote offers for pensions in the Turkish market. During 2022, we also set up new

offers linked to our daily banking activities, including group travel insurance in Romania and online purchase

and cash withdrawal protection in Poland.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Superior customer experience

ING Bank Annual Report 20228

Measuring Retail Banking NPS

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) compared to selected

peers in each market. The score is calculated as the difference between the percentage of promoters (who

rate ING as 9 or 10 out of 10) and detractors (those scoring ING below 6). Our peers have been selected

based on qualitative and quantitative criteria like size, brand strength, types of clients served and types of

products and services. The yearly NPS score is an average of reported four quarter figures, based on a six

months’ rolling average. In 2022, ING enhanced its methodology from an average of two quarters to a six

months’ rolling average. The updated methodology concerns a refinement and does not significantly

impact the NPS score and ING’s ranking for 2021 and 2022. Our aim is to achieve a number one NPS ranking

in all our Retail markets, with a 10-point lead over our main competitors. In 2022, ING ranked number one in

five of 10 Retail markets. In these five markets, we have a 10-point lead on the nearest competitor. In

Germany and Spain, ING’s scoring improved on last year while Australia, Poland and Romania maintained

their strong scores. ING ranks in the top-three in another four markets: the Netherlands and Luxembourg

(ranked second) and Italy and Turkey (ranked third).

Closing of Retail businesses

In 2022, ING took the decision to close its Retail Banking operations in the Philippines. We concluded that the

time to achieve the desired scale was too long and we decided to concentrate on our core markets. ING

started its Retail Banking operations in late 2018 and retains a Shared Service Hub and Wholesale Banking

presence in the country. In 2021, ING announced it would leave the Retail Banking market in France

following a strategic review. In 2022, ING and Boursorama (a subsidiary of Société Générale) signed an

agreement to offer services to ING customers in France. The contract allowed ING customers to join

Boursorama and benefit from a simplified account opening process and exclusive offers. The agreement

also includes the transfer to Boursorama of ‘assurance-vie’ (investment products) contracts, for which ING

acts as a broker with Generali Vie. Home loans and consumer loans were not included in the agreement.

Business Banking

Business Banking is set up as a third pillar within ING and is a part of Retail Banking. While definitions can

differ slightly per country, we’ve defined three customer segments using the following global framework:

Self-employed and micro companies: Independent professionals or small companies that employ up to 10

people and have a turnover up to one million euros.

SMEs: Small to medium-sized companies that employ between 10 and 250 people and have a turnover

between one and 10 million euros.

Mid-corporates: Sophisticated larger companies employing more than 250 employees with a turnover of

between 10 million and 250 million euros.

Business Banking serves 1.7 million customers and generates €3 billion in revenue across seven markets: the

Netherlands, Belgium, Luxembourg, Poland, Romania, Turkey and Germany. Customers want to manage

and grow their businesses in a constantly changing and increasingly complex world. Our aim is to empower

them by providing all their financial solutions in one place and offering the right insights, products and

services at the right time, to create an personal, easy, relevant and instant experience.

We apply a needs-based customer segmentation approach that differentiates between basic and more

complex (specific) needs. This enables customers to 'self-serve' using our strong digital foundation, but also

access remote and face-to-face advice, when needed. With digitalisation at the core of our strategy and to

meet increased demand for digital solutions and self-service, our ambition is to serve over 80 percent of

SMEs digitally. We focus our efforts on the most important interactions: KYC outreach for customer due

diligence, onboarding, account opening and loan or card requests.

For example, in Germany, we launched our second lending product, Flexkredit, where Amazon sellers can

easily make their loan application from the Amazon Marketplace seller portal (Seller Central). The

disbursement and management of the product is via their online banking, Business Banking Home. If

eligible, an offer is available within 48 hours. In Belgium, we offer customers, based on their financial

situation, instant business credit within minutes, which is available the next working day. We inform them

about this offer in our mobile banking app and on internet banking, including personalised eligibility and

maximum credit availability details. For Polish customers, we have created a product offer page within their

online banking listing products and services tailored to individual customer needs. Product

recommendations for each customer can be directly acquired online.

As well as providing improved customer experiences through digitalisation and personalisation, we are

putting sustainability at the heart of what we do with our efforts on climate action and financial health. We

help customers to future-proof their businesses by offering sustainable financing alternatives. For example,

we offer sustainable finance alternatives (loans and/or lease) for SMEs and mid-corporates in most Business

Banking countries where we operate (the Netherlands, Belgium, Poland, Romania, Turkey and Luxembourg).

Wholesale Banking

In Wholesale Banking, we aim to empower clients by partnering with them to offer relevant financial

solutions to their business needs across their value chains, and to support them through the 'ING difference',

three major characteristics that offer particular value to clients:

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Superior customer experience

ING Bank Annual Report 20229

1.Our global reach, with local experts: no matter where clients are, our network of experts offer them a

seamless local experience with a global view.

2.We’re sector experts: clients trust us to provide tailored solutions to meet their needs.

3.We’re sustainability pioneers: we’re not just leaders in sustainable finance, we work hand-in-hand with

clients to address some of the most pressing issues in the world today.

We're driving growth by making the most of our strengths and broadening our value proposition to clients,

while optimising our use of capital and enhancing financial performance. This is highlighted in deals such as

that with GlobalConnect, a Nordic technology media and telecom (TMT) company. After ING co-advised on a

sustainability-linked loan structure in 2021, GlobalConnect enhanced its sustainability strategy on ING’s

recommendations and ING ultimately supported them by securing the sole sustainability coordinator role

on both their €2.7 billion existing and €1 billion incremental financing rounds. The ING difference is reflected

in partnership initiatives such as leveraging ING’s sector knowledge to lead a working group to design a

climate-aligned finance agreement for steel. In 2022, we were proud to be one of six banks to sign up to the

Sustainable STEEL Principles, which aims to help banks measure and report emissions associated with their

steel loan portfolios compared to net-zero emissions pathways. Read more in the 'Sustainability at the

heart' chapter.

In 2022, at the Global Finance magazine Sustainable Finance Awards ING won the global award for

Outstanding Leadership in Sustainable Bonds for the second year running and the Sustainable Project

Finance award for Western Europe. Our client segmentation model aligns our strengths with client needs

and is an important element for deepening relationships. ING’s way of working allows us to respond rapidly

to our clients’ changing needs and to close the gap between local and global specialists, making an impact

in our markets.

During the year, we continued to combine our sector knowledge and financial expertise to support

companies with tailored advisory and daily banking, in line with the client segmentation model. We aim to

provide relevant advice, data-driven insights and customised, integrated solutions that make our clients

day-to-day banking more efficient and support their business ambitions. Corporate clients also benefit from

gains in speed, transparency, security and efficiency created by technologies such as blockchain and

artificial intelligence.

Measuring Wholesale Banking NPS

A relationship NPS programme ran in 32 WB markets throughout 2022, it concerns a qualitative measure of

the client experience and the quality of the relationship and how likely clients are to recommend ING. The

score is calculated as the difference between the percentage of promoters (who rate ING as 9 or 10 out of

10) and detractors (those scoring ING below 6). In 2022, ING’s relationship NPS score rose to an all-time high

of 67 (on a scale of -100 to +100), from +59 in 2021, an increase of 13.5%. Increases were prevalent in most

of the sectors and regions. The response rate increased to 71% from 62%.

Finding new ways to help customers stay a step ahead

ING has always prided itself on its innovative culture and considers this an important contributor to a

superior customer experience. To keep surprising customers in a fast-moving competitive environment, we

need to keep finding fresh ways to translate emerging trends and technologies into new business

opportunities. In 2022, we announced a move to bring innovation closer to our Retail, Business Banking and

Wholesale Banking business lines to create more impact for our innovation efforts. For incremental-type

innovations that support our strategic priorities of CX and sustainability, such as digitalising processes, we

believe this is better done within individual business lines where we are closer to the customer. Innovation

projects like CoorpID and Blacksmith, for instance, continue under Wholesale Banking's leadership.

In 2022, ING invested and partnered financial technology (fintech) companies via its venture capital arm,

ING Ventures. One such investment was in SeMI Technologies, offering AI-powered search engine software

to companies who want to make better use of their data. Other investments include Vault (cloud-based core

banking technology), OpenFin (unified workspace solution for financial institutions) and Sardine (safer, faster

payments). ING in Belgium also collaborated with Flowcast, an early warning system to predict when retail

customers might go into financial distress.

ING announced in 2022 that it would phase out Yolt's business-to-business open banking operations

following an evaluation that it was not feasible to achieve the preferred scale in their market within a

reasonable time frame. The announcement followed the closure in 2021 of Yolt's personal finance

management app. The phase-out process is expected to be completed in 2023.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Superior customer experience

ING Bank Annual Report 202210

Sustainability at the heart

Sustainability is at the heart of what we do because we believe we have

a role in defining new ways of doing business that aligns economic

growth with positive social and environmental impact. This includes

aiming to bring our own operations in line with a low-carbon future and

respecting and advancing human rights. As a global bank we can also

have a positive impact, not just by mitigating harm, but by bringing

aspects of climate change, biodiversity and human rights into our

financing decisions and client dialogues.

ING takes a holistic approach to sustainability, with climate change mitigation, climate adaptation, climate

and environmental risk, biodiversity, human rights, financial health, business ethics and other ESG issues all

in scope.

As well as aiming to be a pioneer in defining new ways of doing business, ING wants to be a leader in

building a sustainable future for customers, the environment and our company. How? By focusing on:

Climate action: We lead by example by striving for net zero in our own operations.

Collaboration: We work with clients to achieve their own sustainability goals, increasing our impact through

partnerships and coalition-building.

Managing climate-related, environmental and social risk: We manage the most relevant environmental

and social risks while fostering the protection of biodiversity and human rights across all of our relationships.

Financial health and inclusion: We’re working to advance financial health and inclusion for customers and

communities.

Empowering colleagues: We empower colleagues to contribute to it all. ING's sustainability efforts were

recognised externally. In 2022, Sustainalytics assessed our management of environmental, social and

governance (ESG) material risk again as 'strong' while investment research firm MSCI awarded ING an AA

ESG rating for the third consecutive year. S&P rated our ESG practices for the second year in a row as

'strong'.

While we are committed to doing our part, we know that the world's problems cannot be solved by one

sector, much less by one bank. We look to governments, for example, to direct and guide the change

needed to reach net zero by 2050. We believe that an inclusive approach is the only way we can make any

meaningful positive impact. From climate to human rights and financial health, we seek to increase our

impact through partnerships and coalition-building.

Climate action

We have defined four climate action objectives: to reach net zero in our own operations, to steer the most

carbon-intensive parts of our portfolio towards net zero by 2050 or sooner, to finance and advise specific

clients in line with a net-zero economy and to manage climate and environmental risks. In 2022, we

published our second integrated climate report, which can be found on ing.com. We have now published

four overall climate reports.

Aiming for net zero in our own operations

We aim to bring our business in line with the net-zero economy of the future and use our Environmental

Programme to steer our progress towards this. Adjusting to the post-pandemic ‘new normal’, we have set a

new mid-term target for 2025 to reduce our CO2e emissions by 75 percent compared to our 2014 baseline,

for emissions from scope 1, scope 2, and business travel scope 3. In 2022, we reduced emissions by 72

percent from 2014, to 29 kilotonnes – 28 percent of where we were in 2014. In 2021 the figure was 26

kilotonnes where our operations were heavily impacted by Covid-19-related restrictions.

Following migration to a new data platform, we conducted a historical review of our carbon-related data. In

doing so, we made corrections to previously reported datapoints, corrected our coverage statistics for

extrapolation where those were incorrectly applied, and improved our methodology by applying more

granular emission factors for our use of district heating. Comparative figures and baseline year data were

updated to reflect these improvements. Read more in the technical appendix to this report.

We previously shared a scope 1 and scope 2 mid-term target of a 90 percent reduction by 2030. We plan to

review this and publish a combined 2030 target for scope 1, scope 2 and scope 3 for business travel. Scope 1

covers our direct, controlled emissions from natural gas and heating oils, scope 2 covers our indirect

emissions from the generation of purchased energy i.e. electricity and district heating, and scope 3

currently covers emissions in our value chain from business travel (air and car). We intend to review our

scope 3 reporting to include new emission categories. As we conduct the review, we will likely set a new

baseline year for our reporting.

ING buildings

For building emissions, we are committed to improving energy efficiency and reducing our emissions from

heating systems. In 2022, we completed a net-zero assessment on major buildings, which will form the

basis of our approach going forward.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Sustainability at the heart

ING Bank Annual Report 202211

Since 2014, ING has increased the percentage of renewable electricity sourced for our operations. In 2022,

we further aligned with the reporting guidance of the RE100, a technical group that sets industry standards

around corporate use of renewable electricity. We assessed that our renewable electricity sourcing in 2022

was 99.2 percent aligned with RE100's market boundary criteria. The remaining 0.8 percent was not in

alignment due to difficulties in purchasing renewable electricity in Russia, Ukraine, South Korea and

Kazakhstan. For these markets, in addition to reporting CO2 emissions for electricity used, we sourced

renewable Energy Attribute Certificates in neighbouring markets to support an in-sector reduction in line

with the amount of electricity used. In 2020, 99.7 percent was aligned with the RE100 market boundary

criteria; in 2021 that was 99.2 percent. We acknowledge that over time we should move towards more on-

site renewables and direct purchasing agreements from local renewable projects. Read more about our

renewable electricity sourcing types in the technical appendix to this report.

The Environmental Programme also covers targets to reduce our water consumption and residual waste. In

2022, we decreased our residual waste by 48 percent compared to 2014. In 2022, we decreased our water

consumption by 49 percent compared to 2014.

Business travel

In 2022 we launched a Green Travel Budget Programme to make employees aware of the CO2e impact of

their travel choices and encourage them to find greener options. We also updated global travel procedures

to restrict most air travel on short-haul distances where high-speed rail options exist as alternatives. This

includes travel between Amsterdam, Brussels, London and Frankfurt.

Next to efforts to reduce air travel, in 2022 we also started procuring sustainable aviation fuel (SAF) and SAF

certificates from our partners at Air France-KLM, Lufthansa Group, Neste and SkyNRG. Although we still

report the emissions resulting from our flights the SAF and SAF certificates we purchased supported an in-

sector reduction of approximately 3.2 kilotonnes of CO2e emissions. In addition, we entered into a

partnership with Singapore Airlines as part of our sourcing approach for 2023.

To limit the impact of car travel, we continued to electrify our fleet of leased cars. In 2022, ING in Belgium

and the Netherlands announced that only fully electric vehicles (EVs) would be available in its range of new

lease cars. Together, Belgium and the Netherlands represent 72 percent of our lease cars. Globally, we have

an ambition to reach at least 90 percent EVs in our fleet by 2030. This ambition requires countries like the

Netherlands and Belgium to reach 100 percent earlier, while accounting for EV infrastructure challenges in

other countries.

Empowering clients on their road to net zero

In line with our objective to steer the most carbon-intensive parts of our portfolio towards net zero by 2050

or sooner, through our Terra approach, in 2021 we joined the Net-Zero Banking Alliance. This allows us to

use our experience and knowledge to help standardise the way banks measure their alignment with climate

goals and to base our approach on the most recent developments in each sector. We are convinced that all

banks benefit from having an industry-wide standard for measuring the effectiveness and impact of their

efforts as well as increasing transparency. We continue to collaborate with others to develop roadmaps and

methodologies, including for hard-to-abate sectors.

Supporting the energy transition

While we engage with different stakeholders in our ambition to help create a low-carbon society, we believe

that financial support for the energy transition could play the largest part in realising this ambition. Today,

around 80 percent of the global energy mix is fossil-fuel based. Reducing that figure is vital in reaching

society's net-zero emissions targets. Our approach to financing the energy sector balances three main

societal interests: the need to decarbonise to fight climate change, the need for energy to remain accessible

and affordable for people and companies, and the need for security of the energy supply.

Ultimately, building enough new renewable and low-carbon sources of energy will remove the need for

fossil fuels and ING strongly supports the objective of this transition. However, fossil fuels currently play an

important role in the global energy mix, considering the current availability of renewable and low-carbon

sources, and the need to fulfil other, social, sustainable development goals. The global economy’s reliance

on fossil fuels, in particular a phase-out of coal for power generation, must reduce to significantly lower

levels over the next 10 to 15 years, according to the energy transition pathway set out in the International

Energy Agency’s Net-Zero Emissions by 2050 (NZE 2050) Scenario.

In recent years, ING has stepped up its support for the energy transition to a low-carbon economy. In 2017,

ING set a goal to restrict our financing of coal-fired power generation to close to zero by 2025. So far, we

have decreased lending to individual coal-fired power plants by over 80 percent to €83 million.

With our commitment to develop the Terra approach in 2018, ING set out to develop methodologies and

science-based targets to enable steering of the most emissions-intensive parts of our loan book in line with

the emissions levels required to meet the Paris Agreement goals. Methodologies and targets for power

generation and upstream oil and gas portfolio alignment were set out in the 2019 and 2020 Terra progress

reports respectively. ING’s 2022 Climate Report shows how interim and long-term targets for these activities

are benchmarked against sector-specific indicators set out in the NZE 2050 Scenario, and the

outperformance to date in steering our energy sector lending portfolio in line with the global energy mix

required to hold the global average temperature increase to below 1.5˚C by 2050.

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Next to our Terra approach, which lays out transition plans for the nine sectors we believe to have the most

impact, we reinforced our commitments to supporting the energy transition in March, when we announced

we would step up our renewables energy financing efforts. Our announcement included the aim of growing

new commitments in this area by 50 percent by the end of 2025 for Wholesale Banking clients, compared to

the baseline year of 2021. We also committed to end the provision of dedicated upstream finance to new oil

and gas fields approved for development after 31 December 2021.

Our power generation portfolio follows the North American Industry Classification System (NAICS), which

links power generation to the categories shown below. All relevant NAICS codes have been selected to derive

the O/S (outstandings) per category.

Phasing out coal, reducing oil and gas combustion and increasing renewable and low-carbon energy

sources will not on their own solve the challenge of achieving a net-zero emissions world by 2050.

Recognising that technology and new market developments are essential drivers of the energy transition,

ING has established cross-sector and multi-disciplinary centres of expertise to support client investment in

new energy systems. One important area is batteries, which address the inherent intermittency of

renewable energy resources like wind and solar, as well as providing grid stabilisation services. We are also

looking at other energy storage mediums like hydrogen, which have additional applications such as

alternative fuel for transport and for energy-intensive industry. Finally, we are closely following the

evolution of large-scale carbon-capture utilisation and storage (CCUS) which will be essential where fossil

fuels are required in industrial processes that are needed for the global economy and for which there is

currently no alternative.

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Terra approach

We use our Terra approach to steer the most carbon-intensive parts of our loan book towards net zero by

2050. These are power generation, upstream oil and gas, automotive, shipping, aviation, steel, cement,

residential mortgages and commercial real estate. Within Terra, we apply what we consider to be the best-

fit methodology per sector, (our 'toolbox approach'), to measure and steer our loan book.

In 2022, to promote immediate action towards decarbonisation and to adhere to our Net-Zero Banking

Alliance commitment, we set intermediate 2030 targets for all Terra sectors. Of the nine intermediate

targets, eight are aligned with net-zero scenarios. A net-zero target for shipping will be set as soon as one is

adopted under the Poseidon Principles, a financial industry framework for assessing climate alignment for

the shipping sector. At the end of 2021, five of the nine sectors were on track with their respective climate-

alignment pathways: power generation, upstream oil and gas, commercial real estate, automotive, and

shipping. Two sectors, cement and residential real estate, were within five percent of their pathway, while

steel was just above five percent of its pathway. Aviation came out well above the pathway due to the

extraordinary impact that Covid-19 had on the sector, although it is beginning to trend back to its

decarbonisation pathway as the sector recovers. Our 2023 Climate Report will include updated performance

figures.

In 2022, building on other sector-specific working groups like the Poseidon Principles, ING launched the

Sustainable STEEL Principles, a solution for measuring and disclosing the 1.5 degree alignment of steel

lending portfolios. This was developed with other banks and facilitated by the Rocky Mountain Institute’s

Center for Climate-Aligned Finance. The sector emits roughly seven percent of global CO2 emissions and is

heavily dependent on coal. Chaired by ING, the principles provide a pathway to net-zero steelmaking by

2050 and have been incorporated into our Terra approach. ING started a similar initiative in the aluminium

sector.

Detailed information on ING’s transition plans are available in our integrated climate report on ing.com.

The process for reporting on Terra consists of several steps, most of them carried out by ING’s Global

Sustainability department in collaboration with colleagues in the front office. Internal data relating to our

portfolio composition is made available soon after ING’s year-end close in February. External data relating to

climate performances is collected in or around April. External data is checked for consistency and matched

with internal data. A year-on-year portfolio comparison is made to analyse fluctuations at company or

asset level for each sector. This helps us to understand the drivers behind any changes, which can usually be

attributed to the climate performance of clients, the composition of sector portfolios and improvements in

methodologies. When necessary, scenarios and targets are updated in line with scientific updates to the

decarbonisation pathways aimed at keeping global temperature rises within the necessary limits for a

sustainable future.

Once the process is complete, we draft a progress report, which is incorporated into our integrated climate

report. The report, approved at Board level, was published in September 2022. All progress reported in 2022

relates to 2021. Reporting on progress in the shipping sector is linked to, and aligned with, the Poseidon

Principles timelines. A Poseidon Principles report containing 2021 data was published in December 2022.

Sustainable finance for Wholesale Banking clients

Advancing financing opportunities in line with a net-zero economy for Wholesale Banking clients is a

strategic ambition, and by 2025 we aim to channel €125 billion annually to sustainable finance solutions.

The Sustainable Finance team advises clients on translating their sustainability ambitions into their

financing through sustainability-linked structures, green and social financing solutions, ESG rating advice,

and other ESG advice.

In 2022, the Sustainable Finance team mobilised €101 billion, supported by a broad range of financial

products linked to sustainability elements. Most of these were related to sustainability-linked loans (€39

billion), green bonds (€23 billion) and green loans (€17 billion). However, we believe that alongside volume, it

is also the impact that measures the success of sustainable transactions. This, we believe, is shown in the

additional products and services we develop for customers such as social loans and bonds, sustainable

structured finance, sustainability-linked Schuldscheine and sustainable transaction services such as

guarantees and supply chain finance.

The commitment to mobilise €125 billion annually makes a distinction between transactions where we are

ESG lead, such as ESG coordinator or an ESG structuring role, and transactions where we do not fulfil such a

position, like where we are part of a consortium of banks. Where we are one of several ESG leads or one of

several participants, we record the pro-rata share of the total transaction amount, however, when we are

the sole ESG lead on a transaction, we count the full transaction amount. For bonds, we make a distinction

between active and passive bookrunner role. The reason for selecting this methodology is that if we are ESG

lead in a transaction, we can pro-actively engage with our clients on their sustainability strategy, so our

impact is more significant than if we only participate. See ing.com for more information about the

methodology.

Moreover, we closed 491 sustainability deals (including sustainability loans and bonds, green loans and

bonds, sustainable structured finance, social loans and bonds, and sustainable investments) at year end, up

from 411 in 2021.

Green and social financing structures

We aim to accelerate the green economy by growing our green asset portfolio. Green financing solutions

such as green bonds and loans form an integral part of that. For instance, we acted as sole green loan

structurer in the construction of a transmission line for Champlain Hudson Power Express, ultimately owned

by Blackstone; overall project costs were around USD 6 billion. The 545 km, fully buried transmission line

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should bring 1,250 MW of renewable hydropower from Quebec to New York City. The project is expected to

be finalised in the first half of 2026. This is the largest volume mobilised for a green loan closed by ING to

date.

Our sustainability efforts are also directed towards addressing social challenges. For example, ING acted as

joint lead manager, joint bookrunner and joint social structuring adviser for Singapore-based healthcare real

estate investment trust First REIT’s SGD100 million social bond. This issuance, guaranteed by a trust fund of

the Asian Development Bank, became Singapore’s first-ever healthcare social bond and was awarded Best

Social Bond in The Asset Triple A Country Awards for Sustainable Finance. We also acted as lead arranger,

sustainability adviser and majority investor for Woori Card’s Social Asset Backed Securities, valued at around

€195 million. The transaction won the Best Sustainability Securitisation in The Asset Triple A Country (South

Korea) Award for Sustainable Finance 2022.

Sustainability-linked structures

We incentivise clients who are shifting to more sustainable business models. Sustainability-linked loans

(SLLs) link interest margins to a company’s sustainability performance through mutually agreed KPIs. They

are a way for ING to support, motivate and reward clients in their aim to become more sustainable. In 2017,

ING coordinated the first syndicated sustainability-linked loan in the market for Philips. This loan was linked

to the improvement of Philips’ Sustainalytics ESG rating. In 2022, ING was the sustainability coordinator for

turning this loan into a sustainability KPI-linked loan, with KPIs aligned to Philips' sustainability goals.

Since then, the popularity of SLLs has grown, as sustainability has played an increasingly significant role in

corporate agendas. To date, syndicated SLLs valued at more than €1,000 billion have entered the market.

ING closed 202 sustainability-linked loan transactions in 2022, compared to 147 in 2021. For US-based

Compass Datacenters for example, ING structured a USD1.25 billion SLL with KPIs linked to environmental

and social targets such as the reduction of energy and water consumption, female representation in the

construction workforce and the use of low-carbon concrete. ING also structured an SLL for Compass

Datacenters in Europe.

To enable all market participants to clearly understand the characteristics of these loans, ING was part of a

financial institutions working party that established a set of sustainability-linked loan principles (SLLPs).

These are based around five components: the selection of KPIs, the calibration of sustainability performance

targets (SPTs), loan characteristics, reporting and verification. SLL spin-offs include sustainability swaps,

derivatives and sustainability-linked bonds that are related to the total sustainability profile of a company,

not just for individual projects.

We also look for other ways to support clients taking steps to achieve their sustainability ambitions and

anticipate the future economy. Many of these ambitions are based on innovative technologies, business

models or client propositions that have a higher risk profile and are not yet suitable for standard financing

solutions. ING Sustainable Investments helps clients with their sustainability goals by providing risk-bearing

capital, offering a wide range of tailor-made financial solutions, including equity (investments) and

subordinated debt.

In 2022, we invested in UK-based Econic Technologies, which develops and licenses proprietary catalyst

technology that uses CO2 as a building block in manufacturing, reducing the carbon footprint of widely used

day-to-day products. In addition, a consortium-led investment supported Singapore-based insect protein

producer Nutrition Technologies to expand production, launch new products and create strategic

partnerships. Transforming agricultural waste streams into insect-based feed products and fertiliser enables

a more circular economy, while at the same time also helping reach emissions-reduction targets and

improve food security.

In April 2022, the Dutch National Growth Fund provided a subsidy of €50 million to Zero Emissions Services

(ZES), of which ING is a founding partner, to accelerate the introduction of docking stations, ship

modifications and battery containers (ZESpacks), all of which will contribute to the electrification of inland

vessels and a transition to net zero. ING has also become a shareholder in EIT InnoEnergy, the European

innovation engine for sustainable energy that supports start-ups and commercially attractive technologies,

and provides education. EIT InnoEnergy is supported by the European Institute of Innovation & Technology

(EIT), a body of the European Union.

The Sustainable Structured Finance team supports clients by functioning as a laboratory for new sustainable

technologies and business models in need of financing within the EMEA region. The team is involved in the

origination, structuring and execution of structured finance transactions, with an emphasis on the circular

economy, bio-chemicals, waste and water or any other project supporting sustainable development. The

team also provides financing solutions to smaller-scale renewable energy projects in the Netherlands, such

as ‘ZonnepanelenDelen’, a solar financing platform that offers non-recourse project finance of between

€200,000 and €5 million to solar power projects undertaken by SMEs and project developers.

We also led a consortium of Dutch financial institutions in the construction of technology company

Avantium’s FDCA factory in Delfzijl, the Netherlands. This will be the first commercial FDCA factory in the

world. FDCA is the key building block for the 100 percent plant-based, recyclable polymer PEF, a non-fossil-

fuel-based alternative for PET.

ESG Advisory

Besides financial support, we help clients navigate the rapidly changing regulatory landscape and advise on

their net-zero strategy. Clients benefit from our deep and broad experience built up over the years helping

other companies on ESG-related journeys. Some clients are ahead of the curve and for them we frequently

act as a sounding board, alongside our financing-related role. Other clients are at the early stages of their

sustainability journey. For them, we provide guidance based on our market experience and suggest areas

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where they can make impact to become aligned with climate pathways and their peers. Through teaming

up with the relevant capital structuring and advisory departments, we also advise corporates on financing

ESG-related corporates’ CAPEX and M&A transactions (selling non-sustainable assets or buying sustainable

assets).

Green bond framework

To support the strong growth of our sustainable finance portfolio, and to meet green funding needs, ING

issues green bonds, supported by our green bond framework. The framework aligns with the International

Capital Market Association’s (ICMA) Green Bond Principles (GBP). We intend to allocate the proceeds of our

green bonds to an Eligible Green Loan Portfolio of new and existing loans including renewable energy

projects and green buildings. Other categories are clean transportation, pollution prevention and control,

and sustainable water management.

Under this framework, ING Bank and its subsidiaries can issue any debt security (such as senior bonds,

subordinated bonds, covered bonds, commercial papers and medium-term notes) to finance and refinance

assets and projects which contribute to the UN's Sustainable Development Goals and our own sustainability.

ING established its sustainable debt strategy via the publication of the framework. Since then, we have

continued to take steps to enhance our sustainable debt strategy and see it as an important tool in

supporting the growth of our own sustainable finance portfolio.

In alignment with the ICMA’s 2021 GBPs, the framework is presented through four pillars: use of proceeds,

process for project evaluation and selection, management of proceeds and reporting. The framework also

follows the recommendations of the Green Bond Principles regarding external review.

Product offerings for Retail and Business Banking customers

As a retail bank, we aim to help customers transition to a low-carbon environment. While we have provided

sustainability products and services in Retail Banking since 2017, we have since introduced many more

sustainable banking products across our markets, following a sustainable alternative products roadmap, to

facilitate this transition. It is our aim to have sustainable alternatives for our main retail products in all

markets by 2025.

In 2022, we adopted a net-zero scenario for the residential real-estate sector, replacing the beyond two-

degree Celsius scenario previously used. The new scenario is guided by the EU's Carbon Risk Real Estate

Monitor (CRREM) 1.5-degree Celsius scenario, a tool that enables the alignment of real estate portfolios

against decarbonisation pathways. We use this tool for the six markets in scope. Our scenario is also

directed by data for residential real estate derived from the International Energy Agency's global net-zero

scenarios. In the new scenario, houses in our portfolio across these markets need to reach an average

energy efficiency of 0.6 kg CO2/m2 by 2050, which is more ambitious than the previous 2.6 kg CO2/m2. By

2030, they need to reach an average energy efficiency of 19.7 kg CO2/m2. The scenario currently applies to

five of the six markets in scope: the Netherlands, Germany, Poland, Spain and Australia. Belgium is excluded

from the target until the issue of data comparability with other markets can be solved.

In support of this ambition, in 2022 we further rolled out sustainable mortgage products, which stimulate

more energy-efficient homes. Sustainable mortgages are part of our sustainable lending approach that we

consider EU Taxonomy-eligible. After being introduced in Poland in 2021, sustainable mortgages are now

also available in the Netherlands, Germany, Italy and Romania. We also offer sustainable consumer loans,

with discounts related to the purpose of the loan, in Belgium, Romania, Poland, Turkey and Luxembourg.

These loans can be used for housing, to improve the energy efficiency of homes, and for other activities

such as purchasing sustainable mobility options.

In addition to lending products, we continue to provide customers with a range of tools and platforms that

can support them in their renovation efforts. These include the homeQgo platform in the Netherlands, as

well as a renovation calculator tool that ING makes available to customers in Germany in partnership with

KfW bank. For more information on our sustainable housing approach, see our 2022 Climate Report on

ing.com.

In 2022, we also launched a carbon footprint calculator in our Dutch app that enables customers to view

spending-related CO2 emissions in their bank statements. The calculator is live for 500,000 customers. In the

Netherlands, Romania and Turkey, we also provide customers with renewable, recyclable or virtual bank

cards, which help lower the impact of our banking products on plastic waste.

We are also helping Business Banking customers make their businesses future-proof by offering sustainable

financing alternatives. We now offer sustainable finance alternatives (loans and/or lease) for SMEs and mid-

sized corporates in most of the countries where we operate. We aim to reach €1 billion new production of

sustainable financing annually in the Netherlands in 2025.

In 2022, we brought four new loans to market, bringing our total offering of loans supporting customers

with sustainable activities to nine. In Poland, a sustainability improvement loan was launched after a pilot in

the Netherlands. Similar to its Wholesale Banking counterpart, this type of loan incentivises business

customers to reduce their environmental impact by improving their sustainability scores and ratings and

reducing their CO2 emissions.

Sustainability loans were launched in both Romania and Turkey. In Romania, we implemented a framework

to identify and customise sustainable transactions for customers. As a result, ING in Romania granted its

first sustainable credit for entrepreneurs, financing renewable energy and circular economy projects. One of

the most notable examples is a sustainable loan granted to Promateris, manufacturers of sustainable

products and solutions for the circular economy, to develop extra production capacity. The new facilities will

produce biodegradable and compostable raw materials with applications in the packaging, food service and

waste management sectors.

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Next to our financing alternatives, we also supported Business Banking customers with a range of tools to

support their sustainability journeys. In our real-estate financing business in Netherlands, we continued to

offer access to an ESG improvement platform.

Sustainable Finance Disclosure Regulation

As of 31 December 2022, the investment funds at ING following the disclosures according to Article 8 or 9 of

the Sustainable Finance Disclosure Regulation (SFDR) accounted for 51 percent of total client assets (assets

under management and/or custody) in funds distributed in EU markets. These funds were purchased by our

customers in the Netherlands, Belgium, Luxembourg, Germany, Spain, Romania, Poland and Italy.

ING is undertaking many efforts to create transparency and facilitate the transition of products using the

SFDR framework. For example, during 2022, ING Netherlands adapted a Discretionary Portfolio Management

(DPM) strategy to be in line with Article 8 disclosure requirements. With this adaption, all four standard DPM

strategies available in the Netherlands are in line with Article 8, representing DPM products promoting,

among other characteristics, environmental or social characteristics, or a combination of those. In addition,

in Belgium, we brought three of our ING flagship funds in line with Article 8.

We disclose the ratio of client assets in SFDR Article 8 and 9 funds of total client assets in funds, to provide

insights and transparency into our clients' portfolios. According to SFDR, Article 8 refers to a fund promoting,

among other characteristics, environmental or social characteristics, or a combination of those. Article 9,

according to SFDR, refers to funds with sustainable investment, or a reduction in carbon emissions, as its

objective. For funds managed by third party asset managers, we rely on information provided by them, with

no further review of the classification by ING.

Essentially, SFDR is a disclosure regulation and does not yet reflect a level of sustainability of funds.

Leveraging on extensive data points provided through SFDR as well as complementary analyses, ING

continues to develop methodologies to present customers with an even more insightful and transparent

view on their investments, while monitoring the regulatory developments including the supervisory

authorities’ guidance. Eventually, it is through collaboration with asset managers, distributors, regulators,

and investee companies that we can achieve a transparent market standard for our retail customers.

Sustainable investing services

ING is a signatory to the UN-backed Principles for Responsible Investment and as a provider of investor

services to our Retail Banking customers we are committed to incorporating environmental, social and

governance (ESG) issues into investment decisions, policies and processes that underpin these services.

We have been reporting on sustainable investing services (SIS) for a decade. Over the past two years, new

regulations and definitions of sustainable investing have been introduced, such as the EU Taxonomy and

the Sustainable Financial Disclosure Regulation (SFDR). For this year, the reported numbers continue to be

derived from our own internal ING methodology. Our SIS are provided based on a methodology that has

been developed by ING to assess different kinds of investment instruments, from company-level equity to

funds and portfolios, using a diverse set of ESG criteria.

During 2022, ING’s SIS applied to our biggest sustainable investment markets: the Netherlands, Belgium,

Luxembourg, and Germany, with total sustainable investments valued at €14.6 billion, down from €15.7

billion in 2021. The drop was influenced by the overall market performance of equities and bonds, which

decreased by 12 percent on average. Sustainable portfolios averaged a 15 percent decrease due to the

absence of high-performing sectors such as oil and defence. However, €1.6 billion was added to the value of

sustainable investments in 2022 as one of the four main investment strategies in the Netherlands took a

more sustainable approach.

Belgium narrowed its scope on sustainable investment services, excluding the exposure on sustainable

funds that are invested via funds of funds unless those assets represented over 85 percent of the funds of

funds portfolio. As a result, numbers for 2021 and 2020 were updated for 2021 from €19.2 billion to €15.7

billion, and for 2020 from €13.2 billion to €11.2 billion. Our services cover all asset classes including

dedicated portfolios, investment funds and structured products, available in brokerage, advisory and

discretionary management propositions. Read more about our sustainable investment services on ing.com.

For investment funds, we apply quantitative and qualitative screening. The quantitative screen is conducted

to understand the ESG profile of the asset and the fund manager. It covers nine ESG categories across

policies, selection methodology and governance. The qualitative screen consists of an interview with the

fund manager focused on their assessment and ESG approach. In a final step, we validate the fund’s

investments against our sustainable investing criteria. This approach applies to funds from active managers,

but also to structured products or index funds. We understand that the policies of external investment funds

will not fully align with the ING policy, preference is given to investment funds whose sustainability policy is

most in line with that of ING.

Within discretionary management propositions, we also perform a company-level analysis, which

integrates both positive and negative ESG screening. Positive screening is based on a company score that

incorporates the company's ESG risk management, the evolution of that risk and the management of

adverse impacts on society and the environment by the company. We invest only in companies that belong

to the top 70 percent in their sector, when it comes to ESG performance. Applying negative screening

means that we exclude companies with severe negative corporate conduct. We also exclude companies

whose revenues from products or services that have a negative environmental or societal impact are higher

than five percent (for production) or 10 percent (for distribution). Excluded companies operate in the

following sectors: alcohol, coal, controversial weapons, fur, gambling, non-conventional gas, oil, tobacco,

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and weapons. We aim to follow this same screening process for international financial institutions and semi-

sovereigns.

Our sovereign-level analysis integrates several sustainability factors such as social issues, environmental

performance, corruption, endorsement of international treaties and the adverse impacts of these sovereigns

on environment and society. By combining best-in-class scores with minimum requirements, we define the

eligibility of a sovereign for our sustainable investment portfolios. More detailed information on the

screening process can be found on ing.com.

As regulations and market standards constantly evolve, ING is investigating various ways of categorising

and reporting on SIS and we are monitoring regulatory developments. We believe that transparency,

uniformity and collaboration are needed from all market participants, to create a meaningful reporting

standard for customers, which can easily be benchmarked against other investments.

Integration of the EU Taxonomy regulation

The European Commission introduced the EU Taxonomy in 2021 as part of the Green Deal strategy and the

Commission's action plan on financing sustainable growth. With six environmental objectives, the

Taxonomy aims to channel capital flows to support the transition, help generate sustainable and inclusive

growth and prevent greenwashing. In 2022, we started reporting within the EU Taxonomy framework over

the financial year of 2021. An update on the 2022 financial can be found under 'Environmental, social and

governance risk' in the 'Risk management' section of this report.

ING sees the EU Taxonomy as an opportunity to re-evaluate balance sheet assets and increase

transparency on environmentally sustainable products with the aim of reaching the Paris agreement’s

target of net zero by 2050. The strategic priority, 'Putting sustainability at the heart of what we do' further

emphasises our own sustainability ambitions and we strive to continuously integrate regulatory measures

with these ambitions. It is important to recognise that our own efforts such as the Terra approach and our

sustainable finance products and services differ in scope from the EU Taxonomy. We believe that both

approaches need to be harmonised in the future.

In 2022, we categorised our lending efforts to corporate clients in different product categories. Before

financing clients, we assess them on environmental and social risk criteria as defined by our own risk

appetite statement. Our work with specific clients is based on the opportunity to develop tailored

sustainable products with them, such as sustainability-linked loans with company-specific KPIs.

We continuously explore new ways to support clients in a sustainable way and align with the principles of

the Loan Market Association, the ICMA for green, social and sustainability-linked financial products and the

EU Taxonomy. We also proactively inform clients about aligning their business activities with the Taxonomy

and have started to incorporate published technical screening criteria into our loan assessment processes.

Collaboration

No one sector, much less one bank, has the ability to solve the world’s problems. We believe that an

inclusive approach is the only way we can make any meaningful positive impact. From climate to human

rights and financial health, we seek to increase our sustainability impact through partnerships and coalition-

building.

In 2022, alongside ongoing involvements with, for example, the 2 degree Investing Initiative, the UN-led

Collective Commitment to Climate Action and the Net-Zero Banking Alliance, we collaborated with peer

banks under the UNEP-FI Principles of Responsible Banking alliance, co-leading a working group that

developed a set of standard indicators for financial health and financial inclusion for banks.

Following this, we started piloting the application of some of these indicators in the Netherlands, Spain and

Romania. In the Netherlands, this included starting a context assessment and a baseline analysis on several

of the indicators. Through these pilots, we aim to improve our customer segmentation and targeting of

financial health actions. More information about our progress towards the PRB Commitment to Financial

Health and Inclusion can be found on ing.com.

Dutch collaborations in the area of financial health also continued with Queen Máxima's work as UN

ambassador for Inclusive Finance for Development, the debt prevention organisation Schuldhulproute, the

Financial Health Index and the National Coalition for Financial Health, launched in 2022.

This report is also aligned with requirements from UNEP's FI Principles for Responsible Banking (PRB). A self

assessment disclosure on PRB can be found in the technical appendix of this report. Selected sections of our

2022 PRB reporting and self-assessment have been assured by ERM CVS, an assurance provider, to a limited

level of assurance. Full details of the scope, activities, limitations and conclusions of ERM CVS’ assurance are

included in the Assurance Statement, at the end of the technical appendix.

Managing climate-related, environmental and social risk

Assessing and managing the risks associated with a transition to net zero is critical. As climate risk becomes

increasingly relevant, many banks are evaluating the potential negative impacts it could have on their

business. Both transition risk, which can arise from changes in policy, law, technology and the market, and

event-driven or longer-term physical risk, caused by events such as drought, flooding and extreme weather,

could impact the economy, clients and therefore our business. Even after implementing measures to help

mitigate the effects of climate change, physical risks could continue to occur since climate change is actual.

Therefore, these risks need to be well understood and managed. The way we do this, as well as an

explanation of the different risks involved, our performance and results, can be found in the 'Risk

management' section.

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Strategy and performance

Our leadership and corporate governance

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Consolidated financial statements

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Other information

> Sustainability at the heart

ING Bank Annual Report 202218

Environmental and Social Risk (ESR) policy framework

ING’s ESR policy framework helps us make informed choices about how, where and with who we do

business. In 2022, the ESR framework was updated to reflect several minor amendments following the last

comprehensive review cycle that took place in June 2021. The new release includes, among amendments to

restrictions in the tobacco value chain, additional clarity on some of the requirements for the ESR client

assessment process concerning specific group of companies. It also includes the required ESR due diligence

for public authority entities. As well as restrictions, the ESR policy also sets guiding principles for biodiversity

and human rights.

Biodiversity

According to the Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services (IPBES),

the rate of species extinction is accelerating with grave impacts on people around the world. IPBES

estimates that around one million animal and plant species are now threatened with extinction, many

within decades. If the rapid decline of biodiversity continues, the livelihood of many businesses is at stake.

The agricultural sector, for example, depends on healthy ecosystems, and the construction and

pharmaceutical sectors both need access to natural resources to prosper. This can have an impact for

banks.

Through our ESR policy framework, ING identifies and manages risks related to biodiversity loss. Our

processes focus on avoiding a negative impact on biodiversity, where possible, and minimising impact that

cannot be avoided. We also engage with clients to find and finance opportunities to do business in a way

that respects nature.

Also through the framework, we apply strict ethical and environmental criteria to financing decisions. We

don’t finance projects that directly impact high-value ecosystems, such as UNESCO heritage sites, Ramsar

wetland sites or areas designated for protection by the International Union for the Conservation of Nature

(IUCN I and II areas). In addition, our screening criteria include enhanced due diligence for transactions that

can impact rich biodiversity areas and ecosystems. In 2022, we expanded our due diligence to include ‘key

biodiversity areas’, which are host to critical populations of the world’s most threatened species.

To ensure employees understand the impact of biodiversity loss on business, we introduced two learning

modules in 2022. The first, an internal video explaining biodiversity loss, why it is relevant to customers and

to ING, what we are doing to protect biodiversity and how employees can help. It is part of a sustainability

learning offering, available to the entire company. The second module was co-developed with the

Biodiversity Working Group of the Dutch Sustainable Finance Platform, which is hosted by De Nederlandsche

Bank. The e-learning is available on the platform's website.

Reducing deforestation is a priority for protecting biodiversity and can make major contributions to climate

mitigation. We engage with clients around the world, active in cattle, palm oil, soy, wood, cocoa and coffee,

calling on them to put in place no-deforestation and no-ecosystem conversion policies and commitments

and to work towards full traceability in their supply chains.

To restore biodiversity globally, all stakeholders need to work together. That’s why ING is an active member

of external partnerships and initiatives. We work with peers and expert organisations to further develop the

TNFD framework, which we intend to use as guidance in future reporting. ING is also a member of the

finance workstream of the EU Business@Biodiversity platform, an EU-led initiative that aims to support

financial institutions in integrating biodiversity risks and opportunities.

ING is a signatory of the Equator Principles, a financial industry benchmark for determining, assessing and

managing environmental and social risk in projects. Projects financed under the Equator Principles

framework that have an impact on natural ecosystems, are expected to carefully manage that impact. We

have strict criteria in place to apply this framework, ensuring that biodiversity impact is not only avoided

and minimised where possible in these projects, but also restored.

Human rights

We believe every person, everywhere, has the right to be treated with dignity and have their interests

considered equally. ING and our clients have the potential to impact human rights through our operations

and business relationships. Our impact is on different levels: how we do business, and with who we do

business, not only as an employer but also through our supply chains.

We work to influence and support business partners to respect human rights in multiple ways. Our ESR

policy framework includes an overarching policy on human rights to guide us when assessing clients and

the transactions we finance. We also act on a variety of environmental, climate and social topics as well as

highlighting their interconnectivity. For example, our approach acknowledges that biodiversity loss

negatively impacts people's human rights, affecting their access to food, water, sanitation, culture,

property, a healthy environment and more.

In 2022, we published a Human Rights Review 2021/2022 where we disclosed our most severe human rights

issues in Retail Banking with an emphasis on individual customers (discrimination, financial distress and

privacy abuses). We also provided updates on the management of our most severe human rights issues in

our own operations (work-related stress and discrimination). We also developed a tool for analysing the

human rights impact within our portfolio. We are currently piloting this tool and looking into ways to

implement it as part of ING's existing processes.

We continue our human rights efforts in line with the UN Guiding Principles on Business and Human Rights

(UNGP) as well as the OECD Guidelines for Multinational Enterprises. We do this by understanding regional

and portfolio risks, engaging with clients, using financial leverage when needed, and being cognisant of

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Strategy and performance

Our leadership and corporate governance

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> Sustainability at the heart

ING Bank Annual Report 202219

human rights impacts when engaging with stakeholders. We consulted with human rights and civil society

organisations in drawing up our ESR policy review.

Via platforms that set standards on this topic, ING aims to be transparent about our progress in the hope

that others will join us and strive to be a step ahead of broader expectations. Read more in ‘Environmental,

social and governance risk’ in ‘Risk management’. To understand the link between human rights and climate

change, a section of our climate report is dedicated to human rights. The transition to a green economy

may impact people. Transitioning out of fossil fuels may result in stranded assets and consequently affect

surrounding communities. It could also increase energy poverty for vulnerable people reliant on fossil fuels.

We recognise that as the world transitions from a carbon-intensive economy into a green economy, we

must collectively acknowledge the needs of people, especially the most vulnerable.

Financial health and inclusion

Part of ING’s purpose to empower people to stay a step ahead in life and in business means helping

customers and society stay a step ahead of the challenges they’re facing. One of the ways we can make a

difference here is by aiming to advance financial health and inclusion for customers and communities.

Financially healthy people can contribute to a healthy economy and help drive social progress. At the same

time, money is a leading cause of stress for people with half of European households struggling to make

ends meet. According to the group European Pensions, one-third are unable to face unexpected financial

expenses and close to 40 percent are not saving for retirement.

ING is committed to empowering customers and the community towards improved financial health, a state

in which an individual, household, micro, small or medium-sized enterprise can manage their current

financial obligations and have confidence in their financial future. This includes managing day-to-day

finances to meet short-term needs, the capacity to absorb financial shocks (resilience), the capacity to

reach future goals, and feeling secure and in control of finances (confidence).

According to a financial health working group convened by the UN Secretary-General’s Special Advocate for

Inclusive Finance for Development, having financial health as a business purpose contributes to happier,

more engaged customers with greater financial resilience, better management of day-to-day finances, an

enhanced ability to set future goals, and improved confidence, security and control of finances. ING is part

of this working group: the Special Advocate has showcased our approach as best practice.

Financial health can also be seen from a human rights perspective. Everyone has a basic right to be a full

member of the economy and live life in a financially dignified way. ING strives to make sure it does not

discriminate by giving customers different levels of essential information. We aim for our information to be

comprehensible and accessible for all.

Advancing customers' financial health and inclusion

ING has built a financial health framework consisting of three pillars. For each pillar, best practices are

shared between business units with the goal of learning from each other. Similar projects are running in

several countries but tailored to local circumstances. Examples include a project in Spain on the avoidance

of overdraft, which is now also running in Germany.

Other examples are campaigns in Germany, the Netherlands and Romania which aim to stimulate those

with hardly any savings to adopt a savings habit and, if possible, to build a savings buffer. Tracking each

project to measure effectiveness, we introduced 15 new financial health projects in Spain, Germany,

Romania, Turkey, Australia and the Netherlands in 2022, reaching two million customers.

Financial inclusion, the first pillar, is about everyone who meets the bank's criteria having access to banking

products and digital adoption, including those with seeing or hearing difficulties - what we refer to as

'leaving no one behind'. It also means that people have effective access to all types of financial products,

not just basic ones. To achieve this, we want to create equal opportunities and make sure products, services

and facilities are accessible to everyone and we want to engage people to effectively use them. Examples of

this include voice-activated ATMs in Poland, the Netherlands and Turkey, and a bank card with a notch so

the visually impaired can insert them correctly, in the Netherlands and Belgium. The card is also designed to

support customers with limited hand functionality. In Australia, we provide phone banking for customers

with speech or hearing impairments via the government’s National Relay Service. Sign language services are

available in some bank branches in Poland.

ING also started a programme to align digital channels in all EU Retail Banking countries with the EU’s Web

Content Accessibility Guidelines standard (WCAG 2.1). For example, in the Netherlands, the ‘MijnING’ app is

accessible with a voice-over to transfer money or to get current account insights. Examples of improving

digital inclusion include ING in Belgium partnering with Beego to help customers become digital by providing

‘digibuddies’ (computer science students) to assist them. And in Australia, more than 100,000 customers

over 55 have received information to improve their digital awareness and skills. Financial inclusion will be

included in the ING Compliance framework under the Client Protection Framework we are developing, as we

want to uphold the same standards across the globe.

The second pillar of our financial health framework is about making sure that people’s monthly expenses

don't exceed their income, and having healthy levels of debt and financial resilience. Everyday Round Up for

example encourages customers in Poland, Australia, Turkey, Germany, Spain and Romania to build savings.

We continue to partner with apps like Minna, which displays customer subscriptions in one place, and

Dealwise, a shopping platform that gathers cashback deals and discounts in one place.

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Strategy and performance

Our leadership and corporate governance

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ING Bank Annual Report 202220

In 2022, ING in Spain introduced Money Up!, which aims to provide financial peace of mind by giving

customers a clearer view of their income and expenses, with intuitive, customisable tools to improve their

finances and make better informed decisions.

Skyrocketing energy costs and inflation, partly stemming from the war in Ukraine, had a significant effect

on families across Europe and beyond. The cost-of-living crisis meant that many people struggled to pay

their bills. ING assisted impacted Dutch customers (and non-customers), via a campaign directing them to

www.geldfit.nl/energie to help manage their situation. In September 2022, more people were referred to

Geldfit than in the whole of 2020 and 2021 combined.

The third pillar of our financial health framework is helping customers with their financial planning. In

Germany, a personal budget tool is available for customers to plan and control expenses as well as discover

potential savings. In Belgium, Easy self-invest gives customers access to information from ING investment

experts and allows them to start investing with only small amounts of money.

Supporting financial health in the community

In 2022, the war in Ukraine resulted in months of escalating devastation and displacement for children and

their families. Not only were children among the many killed, wounded or deeply traumatised, but their

access to school, healthcare and other basic services was severely interrupted. In response to the crisis, ING,

together with colleagues and clients, donated more than €6.5 million to UNICEF's emergency response and

more than €7.5 million to local charities supporting people impacted by the war in Ukraine and in countries

receiving refugees.

Both the Covid-19 pandemic and the war in Ukraine exposed and deepened existing inequalities. As a result

of the war and soaring food and energy prices, the UN Development Programme noted that a staggering 71

million more people around the world experienced poverty in 2022. According to Ipsos research carried out

in December 2022, people not just in the EU, but globally, listed cost-of-living as their biggest concern.

Our approach to community investment adapts to these changing needs. Through a combination of global

and local funding, we support programmes that contribute to an inclusive economy, one where everyone

can participate. In 2022, ING, together with colleagues and clients, donated an additional €13 million to a

range of social programmes, €9 million of which was specifically focused on building financial health in

communities, covering the areas of future-proof employment, financial capabilities and social enterprises.

As examples of supporting employment, in 2022 the ING Netherlands Foundation partnered with Hack your

Future to train former refugees to become IT professionals and help them find jobs. It worked with Jong

Ondernemen to increase opportunities for students to enter employment, and Springplank, which was set

up to guide homeless people towards employment, housing, and financial capability. In Italy, we continued

to partner with Fondazione Mondo Digitale to provide training for around 6,000 people, especially women, in

digital and job-orientation skills. In Germany we partnered with MentorMe, a mentoring programme that

supports vulnerable women in the job market. Mentees are matched with ING mentors for one year. In

Belgium, we worked with the King Baudouin Foundation to fund projects that strengthen digital inclusion,

helping people develop digital skills and ensuring that digital products and services are accessible to all. ING

customers get involved by helping to choose which projects receive additional funding.

ING also initiated projects that assist with financial capabilities. In the Netherlands for example, the ING

Netherlands Foundation supported Money Start to provide education on debt prevention while the Youth

Perspective Fund helps young people to become debt-free. In Spain, together with Nantik Lum, we

supported the CREA Salud Financiera programme to improve the financial health of women that are, or are

at potential risk of, socio-economic exclusion. In Luxembourg, we worked with Jonk Entrepreneuren to

inspire and prepare young people aged nine to 25 for entrepreneurship and employment. Twelve

programmes provided hands-on learning in entrepreneurship, work readiness and financial literacy.

As examples of projects focused on social enterprise, in Romania, together with Impact Hub, we empower

charitable associations with entrepreneurial education and guidance to help them improve interventions,

generate alternative sources of funding and develop scalable solutions that increase their social impact.

Next to these examples, we also provided funding to projects in Australia, the Czech Republic, France, Poland

and the United States.

Empowering employees on sustainability

Putting sustainability at the heart of what we do means making sure employees are fully engaged on this

topic. We aim to give them the relevant knowledge, skills, and mindset to put sustainability into practice

both inside and outside the workplace.

In 2022, to further develop awareness around sustainability, we hosted global and national webinars and

townhalls addressing sustainability topics such as climate action, climate risk, human rights and

biodiversity. In the Netherlands, we held 'Let’s talk sustainability' events, where ING experts, partners and

employees came together to discuss relevant sustainability topics. In addition, a global sustainability

e-learning was made available to empower employees with sustainability-related knowledge and skills. It

included foundational and advanced learning modules. Some of these were developed specifically for ING,

while others were provided by partners. Additional learnings on climate risk and biodiversity were included,

in cooperation with the Dutch Banking Association (NVB). On an expert level, where employees required

further skills, we provided online and offline training on sustainable finance, as well as environmental and

social risk.

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Strategy and performance

Our leadership and corporate governance

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> Sustainability at the heart

ING Bank Annual Report 202221

ESG governance

In March 2022, we updated our ESG governance approach, integrating and aligning ESG governance with

existing business-as-usual governance of the bank. This allows us to steer holistically across ESG on themes

like climate, biodiversity, human rights and financial health. As a result, ESG is now a regular topic on the

MBB agenda. Our global head of Sustainability reports directly to ING’s CEO. Sustainability/ESG leads in major

countries have a functional line to the global head of Sustainability to create a stronger connection between

global and local actions.

The ESG Committee, set up in 2022, assists the SB with matters relating to ESG, including, but not limited to,

the development and integration of ESG across the company and its strategy. The ESG Committee also

assists the SB by monitoring and advising on relevant ESG developments. In addition, we have created an

ESG Sounding Board comprised of senior leaders from across the organisation and including representatives

from Legal, Investor Relations and Corporate Strategy. The Sounding Board helps guide the development

and implementation of our strategy for ESG topics as well as monitoring and reporting on our progress. We

follow the recommendations of the Taskforce for Climate-related Financial Disclosure in our governance and

reporting. We believe this new approach increases our effectiveness, efficiency and accountability as we

strive to be a banking leader in building a sustainable future for customers, our company, society, and the

environment.

Taxation

Our taxation policies and performance are key elements under the governance pillar of our ESG framework.

We are mindful that every aspect of our business, including our approach to tax, has an impact on society.

We have therefore chosen to formalise our approach to clarify our views on responsible tax behaviour and

tax governance.

Our tax principles, which are applicable worldwide, mirror ING’s values of integrity, honesty, prudence and

responsibility. These values are the main drivers for our relationship with tax authorities and for the

adoption of tax transparency as standard practice.

As a global bank, we play a crucial role in fighting financial crime and protecting the financial system from

harmful behaviour. This includes criminal activities such as tax evasion, but also aggressive tax avoidance,

which although not illegal can be damaging to the communities in which we operate. We aim not to

facilitate such activities. We also believe in the principle that tax should follow business, so profits are

allocated to the countries where business value is created. It is our policy to comply with domestic and

international laws and regulations, taking account of both the letter and the spirit of the law, as well as

standards such as the OECD guidelines for multinational enterprises, and we apply the arm's length

principle.

Wherever we operate, we seek to establish and maintain an open and constructive dialogue with local tax

authorities and other government bodies, based on the disclosure of all relevant facts and circumstances. In

this dialogue we seek to provide clarity and establish certainty on all relevant local tax components in

advance. We are transparent about our approach to tax and our tax position. In formulating this approach,

we have taken account of the interests of our stakeholders, including (tax) authorities, non-governmental

organisations, customers, shareholders and society in general.

Disclosures are made in accordance with relevant domestic regulations, as well as applicable reporting

requirements and standards such as the International Financial Reporting Standards. Since 2015, each ING

annual report has contained a country-by-country overview of the result (before tax) and the total

corporate income tax charge per tax jurisdiction. ING also submits, annually, a similar type of overview to

tax authorities which enhances their insight into our tax position. In 2022, ING was ranked third in the

Association of Investors for Sustainable Development (VBDO’s) yearly Tax Transparency Benchmark.

It is our policy not to advise clients on taxation matters. Clients remain responsible for their own tax position.

ING joined the Dutch Tax Governance Code developed by the Confederation of Netherlands Industry and

Employers (known as VNO-NCW). ING embraces the principles of the code and will work consciously to

comply with the targets set, as laid out in our Tax Governance Code. This is available on ing.com in the

Compliance section under About Us. The financial information in the Tax Governance Code is recorded under

notes to the consolidated financial statements in this annual report (see note 32, Information on

geographical areas and note 34).

Tax policies, procedures and a tax control framework have been implemented to support management in

mitigating potential tax risks in a prudent manner. Internal monitoring, control and reporting of tax-related

risks takes place on a continuous basis with annual reporting to the board and various other stakeholders.

For SOx 404 purposes (section 404 of the Sarbanes-Oxley Act), an ‘effectiveness of internal control

statement’ with respect to tax controls has been provided. Tax risk management is subject to Corporate

Audit testing and evaluation. As part of the tax risk assessment, if applicable, the potential use of (tax)

incentives and/or subsidies is considered acceptable to the extent explicitly intended by the authorities.

In all countries in which ING is present, it is ING’s position to be cooperatively tax compliant. This implies

being transparent about, and disclosing, relevant tax risks towards tax authorities. Tax risks not only refer to

ING’s own tax position, but also our role as gatekeeper for the financial system as well risks in relation to our

customers. In this respect, we have integrated a tax integrity assessment in our overall customer risk

assessment process.

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Strategy and performance

Our leadership and corporate governance

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> Sustainability at the heart

ING Bank Annual Report 202222

How we are making the difference

ING is making the difference by concentrating on two overarching

strategic priorities: giving customers a superior experience and putting

sustainability at the heart of what we do. To put these into practice,

and to make that difference for all customers, we have defined four

enablers: providing seamless digital services, using scalable technology

and operations, staying safe and secure, and unlocking our people's

full potential.

1 For details regarding the measurement of this KPI, we refer to paragraph "Digital access" on page 25

2 Weighted average availability during prime time (6:30 - 01:00); based on number of primary customers per country for channels: Internet banking Private

Individual, Internet Business Banking and Mobile Banking App.

3 and 4 Average availability 24x7, measured frequently per hour, excluding planned changes.

Providing seamless digital services

In a world where accelerating digitalisation is one of the main global trends impacting banking, customers

are spending more and more time online. That's why we want to make their lives easier by giving them a

seamless digital service. Putting the customer at the centre remains our core strategy.

Customers deserve a personal, easy, relevant and instant experience at every touchpoint, from the way we

communicate and onboard them to how we provide products and handle customer requests. ING facilitates

this by developing, maintaining and enhancing personalised, reliable digital services that are available 24/7.

Developing, maintaining and enhancing these basics provides the foundation for providing a superior

customer experience, and in turn this will help us achieve our ambition of becoming the number-one bank

for NPS in all ING countries.

Our emphasis continues to be on mobile and we are further improving our mobile capabilities. In 2022, 71

percent of our communication was personalised. As well as helping customers to make more informed

financial decisions, personalising customer interactions helps boost mobile sales. In 2022, 58 percent of

customers only engaged with us via mobile apps, up from 51 percent in 2021.

We use data analytics and machine learning to personalise digital services for customers. Given the

importance of data for offering personal and relevant services, data security and privacy protection are

crucial.

By digitalising key customer journeys we are enabling a superior customer experience at a reduced cost-to-

serve, while measuring impact through NPS and cost efficiency. In 2022, our Digi Index Score was 64

percent, a figure that reflects the average of straight through processing (STP) rates of key customer

journeys i.e. those that are handled without manual intervention. By 2025, we aim to reach a Digi Index

Score of over 75 percent.

Data analytics

We use advanced analytics and machine learning to extract insights from data to personalise customer

experiences, making the difference for both customers and colleagues. Our ambition as part of our strategy

of seamless, digital/scalable operations is to increase our STP rate to facilitate a smoother customer

experience. Call reduction and further digitalisation of our processes are a part of this. We have further

invested in our chatbot, callbot and virtual assistant capabilities and now have active chatbots in Belgium,

Italy, the Netherlands, Poland, Spain and Turkey, deflecting up to 40 percent of incoming chat volume

automatically. Guided by chat and callbots, customers can now learn how to resolve issues themselves

using the ING mobile app. Other benefits for customers include less waiting time if they want to speak to an

agent because more chats and calls are handled through digital solutions, and it is easier for them to find

quick answers to simple questions, even outside regular business hours. ING uses machine learning

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Strategy and performance

Our leadership and corporate governance

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Consolidated financial statements

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Other information

> How we are making the difference

ING Bank Annual Report 202223

techniques to understand a customer's intent and thereby make it possible to respond in a more personal

way to the customer request.

Analytics is also used to help create a safe and secure environment within the bank. Analytics has

contributed to a bank-wide anti-fraud programme, supporting the reduction of fraud damage for both

customers and ING. This was realised through machine learning models for certain fraud 'modus operandi'.

We also use our AI insights and expertise to fight financial and economic crime. Our advanced AI model

allows us to detect financial and economic crime better and earlier.

In addition, ING is a partner of the Kickstart AI initiative in the Netherlands, which aims to solve real business

problems with the use of AI. This year, we joined other member companies in tackling the food waste

challenge and improving the demand forecasting model at Delhaize Belgium that helps balance product

availability and waste.

Scalable technology and operations

Reflecting our role as a digital first bank and to enable a superior customer experience, ING believes that

scalable technology and operations are the foundation for becoming a successful digital bank and therefore

have made this an integral part of our strategy. Standardisation and automation give us a shorter time to

market, quicker time to volume, consistently high quality and improved productivity. Scalable technology

and operations also help us attract and retain talent by offering employees the opportunity to not only

work with technology but also collaborate across countries and make an impact globally. By creating

foundational and scalable capabilities and services, we allow the business to grow at marginal costs.

Scalable technology

Our scalable technology strategy provides a foundation for the modular components we use to build and

operate propositions. It allows ING countries to introduce propositions more quickly and easily, while

providing the opportunity to add local flavour.

The technology is divided into three parts: ING's private cloud infrastructure (IPC), our engineering pipeline

(OnePipeline) and our banking technology platform, with its extendable and reusable services and

components. Given its flexibility and scalability, ING has chosen for a hybrid cloud strategy, i.e. using public

cloud providers in addition to IPC. Cloud computing is an important component for scaling our digital

capabilities. IPC is where we store and manage applications and data such as channel applications, core

bank systems and other banking applications. We measure IPC adoption by the percentage of physical

cores in IPC compared to the total number of physical cores in data centres globally. By the end of 2022, we

ran 52 percent of our workloads on (private) cloud. By 2025, we expect that figure to have risen to at least

70 percent.

OnePipeline, our continuous integration and delivery pipeline, provides engineers with a consistent and

secure global capability to develop, test and deploy software. We invest heavily in infrastructure, test and

risk automation. Today, about 48 percent of applications are maintained through the pipeline. We measure

the pipeline's adoption by the numbers of applications onboarded to the pipeline (used to develop and

deploy to production), compared to the total number of applications registered in our IT management

platform across all ING entities. We exclude those applications where a pipeline is not applicable, such as no-

code or SaaS applications. Our ambition is to have 90 percent of applications on OnePipeline by 2025.

Touchpoint is part of our banking technology platform. In 2022, approximately 60 percent of customer

logins used Touchpoint. By 2025, we expect that figure to be over 90 percent. By using common

architecture and shared services, engineers can create propositions without the ‘heavy lifting’. Touchpoint

provides modularity and a set of reusable shared services, freeing up capacity for engineers to create more

value for customers and employees. We measure customer online traffic on the platform through the

consumption of Touchpoint authentication services, represented by the number of Touchpoint-enabled

unique customer authentications against the total number of unique customer authentications (Retail

countries/Wholesale Bank).

Payment & Settlement Services

In 2022, as part of our strategy, we have bundled our strategic payments and settlement services (PSS) into

a new unit under CTO (Chief Technology Office). This unit covers the full scope of payment and settlement

services for Retail and Wholesale Banking and benefit from our scalable tech and ops. It provides high

quality and efficient payment, settlement, and open banking services, leveraging our scalable payment and

settlement solutions.

Through an increased focus on these payment and settlement services, we allow our business to provide a

superior customer experience. We aim to further consolidate most of our payment services on this platform,

improving quality and reducing price per transaction. As of 2022, PSS processed well over three billion

transaction (65 percent of total volume) through our central payment engines.

Scalable operations

Our scalable operations are driven by digitalisation and capability hubs. These focus on becoming fully STP,

leveraging expertise and using scale and sharing productive, quality services across the ING network.

Capability hubs provide shared solutions to ING Bank worldwide. The hubs are mainly located in the

Netherlands, Poland, Romania, Slovakia and the Philippines. In 2022, 32 percent of operations were carried

out with the support of these hubs, compared to 23 percent in 2021. Our aim for 2025, is to have at least 50

percent of operational work carried out by the hubs.

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ING Bank Annual Report 202224

By digitalising client contacts, accelerating remote advice and increasing the use of chatbots, inbound calls

to contact centres were reduced by 12 percent in 2022. We aim for 30 percent in 2025, which we expect will

represent an annual gross cost saving of around €50 million. Similarly, by automating and centralising our

KYC activities this year, we reached 49 percent of know your customer ( KYC) in our hubs and expect to

increase that to 60 percent by 2025 through more consolidation, automation and straight-through

processing.

Staying safe and secure

Trust is the starting point, the most basic requirement, for all stakeholders. That’s especially true for a

digital-first bank like ING. People trust us with their money and with their data. Keeping it safe, and

maintaining this trust is crucial (see also 'Risk management').

Digital access

In a digital society, customers expect to have round-the-clock access to digital channels including their

banking services. To live up to their expectations, we strive to provide uninterrupted access to our banking

services. In Retail Banking in 2022, our digital channel availability for the Netherlands and Belgium was

99.38%. For Wholesale Banking clients worldwide, the availability for our Inside Business payments channel

was 99.97%, and for our Inside Business Connect channel (file transfer) the availability was 99.99%. These

figures are based on outputs of availability monitoring processes, which are run with a high frequency per

hour. The 2022 results are in line with the 2021 channel availability results.

Anti-money laundering and KYC

Knowing who we do business with helps to protect our clients, ING and the financial system against financial

economic crimes. As part of our continuing anti-money laundering (AML) efforts, we carry out customer

due-diligence checks and monitoring transactions for unusual or suspicious activities. We also assess the

projects and companies we finance for environmental and social risks and aim to steer clear of activities in

certain sectors or industries that could be harmful to people or the environment. In 2022, we strengthened

our KYC with, for example, increased staff, upscaled skills and additional local requirements where needed.

Read more about KYC and AML in 'Compliance risk' in 'Risk management'.

Cyberthreat landscape

As a gatekeeper to the financial system, we have an important role in protecting society against crime.

Cybercrime remains a continuous threat to companies in general and to financial institutions in particular.

Ransomware is still one of the prime threats, with phishing the most common way that attackers gain

access to a company’s system or network. Other high-ranking threats are attacks against availability, or

Distributed Denial of Service (DDoS) attacks. However, the geopolitical situation resulted in increased

awareness of cybersecurity threats, resulting in more attention for the global cybersecurity domain. While

we still observe an increase in the number of threats, we also see a wider range of ways that attackers

infiltrate company systems, such as exploiting unresolved vulnerabilities, notably 'zero-day exploits', i.e.

vulnerabilities that are exploited before a patch is available.

Cybersecurity incidents

During 2022, one attack impacted our availability of digital services in Germany. Channels were unavailable

for less than two hours. No other cybersecurity incidents were identified in 2022 that resulted in significant

operational downtime, data theft or financial loss.

Different types of cyberthreats are not only relevant for the financial industry, but are increasingly hitting

their supply chains. ING continues to invest in cybersecurity capabilities in all domains (prevention,

detection, response and recovery).

Preventative measures

Being cybercrime resilient is a high priority. We continuously test our IT and organisational resilience, and

perform crisis management and red-team exercises to improve our response to DDoS and targeted attacks.

Cybersecurity risks from supplier’s monitored and mitigation is initiated where needed. ING maintains a

strong global cybercrime alliance within the financial industry and government institutions to monitor

trends.

ING recognises the value of an effective regulatory framework and is in favour of cybersecurity being led

more by actual cyberthreats and principles and less by prescriptive rule-based compliance. The adoption of

threat-led penetration testing in the EU’s new Digital Operational Resilience Act, which also ensures

continuity of business, is a good example. Testing critical systems on real-life threats helps entities to gain

insights. Our staff awareness and training programme is regularly updated with the latest cybercrime

trends and prevention measures.

We have a responsible disclosure procedure for security researchers that may find issues in our business

applications or infrastructure.

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ING Bank Annual Report 202225

Identity and access management (IAM)

Identity and access management (IAM) is an important element in our control framework to prevent and

mitigate the risk of unauthorised access to IT systems and the data processed and stored therein. ING has

IAM global processes and controls in place which are periodically reviewed and tested. For more information

go to 'Non-financial risk section' in 'Risk management'.

Fraud landscape

Types of fraud are also evolving. As the digital world continuously changes, fraudsters have become more

international and their modus operandi more complex. Customers are being deceived in increasingly

sophisticated ways. Online fraud has become a societal problem and in several countries banks have

collaborated with governments, law enforcement entities and other sectors to find innovative ways to

prevent and detect fraud. ING has an important role to play in preventing and detecting fraud in the digital

world and wants to minimise the impact of fraud losses and the number of fraud victims.

We recognise this transformation in the fraud landscape with developments high on our agenda. We

changed our fraud programme to improve its ability to monitor and react to fraud incidents and to adapt

quickly to new fraud methods in a cost-efficient organisation. The global head of Fraud now reports directly

to the global COO, and we have implemented a global delivery organisation (tribe) that brings detection and

response services to all countries. This tribe uses several sources of information, and is able to assess

whether a payment is done by a customer or by a fraudster. Also, we appointed a global head of fraud

investigations and introduced innovative ways to share best practices across domains and countries.

Over 2022, we experienced an increase in the number of fraud incidents, but were able to respond quickly

and adequately, resulting in a reduction of fraud losses compared to last year. The main modus operandi

continues to be the phishing of customer credentials and fraudulent credit card transactions. We also see

that authorised push payment fraud (e.g. impersonation of a bank employee) has become an important

category to focus on. We are increasingly collaborating with peers and other relevant sectors, such as

telecoms companies. More information can be found in the Risk management chapter.

Data privacy, protection and ethics

Customers trust us with confidential information and their personal data. It’s important that we maintain

that trust and keep their data safe from loss or misuse. In an environment that’s increasingly open and

connected, we must be ever more vigilant. ING is bound by global and local data protection laws, which can

differ from country to country. We are transparent about what we do with the personal data of customers,

employees, suppliers and business partners.

Our approach can be summarised as ‘the right people use the right data for the right purpose’. In line with

the EU’s general data protection regulation (GDPR), we aim to only process personal data to support our

business and in line with applicable legislation. Data controllers or processors who want to transfer personal

data outside of the European Economic Area (EEA) must ensure that the data subject is granted a level of

protection equivalent to that guaranteed by GDPR. More information can be found in the Privacy Statement

on our website.

In 2021, following the Schrems II ruling by the EU's Court of Justice in 2020 on the lawfulness of Privacy

Shield, the EU-US personal data transfer mechanism, ING launched its own transfer impact assessment with

necessary updates made to standard contractual clauses: contracts in scope were completed by the end of

2022. Financial institutions need to walk the fine line between privacy protection and fostering data sharing.

Again, countries differ in their approach. At EU level, there is a clear regulatory trend towards more data

portability and more data sharing. Under the Digital Markets Act, Big Tech will be required to facilitate data

portability and we expect a future proposal to establish PSD2-like data portability for finance.

In addition to complying with regulatory requirements around data use, ING assesses potential ethical

questions, taking into account the rights and interests of our stakeholders, to verify whether we use data in

a responsible way. Global and local data ethics councils guide our ethical decision-making and help to apply

data ethics consistently.

As ethical standards can evolve over time, we closely monitor regulatory compliance, societal developments

and potential new requirements to gain an ‘outside-in’ view on data ethics. We have assessed the impact of

the EU's upcoming artificial intelligence legislation related to ethics and established an appropriate

implementation plan. Everything we do is guided by ING’s Orange Code, which describes the values and

behaviours that underpin our way of working, and which puts integrity above all. Read more in 'Compliance

risk', in the Risk management chapter. Building on the Orange Code is ING’s Global Code of Conduct. We

encourage employees to speak up when they are confronted with unethical or illegal behaviour and provide

a variety of reporting channels, including via their manager, local compliance officer or an ING whistleblower

reporting officer. ING also has external and anonymous whistleblower channels. We take great care to

protect the identity of whistleblowers and the confidentiality of their reports to protect them against

potential retaliation. We believe that trust, integrity and ethical behaviour are at the core of any reliable

business. They go hand in hand with satisfied customers.

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ING Bank Annual Report 202226

Unlocking our people's full potential

Ultimately, we are making the difference through the activities and actions of our people. We seek to

attract, develop and retain the best people by creating an environment where they can unlock their full

potential. ING's sustained success is founded on the continued commitment of our talented people. We

unlock our people's full potential by ensuring all employees have skills and capabilities that equip them for

the future, by promoting a diverse, inclusive and vitalised culture, where everyone feels they belong, and by

providing an excellent employee experience.

In the past few years, our people have faced unprecedented challenges during the global pandemic. It has

fundamentally changed the way people view their lives and has shifted employee expectations significantly.

The hybrid way of working has worked well for ING. The pandemic allowed us to accelerate our

digitalisation, we collectively pulled together and employees continued to deliver for our customers.

We continue to support our people by offering hybrid working to make sure they have the autonomy to

better balance their professional and personal lives. Eighty-five percent of our people strongly endorse

hybrid working.

We care about giving our people this flexibility, especially since the changing dynamics following the

pandemic has led to a change in employee expectations. It is important that our people feel supported and

that, as well as a competitive total reward package, they receive good development opportunities and

autonomy. This is reflected in our people offer, which is intended to create clarity on what we offer, and

what we ask in return.

It matters to us that our people are engaged and that we have an open dialogue with them. We use a

continuous listening approach, our Organisational Health Index (OHI), to get an ongoing sense of how our

people are doing and how they feel and we make sure we act on that feedback. A full OHI was held in

October, with a record number of participants: over 41,000 people, or 69% of our total workforce. On a

global level, more colleagues indicated that they had clarity on our strategy, shared ING's vision and felt

included in decision-making. Risk management remained one of our strongest practices and saw further

improvement since 2021. We will use the outcomes of this survey to define action plans and priorities for

2023.

As well as making sure our people are engaged, we aim to unlock our people’s full potential by focusing on

three elements: 'skills and learning', 'diversity, inclusion and vitality', and 'employee experience'.

Skills and learning

We want to attract, develop and retain the skills we need to deliver great performance. In 2022, we provided

new tools to upskill and reskill our people, built the capabilities of our leaders and developed the pipeline of

leaders for the future.

Upskilling our workforce

We want to equip our people to grow, upskill and reskill themselves, so that both our people and our

business have the capabilities that are needed now and in the future. Together with an external partner, we

launched a programme to boost learning content to 30 ING countries and the four ING Hubs (Philippines,

Poland, Romania, Slovakia). It offers a wide range of learning courses in My Learning – ING’s open, digital

learning platform that gives employees access to our complete learning offering in one location.

ING wants to be an organisation where learning and development play a major role and where our people

feel supported in developing themselves. This is part of our culture. Development increased by 13%, with

1,317,760 courses completed and 1,509,938 learning hours undertaken. Over 44% of all learning completed

was not mandatory, with more people than ever electing to learn new skills and build capabilities relevant to

their job roles and functions.

At ING, we care about everyone being able to unlock their full potential and want to make sure all our

people can access learning and development. We made learning solutions more accessible by

implementing new guidelines for all required learning. We seek to provide digital services and workplace

tools that promote disability inclusion and meet accessibility requirements set out in the Web Content

Accessibility Guidelines (WCAG) 2.1. The WCAG is now our reference standard for all mandatory learning. We

continued to embed this further into all content created for ING.

Building leaders for the future

To have strong leaders and an equally strong pipeline, we completed our annual succession review of the

top 400 roles in the bank. We launched a new programme to accelerate leaders' readiness for bigger, global

roles. Fifty-four percent of the talented participants in this programme were women and 10 countries were

represented. We continued to build our internal talent pipeline through our early careers approach. We

hired 81 trainees under our International Talent Programme under eight tracks: WB, Retail Banking, IT,

Finance, Risk, HR, Operations & Change and Analytics.

We continued to strengthen our leadership offering through our Leadership Experience, which aims to

develop greater leaders and better managers who can engage and grow talent and enhance team

performance, and the Leadership Fundamentals programme, which aims to develop the foundational skills

managers need to help themselves and their teams to be successful. Some 840 managers joined the

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ING Bank Annual Report 202227

Leadership Experience and over 390 colleagues from 25 countries participated in the fully digital

programme of our Leadership Fundamentals.

Diversity, inclusion and vitality

ING is committed to attracting, developing and retaining a workforce that reflects the customers and

communities we serve. We believe that a diverse, inclusive and thriving culture makes people want to join

and stay, and helps create an atmosphere where people can speak up, making us safer and more secure as

a bank.

We introduced a 70% principle in 2018, which means we strive for no group or level to be comprised of more

than 70% of the same gender, nationality or age group.

In addition to the broader benefits of a more gender-diverse senior management team - for our business,

employees and customers - increasing representation of women in senior management is foundational to

addressing our gender pay gap (i.e. the difference between the average remuneration of men and women),

something ING committed itself to in 2022.

We deepened our focus on gender diversity by introducing a new target of at least 30% female

representation in our senior management by 2025 and 35% in 2028. In 2022, that figure was 29%. The

variable pay of our MBB is linked to delivery of these internal targets on gender diversity. We also defined

'senior management' consistently, in line with our Global Job Architecture (GJA, ING's global job catalogue).

To make sustainable improvements in gender diversity in senior management, we are changing how we

hire, progress and retain talented women, with a bank-wide action plan introduced in 2022. For instance, by

the end of 2022, we put a requirement in place with external recruitment firms to provide gender diverse

candidate lists. We also use a structured and objective hiring process and aim to ensure our talent

identification, succession, performance and reward processes are equitable and mitigate the risk of gender

bias. We also created a more gender-inclusive and family-friendly workplace. We promote support for

parental leave and flexible working to make sure all parents have the chance to be successful professionally

while managing their family lives. The pandemic has showed us that our people continued to deliver for our

customers and that flexible working enhances the lives of employees – especially those with care-giving

responsibilities – and this matters to us. This is why we remain an advocate of hybrid working and give our

people that flexibility.

To build a strong internal pipeline of talented women into leadership roles, we support and nurture top

talent. We introduced a new leadership acceleration programme, with a 54 (female)/46 (male) percent

gender split in the participant group and content that addresses gender-specific barriers to progression. We

monitor the gender balance in our succession pipelines. We also extended targets to increase gender

representation from our current top senior management roles to the leadership pipeline below. To

understand women’s experiences of ING, we launched a new, globally consistent exit survey, which will be

analysed by gender, to identify the reasons for leaving and to make sure we take action to prevent

regrettable loss of female talent.

To understand the experiences of all our employees, we use the OHI survey and psychological safety index.

We identify different experiences based on gender and other organisational and personal demographics

and then delve deeper to determine further actions. One of the ways we create a more equal and inclusive

workplace is through external and independent review. ING is one of the 418 firms recognised in the 2022

Bloomberg Gender Equality Index (GEI). The Index offers public companies the opportunity to disclose

information on how they promote gender equality across five separate areas: female leadership and talent

pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies, and pro-women

brand. In 2022, ING scored 70.35%, a small improvement on the 70.26% score from 2021. This is the seventh

year we have been included in the listing with feedback guiding our future actions.

In addition to our action on gender diversity, 32 thriving employee networks help us advance our diversity

and inclusion efforts. These networks raise awareness and create connection, focusing on gender, LGBTIQ+,

race and ethnicity, cultural diversity, accessibility and age. To celebrate the diversity of our global workforce,

we held our fourth consecutive Global D&I Day, with 26 countries participating in over 120 events.

ING is a founding partner of Workplace Pride, dedicated to improving the lives of lesbian, gay, bisexual,

transgender, intersex, and queer (LGBTIQ+) people in workplaces worldwide. Its activities include the

Workplace Pride Global Benchmark. In 2022, ING scored 78.8% and was recognised as a Workplace Pride

Ambassador.

Vitality

We care about our people. We seek to encourage and support healthy and effective working, so they can

deliver on ING’s strategic priorities and thrive in life. Our approach to this has developed since the pandemic

as our way of working has evolved.

We seek to we embed vitality in our working culture and promote healthy working habits. We offer

employee assistance programmes, toolkits for managers and employees, and various locally tailored

programmes to support the physical and mental vitality of our people. We also promote learning content on

vitality topics on our My Learning platform. To reinforce this priority, we have also created a new leadership

position. Our global head of Vitality works across our bank-wide network to enhance the vitality and

resilience of our people.

Many vitality initiatives are locally driven and specifically tailored to local needs. For instance, the My vitality

platform, launched in the Netherlands, Belgium and Luxembourg in 2020. It inspires and supports over 7,500

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ING Bank Annual Report 202228

registered users with high-impact programmes on physical, mental, emotional energy and purpose. In total,

My vitality users registered over 4.8 million km via smart devices in walking, running, cycling, swimming and

any other way to move forward.

In Germany, Turkey, the UK and the US, local initiatives were introduced including workshops on physical

and mental vitality, sport events and health check-ups.

The situation in Ukraine required support for many colleagues, especially those in Eastern European

countries. Since the war started, ING has organised fundraising, arranged support for employees and offered

assistance programmes to employees and their families. Additionally, employees in the countries

neighbouring Ukraine voluntarily hosted colleagues and their family members.

Employee experience

Providing a superior customer experience is a strategic priority. This matters just as much for employees

and we are therefore focused on continuing to improve our employee experience. We aim to provide

personal, easy, and efficient services that encourage our people to unlock their full potential and be the best

they can be. In 2022, we continued to digitalise our people services with a new virtual assistant (available for

employees 24/7 in the Netherlands, Poland hubs and Manila hubs) and the introduction of our HR system

Workday to 60% of all employees. We also continued to review and improve critical moments in the

employee journey such as onboarding and international assignments. We started to focus on high-volume

services such as expense reimbursements, job changes and people recruitment, which are major

contributors to a superior employee experience. Finally, we continued to safely manage our HR operations

to protect employee data and keep people processes compliant.

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ING Bank Annual Report 202229

Our performance

Financial developments

In 2022, ING Bank performed well, despite challenging operating conditions which had a far-reaching impact

on people’s lives, on societies and on economies, causing energy and price shocks and driving up inflation

and interest rates. ING Bank’s net result declined to €3,667 million from €4,770 million in 2021, fully due to

higher net additions to loan loss provisions, which had been at a very low level in 2021. The effective tax rate

in 2022 was 31.4%, up from 27.7% in 2021. The higher effective tax rate was caused by the impact of the

following non-deductible items for corporate income tax purposes in 2022: hyperinflation accounting loss in

Turkey, impairments on TTB and interest expenses in various countries.

Income was supported by a growing primary customer base and an increase in lending and deposits. Our

global retail customer base (excluding France, after the announced exit from the retail market) remained

flat at 37.2 million, but even more customers chose ING as their primary bank. In 2022, we gained 585,000

primary customers, bringing the total number to 14.6 million, which was 4% higher than at year-end 2021

(excluding France). Net core lending growth (adjusted for currency impacts and excluding Treasury and the

run-off portfolios) was €18.2 billion in 2022, and net core deposits growth was €25.1 billion.

In our P&L, we saw the benefits of the rising rate environment, which boosted net interest income. This was

on top of the structurally higher fee base, resulting from our efforts to diversify income. All these positive

developments were largely offset, however, by several exceptional income items in 2022 (including the

impact of Turkey hyperinflation, a mortgage moratorium in Poland and the unwinding of a deposits hedge

in Belgium and our TLTRO-related derivative position), resulting in an income growth of 0.3% to €18,546

million.

Net interest income rose 1.0% to €13,745 million. The increase was driven by higher margins on liabilities,

following the return of positive interest rates in 2022. This was only partly offset by lower margins on

mortgages and other lending, as client rates generally track the higher cost of funds with a delay and

prepayments on mortgages declined. After ECB’s decision to change the conditions for the TLTRO

programme, we had to unwind our TLTRO-related derivative position. Combined with the remaining TLTRO

benefit until 23 November 2022, this led to a net TLTRO impact of €-87 million compared to a net benefit of

€483 million in 2021. Net interest income in 2022 also included a €-343 million impact from new regulation

in Poland for mortgages. ING Bank’s full year net interest margin declined to 1.34% from 1.39% in 2021.

Excluding TLTRO in both years and the impact of the Polish moratorium, the net interest margin showed an

increase of 4 basis points year-on-year.

Net fee and commission income rose 2.0% to €3,586 million. Fee income for daily banking products strongly

increased, reflecting growth in primary customers, an increase in payment package fees and new service

fees. Lending fees also increased, driven by lending growth in Wholesale Banking. This was partly offset by

lower fees from investment products and from Global Capital Markets, reflecting adverse market conditions.

Total investment and other income decreased to €1,215 million in 2022 from €1,354 million in 2021. This

included the largest part of the impact of Turkey hyperinflation, €-288 million to unwind a macro fair value

hedge of deposits in Belgium (of which €-247 million in Retail Banking and €-41 million in Wholesale

Banking) and €165 million of impairments on our stake in TTB, while 2021 had included a €72 million

recognition of a receivable recorded in Corporate Line. Other income in 2022 was supported by a €125

million gain from the transfer of our investment business in France, a €67 million gain from a legacy entity

in Belgium and income from the sale of a non-performing loan portfolio in Spain.

Operating expenses decreased by €2 million to €11,193 million. Expenses in 2022 included €1,250 million of

regulatory costs, slightly lower than in the previous year. Expenses in 2022 furthermore included €325

million of incidental items, largely related to restructuring provisions and impairments and also including

€75 million for adding the interest-on-interest effect to the compensation for customers on certain Dutch

consumer credit products. Incidental items in 2021 had amounted to €522 million, mainly reflecting a €180

million provision for the compensation to Dutch customers with certain consumer credit products and

redundancy provisions and impairments related to the announced exit of the retail banking markets in

France and the Czech Republic. Excluding regulatory costs and incidental items, expenses were up 2.2%,

impacted by high inflation, which was mainly visible in staff costs. This was partly offset by continued cost-

efficiency measures and earlier actions taken to change the footprint. The cost/income ratio was 60.4%

versus 60.6% in 2021.

Net additions to loan loss provisions increased to €1,861 million, or 29 basis points of average customer

lending, compared with only €516 million, or 8 basis points, in 2021. Risk costs in 2022 were heavily

impacted by the Russian invasion in Ukraine, which led to a net addition of €533 million on our Russia-

related exposure. The remainder was mainly due to an increase in Stage 3 individual risk costs, particularly

in Wholesale Banking, and new overlays to reflect the risks from secondary impacts, such as an increase in

energy prices, higher interest rates and inflation, as well as supply chain disruptions.

The return on IFRS-EU equity of ING Bank decreased to 8.2% in 2022 from 10.1% in 2021.

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ING Bank Annual Report 202230

Retail Banking

Total Retail Banking

In 2022, Retail Banking showed a good commercial performance. However, net result declined 5.9% to

€2,862 million due to the impact of exceptional items in income and higher risk costs in 2022. The result

before tax decreased 6.3% to €3,983 million.

Income decreased by €171 million, or 1.4%, and this included the negative impact of unwinding our TLTRO-

related derivative position in 4Q2022, as a result of ECB’s decision to change the conditions for the TLTRO

programme. The net TLTRO impact in 2022 was €-123 million compared to a €152 million benefit in 2021.

Income in 2022 was also impacted by €-563 million of exceptional items, consisting of €-343 million impact

from the introduction of the Polish mortgage moratorium, €-247 million to unwind a macro fair value hedge

in Belgium and €-165 million for impairments on our stake in TTB, only partly offset by €125 million income

from the transfer of our investment business in France and a €67 million gain from a legacy entity in

Belgium. Excluding TLTRO and those exceptional items, income rose 5.5%. The increase was mainly in net

interest income on liabilities following central bank rate increases while deposit tracking was still limited. Net

interest income on lending products declined, reflecting delayed tracking of higher cost of funds in client

rates as well as reduced levels of prepayments on mortgages. Net core lending growth, which excludes

currency impacts, Treasury and the run-off in Westland Utrecht Bank and France (as from the second

quarter of 2022), was €15.8 billion, of which €11.2 billion was in residential mortgages, largely in Germany.

Net core deposits growth (also adjusted for the run-off in France) was €18.9 billion in 2022, primarily in the

Netherlands. Net fee and commission income rose 2.5%, driven by a strong increase in daily banking

products, reflecting higher package fees, recovery of international payments and the introduction of new

fees. This compensated for lower fees from investment products due to a decline in stock markets and

subdued trading activity.

Operating expenses declined by €140 million, or 1.8%, compared with 2021. Expenses in 2022 included €233

million of incidental items, largely related to restructuring provisions (mainly in Belgium and France) and the

addition of the interest-on-interest effect to the compensation for customers of certain Dutch consumer

credit products. In 2021, incidental items had amounted to €455 million, primarily reflecting redundancy

provisions and impairments related to the decision to exit the retail banking markets in France and the

Czech Republic and provisions in the Netherlands for the closure of branches and the compensation for

certain consumer credit products. Expenses excluding regulatory costs and incidental items were well-

contained, despite inflationary pressure, and increased 0.8%. The cost/income ratio was 62.0% in 2022

compared with 62.3% in 2021.

Net additions to loan loss provisions for Retail Banking increased to €639 million, from €399 million in 2021,

but with 14 basis points of average customer lending remained well below the through-the-cycle average.

Risk costs in 2022 included €431 million of Stage 3 provisioning and €208 million of net additions in Stage 1

and 2, and were mainly recorded in Poland, Belgium and Germany.

Market Leaders

Retail Netherlands

The result before tax of Retail Netherlands increased 4.0% to €2,014 million from €1,936 million in 2021. This

increase was attributable to lower expenses, mainly due to lower incidental cost items, partly offset by

lower income and limited risk costs, after a net release in 2021.

Total income declined by €66 million to €4,196 million, fully due to a net TLTRO impact of €-78 million

compared to a €53 million benefit in 2021. Excluding TLTRO, income rose 1.5%. Net interest income

excluding TLTRO declined 8.4% due to lower margins on lending products, reflecting the lengthening of the

duration of the book and lower prepayment penalties. This was partly offset by higher liabilities income as

margins improved and volumes increased. Net core lending (which excludes Treasury products and a €0.8

billion decline in the Westland Utrecht Bank run-off portfolio) grew by €3.0 billion in 2022, of which €2.2

billion was in residential mortgages and €0.8 billion in other lending. Net core deposits growth (excluding

Treasury) was €12.9 billion, mainly in savings accounts. Net fee and commission income strongly increased

by €121 million, or 15.7%, mainly due to higher fee income from daily banking products, supported by

increased fees for payment packages and new service fees for business banking. Investment and other

income rose by €216 million, mainly attributable to higher results from Treasury-related products.

Operating expenses declined to €2,115 million from €2,403 million in 2021, mainly due to a drop in

incidental cost items. 2022 included a €75 million provision for adding the interest-on-interest effect to the

compensation for customers on certain Dutch consumer credit products, while 2021 had contained €289

million of incidental costs. Excluding these incidental items, expenses declined by €73 million, or 3.5%,

mainly driven by lower staff and office-space-related expenses, as well as lower regulatory costs.

The net addition to loan loss provisions was €67 million, or 4 basis points of average customer lending,

compared to a net release of €76 million, or -5 basis points, in the previous year. The limited net additions in

2022 were mainly related to business lending and consumer lending, while risk costs for the mortgage

portfolio were negligible.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our performance

ING Bank Annual Report 202231

Retail Belgium

Retail Belgium includes ING's retail operations in Luxembourg.

The result before tax of Retail Belgium declined to €223 million compared with €583 million in 2021. The

decline was almost fully due to an impact of €-247 million to unwind a macro fair value hedge and €97

million of incidental expenses in 2022.

Income fell by €328 million to €2,147 million from €2,475 million in 2021. Net interest income was 4.5%

lower at €1,668 million, including a net TLTRO impact of €-29 million compared to a €76 million benefit in

2021. Excluding TLTRO, interest result rose 1.6%, driven by higher liabilities income as margins improved,

partly offset by margin compression on lending products due to higher funding costs. Net core lending

(excluding Treasury) increased by €3.6 billion in 2022, of which €1.4 billion was in mortgages, and €2.2

billion in other lending. Net core deposits (excluding Treasury) were flat on 2021, as an increase in savings

and deposits was offset by a decline in current accounts. Net fee and commission income decreased by €8

million, or 1.5%, as lower fees on investment products were only partly compensated by price increases for

payment packages. Investment and other income dropped by €241 million, due to the €-247 million impact

of the hedge unwinding in 2022 and a €25 million capital gain on the sale of an associate in the prior year,

partly offset by a €67 million gain from a legacy entity in 2022.

Operating expenses increased by €119 million and included €97 million of incidental costs which were

mostly restructuring costs related to the optimization of the branch network. Excluding these incidental

items, cost growth was limited to 1.3% as the impact of automatic salary indexation could largely be

compensated by FTE reductions and lower IT expenses.

The net addition to the provision for loan losses decreased to €139 million, or 15 basis points of average

customer lending. In 2021, the net addition had been €225 million, equivalent to 25 basis points. The decline

year-on-year was driven by lower risk costs in the mortgage and consumer lending portfolios.

Challengers & Growth Markets

Retail Germany

Retail Germany included ING's retail operations in Austria until the sale in December 2021.

The result before tax increased 14.6% to €901 million compared with €786 million in 2021, driven by higher

income and lower expenses, partly offset by increased risk costs.

Total income rose 8.1% to €2,172 million from €2,009 million in 2021. Net interest income increased 15.1%,

supported by significantly higher margins on liabilities. The increase was only partly offset by lending

margin pressure, a €35 million lower net TLTRO impact (€-19 million in 2022 compared to a €16 million

benefit in 2021) and the impact of the discontinuation of ING’s Retail Banking activities in Austria in the

previous year. In 2022, net core lending growth (which excludes Treasury products and the Austrian run-off

portfolio as from the second quarter of 2021) was €6.1 billion, almost entirely in residential mortgages. Net

core deposits rose by €0.8 billion as a net outflow in the first half of the year was followed by a strong inflow

in the second half of the year. Net fee income declined by €60 million, or 12.1%, mainly in investment

products after a record-high level in 2021, partly compensated by higher fees from daily banking.

Investment and other income increased by €4 million, as a €26 million one-off loss related to the transfer of

our retail operations in Austria recorded in 2021 was partly offset by lower Treasury-related revenues in

2022.

Operating expenses decreased by €34 million, or 2.9%, to €1,140 million in 2022, reflecting savings following

the discontinuation of the Austrian retail banking activities as well as lower regulatory costs due to an

adjustment of the deposit guarantee contributions in 2022. These decreases were partly offset by higher

staff costs and an increase in marketing expenses to support customer growth, as well as €10 million of

incidental items for staff allowances and restructuring costs.

Net additions to loan loss provisions increased to €131 million (13 basis points of average customer lending)

compared with only €49 million (5 basis points) in 2021. Risk costs in 2022 were primarily related to

consumer lending.

Retail Other

Retail Other consists of the Other Challengers & Growth Markets, including our bank stakes in Asia.

Retail Other’s result before tax declined to €845 million, from €949 million in 2021, mainly due to higher

regulatory costs in Poland and higher risk costs.

Total income rose by €61 million to €3,663 million. Net interest income was up 0.5% to €2,726 million,

despite a €-343 million impact from new mortgage moratorium regulation imposed by the Polish

government. Excluding this impact, net interest income increased 13.2%. This increase mainly reflected

higher margins on liabilities, notably in Poland, Australia and Spain, following increases in central bank

interest rates. Interest income on lending products declined in most of the countries due to tighter lending

margins. Net customer lending (adjusted for currency effects, Treasury and the run-off portfolio in France as

from the second quarter of 2022) grew by €3.2 billion in 2022, with growth in all countries. Net core deposits

growth (also adjusted for currency impacts and Treasury as well as the France run-off portfolio) was €5.2

billion, primarily driven by net inflows in Spain, Australia and Poland. Net fee and commission income rose

by €5 million to €535 million, supported by higher daily banking and insurance fees. These increases were

largely offset by lower fees from investment products, reflecting low stock markets and subdued trading

activity and the impact of ING’s exit from the French retail market. Investment and other income rose to

€402 million and included €125 million income from the transfer of our investment business in France and

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our performance

ING Bank Annual Report 202232

€-165 million for impairments on ING’s equity stake in TTB. Excluding these exceptional income items,

investment and other income increased by €81 million, mainly due to higher Treasury-related income and

the proceeds from the sale of a non-performing loan portfolio in Spain.

Operating expenses rose by €64 million, or 2.6%, to €2,516 million. In 2022, expenses included €51 million of

incidental items, mainly consisting of restructuring provisions related to the discontinuation of our retail

banking activities in France and the Philippines and the refocusing of our partnership for insurance

propositions. 2021 had included €166 million of incidental costs, mainly consisting of restructuring

provisions and impairments related to ING’s decision to exit the retail banking markets in France and the

Czech Republic. Regulatory costs increased by €100 million as 2022 contained a €99 million contribution to

the new Institutional Protection Scheme in Poland. Excluding incidental items and regulatory costs,

expenses increased by €79 million, primarily attributable to inflationary pressure across all markets,

investments in operational process improvements in Australia and €21 million for a litigation provision in

Spain.

The net addition to loan loss provisions amounted to €302 million, or 28 basis points of average customer

lending, in 2022. In the previous year this had been €202 million, or 20 basis points. Risk costs in 2022 were

primarily attributable to net additions in Poland and Spain.

Wholesale Banking

In 2022, Wholesale Banking turned in a strong commercial performance. This was fully offset, however, by a

sharp increase in risk costs, partly due to the Russian invasion in the Ukraine and compared with an

exceptionally low level in 2021. Therefore the net result was 36.7% lower at €1,358 million. The result before

tax decreased 30.7% to €1,991 million from €2,874 million in 2021.

Total income rose 6.9% to €6,325 million in 2022 compared with €5,916 million in 2021, primarily reflecting

income growth in Daily Banking & Trade Finance and Financial Markets. Net interest income increased by

€109 million, or 2.6%, driven by Payments & Cash Management which benefited strongly from higher

interest rates. The increase was largely offset by a €168 million lower net TLTRO impact (which was €20

million in 2022 compared with €188 million in the previous year) and lower interest income in Financial

Markets. The net core lending book (adjusted for currency impacts and excluding Treasury and the Lease

run-off portfolio) grew by €2.4 billion in 2022. Strong growth in Lending was largely offset by a net outflow

in Daily Banking & Trade Finance and in Financial Markets. Net core deposits (excluding currency impacts

and Treasury) increased by €6.2 billion, primarily in Payments & Cash Management. Net fee and

commission income rose by €20 million, or 1.7%, supported by strong fee growth in Lending, which was

largely offset by the impact of a lower deal flow in Global Capital Markets due to adverse market conditions.

Investment and other income surged by €281 million, mainly driven by higher trading results in Financial

Markets, only partly offset by Treasury & Other which included a €-41 million hedge accounting impact in

Belgium.

Operating expenses increased 6.4% to €3,114 million from €2,926 million in 2021. Expenses in 2022 included

€38 million higher regulatory costs and €10 million of incidental items mainly related to restructuring costs,

while 2021 had included a €44 million impairment on Payvision. Excluding these incidental items and

regulatory costs, expenses increased 7.0%, of which 2.8% was FX impacts, reflecting the weakening of the

euro relative to other currencies. The remaining increase was mainly attributable to higher staff costs (due

to CLA increases and indexation), partly mitigated by continued cost-efficiency measures.

The addition to loan loss provisions was €1,220 million, or 65 basis points of average customer lending, while

in 2021 risk costs had been exceptionally low at €117 million, or 7 basis points of average customer lending.

Risk costs in 2022 were significantly impacted by the Russian invasion in Ukraine, which led to a net addition

of €533 million on our Russia-related exposure. The remainder was mainly due to an increase in Stage 3

individual risk costs, partly as a result of a more negative macroeconomic outlook.

Lending income increased slightly to €3,157 million. Net interest income declined by €17 million fully due to

a €57 million lower net TLTRO impact. Excluding TLTRO, interest result increased 1.6% as higher average

volumes more than compensated for lower interest margins. Net fee and commission income increased by

€88 million or 19.3%, reflecting significantly higher fee income from several sectors. Investment and other

income declined by €42 million, mainly due to negative fair value adjustments and secondary sales

discounts.

Income from Daily Banking & Trade Finance increased by €352 million to €1,662 million, predominantly

driven by Payments & Cash Management, which benefited strongly from higher interest rates, and

furthermore supported by Bank Mendes Gans.

Income for Financial Markets increased by €122 million to €1,226 million, supported by higher trading

results, especially in forex and money markets which benefited from volatility on the markets following

interest rate hikes, the strengthening of the US dollar and inflationary pressure. Commission income

declined due to a lower deal flow in Global Capital Markets, reflecting a slowdown in the market.

Income for Treasury & Other decreased by €94 million due to a net TLTRO impact of €-51 million in 2022

(compared to a benefit of €4 million in the previous year), a €-41 million hedge accounting impact to

unwind a macro fair value hedge in Belgium and a €28 million gain on an investment in an associate

recorded in 2021. This was partly offset by mark-to-market gains from credit default positions in 2022.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our performance

ING Bank Annual Report 202233

Our leadership - members of the Management Board Banking

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our leadership

ING Bank Annual Report 202234

Our leadership - members of the Supervisory Board

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Our leadership

ING Bank Annual Report 202235

Supervisory Board report

In 2022, the Supervisory Board (SB) and its committees focused on

overseeing and constructively challenging management on the update

of ING's global strategy. The updated strategy is built around ING's

purpose of ‘empowering people to stay a step ahead in life and in

business’. The war in Ukraine and the ongoing geopolitical uncertainty

and pressure on the global economy were closely monitored, managing

and controlling risks, while assisting our employees and customers

wherever possible. Emphasis continued to be placed on ING’s risk

culture and further strengthening our global anti-money laundering

(AML) and know your customer (KYC) activities. Sustainability was also a

priority for the SB. To assist with performing its ESG-related duties, the

Supervisory Board appointed an ESG committee.

In 2022, the Supervisory Board maintained a regular dialogue with the Management Board Banking (MBB)

on ING's strategic priorities. Two overarching strategic priorities were defined: giving customers a superior

experience and putting sustainability at the heart of what we do. For more information see the 'Our

strategy' chapter. At the request of the Supervisory Board, deep dives were organised on various topics

relating to strategy. This was the result of one of the priorities agreed by the Supervisory Board for 2022 to

ensure time is spent in meetings on strategy and sustainability, business and financial performance, risk

management and regulatory requirements. The Supervisory Board also monitored the execution of the

strategy by discussing the challenges and opportunities of the strategic priorities, countries, business and

projects on a quarterly basis with the MBB.

The year 2022 was marked by the war in Ukraine, which is having a devastating impact on people’s lives and

is threatening international stability and security. The Supervisory Board and its committees closely

monitored the ongoing geopolitical uncertainty and pressure on the global economy and its impact on ING

and its stakeholders. Lower economic growth, exceptionally high inflation and high energy prices have

severely impacted consumers and companies. The MBB provided the Supervisory Board and its committees

with frequent updates on developments in Russia and Ukraine. This included how ING safeguards the safety

and well-being of impacted employees, business continuity and operational resilience, how ING manages IT

and cybersecurity risks, our exposure to Russia and Ukraine and complying with sanctions.

The Supervisory Board is committed to continue working with the MBB on further enhancing and embedding

‘environmental, social & governance’ (ESG) principles into ING’s internal processes and business activities. In

this respect, the Supervisory Board appointed an ad-hoc ESG Committee from among its members to assist

with overseeing ESG-related topics. See 'ESG Committee' for further details.

The Supervisory Board met 15 times in 2022 for its regular meetings. On average, 99% of the Supervisory

Board members participated in the meetings. See the attendance matrix for the Supervisory Board

meetings and committee meetings for more details. The continued high attendance demonstrates that

Supervisory Board members are engaged with ING and are able to devote sufficient time and attention to

overseeing its affairs.


SB Attendance 20221
	SB	RiCo2	AC	NCGcom3	RemCo	ESGcom4
Hans Wijers (chair)	15/15	10/10	7/7	12/12	7/7	3/3
Mike Rees (vice-chair)	14/15	10/10	7/7
Juan Colombás	14/15	10/10	7/7
Mariana Gheorghe	15/15	10/10		12/12	7/7	3/3
Margarete Haase	15/15	10/10	7/7
Lodewijk Hijmans van den Bergh	15/15	10/10				3/3
Herman Hulst	15/15	10/10	7/7			3/3
Harold Naus	15/15	10/10		1/1	6/7
Herna Verhagen5	15/15	2/2		11/12	7/7
Total attendance6	99%	100%	100%	97%	96%	100%

1This SB attendance overview shows the SB (committee) meetings that took place during the year. In addition to these meetings,

there were 12 internal SB meetings in 2022 in view of nomination and remuneration matters, with a total attendance rate of 99%.

These are not shown separately in the overview for year-on-year, like-for-like comparison purposes.

2In 2022, two RiCo meetings were held in combination with the RemCo on remuneration matters that also required a risk view.

3In 2022, one NCGcom meeting was held in combination with the RemCo in view of changes to the management structure of ING Bank

N.V. including the amended constellation of the Management Board Banking.

4Attendance is shown as of the initiation of the ESGcom in the second quarter of 2022.

5Harold Naus participated once in a NCGcom meeting in combination with the RemCo. Herna Verhagen participated twice in a RiCo

meeting in combination with the RemCo.

6The numbers exclude SB observers, if any. If SB members cannot join a meeting they will always receive the meeting materials to

allow them to provide feedback prior to the meetings.

Abbreviations used: SB = Supervisory Board, RiCo = Risk Committee, AC = Audit Committee, NCGcom = Nomination and Corporate

Governance Committee, RemCo = Remuneration Committee; ESGcom = ESG Committee

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Supervisory Board report

ING Bank Annual Report 202236

The Supervisory Board discusses and reconfirms all of its members’ outside positions on an annual basis. It

approves among others, any intended outside positions as and when they occur, to safeguard this level of

engagement.

In addition to the information included in this Supervisory Board report, information on the Supervisory

Board can be found in ‘Our leadership’ and ‘Corporate governance’, which information is deemed to be

incorporated, by reference, herein.

Supervisory Board meetings

The Supervisory Board discussed a wide range of topics during the year. In its deliberations on the various

topics the Supervisory Board considers the customers’ and other stakeholders’ interests in view of ING’s

function in society.

In addition to the topics mentioned in the introduction, the Supervisory Board discussed, among others:

•The economic and political developments and their effects, such as the energy crisis, inflation, shortages

in the economy and the rapidly slowing economy.

•Progress of ING’s performance in the various business lines on key financial and non-financial metrics.

•Diversity and inclusion, including, e.g. the bankwide diversity & inclusion approach and specifically

gender diversity in senior management.

•ESG related matters in relation to strategy, including, among others, sustainability, climate risk and

energy transition.

•The continued impact of Covid-19 on ING’s performance and its stakeholders (e.g. how to empower

customers to remain in charge of their banking and their finances, how to equip employees for a hybrid

way of working in which flexibility is central, and how to help communities to build back better).

•Ongoing supervisory developments, such as the European Central Bank’s Supervisory Review and

Evaluation Process (SREP) and related matters such as the internal capital adequacy assessment process

(ICAAP), the internal liquidity adequacy assessment process (ILAAP) and (climate risk related) stress

testing.

•ING’s financial, non-financial and compliance risks, and in this respect, among other things, ING’s

gatekeeper role and ensuring the security and compliance of the bank through enhancing and maturing

ING’s KYC priorities, supported by structural solutions (see 'Strengthening ING’s global AML/KYC

capabilities' for further details on ING’s AML/KYC measures); and strengthening ING’s risk culture.

•Several topical regulatory themes with a global ING scope such as data strategy and management, IT

and cybersecurity, sourcing, developments in Russia and Ukraine, compliance with sanctions, the KYC

enhancement programme and leveraged transactions.

•The financing of the company in accordance with ING’s capital and liquidity adequacy, ING’s capital plan

and ING’s dividend and distribution policy.

•The audit plans of the internal and external auditor.

•Various nomination and succession planning related matters for the MBB and the Supervisory Board.

•Various remuneration-related matters, such as the annual review of the Reward and Appointment

Framework and the ING Remuneration and Regulations Framework.

•The functioning of the Supervisory Board and its committees and the MBB, supported by annual

collective self-evaluations, and the functioning of their individual members.

The MBB was present at each regular Supervisory Board meeting. For some parts of these meetings,

depending on the nature of the topics discussed, only the chief executive officer (CEO) was present. The

Supervisory Board also had sessions without the MBB prior to its regular meetings when this was justified by

the nature of the topics on the agenda. The purpose of these so-called pre-meetings and Supervisory Board-

only meetings is to allow the Supervisory Board to reflect independently on and consider important matters

in the absence of the MBB.

Outside of the collective meetings, there was frequent interaction between the chairs of the relevant SB

committees and the members of the MBB to ensure that – at all times – everyone was up-to-date on the

most recent developments. Furthermore, the chairs of the Risk Committee and the Audit Committee agreed

that they will continue informal interaction with the chairs of local risk and audit committees of ING’s five

largest subsidiaries to enrich the Supervisory Board dialogue. Also, Supervisory Board members who do not

chair committees were assigned specific focus areas that best fit their skills, knowledge and experience to

further enhance well-informed Supervisory Board decision-making and challenge. The 2022 focus areas

were risk culture, models and stress testing, operational resilience, KYC, ESG (including sustainability and

governance) and IT (including digital and cybersecurity).

Continuous dialogue with stakeholders

ING maintains continuous interaction with stakeholders, and aims to strike a balance between the interests

of all stakeholders, including customers, shareholders, employees, regulators, supervisors and society at

large. In 2022, the Supervisory Board had periodic conversations with various stakeholders. It exercised its

oversight role, which aimed to ensure that, actions resulting from this, were embedded in the organisation

and followed up, including actions related to strategy. The dialogue between ING and external supervisors

and regulators was a standard agenda item for the Supervisory Board throughout the year. This included

several discussions on the results of and follow-up to the annual SREP, through which the ECB aims to

promote a resilient banking system as a prerequisite for a sustainable and sound financing of the economy.

The SREP involves, among others, a comprehensive assessment of banks’ strategies, processes and risks,

and takes a forward-looking view to determine how much capital each bank needs to cover its risks.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Supervisory Board report

ING Bank Annual Report 202237

Strengthening ING’s global AML/KYC capabilities

Keeping ING safe, secure and compliant remains one of ING's top priorities. Since 2017, ING has been

working to strengthen customer due diligence, transaction monitoring and screening in a sustainable way

for the longer term and to better contribute to the fight against financial economic crime through the global

KYC enhancement Programme. Various initiatives have been implemented to further enhance AML/KYC

activity throughout the bank. Among other things, this has led to standardised KYC policies, global KYC

governance and harmonisation of processes, tooling and training. Further developments are captured in the

Financial Economic Crime (FEC) Controls Maturity Programme, which defines and further enhances ING’s

operational long-term FEC control framework to manage and mitigate financial and economic crime risks in

a sustainable, risk-based way. Progress is monitored by and discussed between the SB, management and

the relevant supervisors.

In 2022, the Supervisory Board was updated at least quarterly on developments regarding KYC and relevant

specifics were discussed in more detail. This was facilitated through thematic sessions on various topics such

as, among others, the KYC enhancement programme as agreed with DNB. These sessions also contributed

to the Supervisory Board’s continuous learning.

Permanent education including exchange with the business

It is important for the members of the Supervisory Board, as part of their continuous learning, to participate

in the permanent education and exchange with ING’s business on a regular basis. The latter is aimed at

keeping the SB up-to-date on ING-relevant knowledge, skills and expertise and expanding these where

necessary. It is meant to increase the Supervisory Board’s understanding of and engagement with ING’s

business operations and stakeholders.

The annual knowledge days, which were held on 13 and 14 January 2022, were combined with regular

Supervisory Board meetings and focused on ESG.

As part of the annual business visit, the entire Supervisory Board, together with the MBB, visited ING in

Germany in September 2022. This allowed the Supervisory Board to get a better understanding of local

business challenges and the market opportunities of ING in Germany.

Throughout the year, a number of other educational sessions on specific topics facilitated by relevant

experts were organised for the Supervisory Board. For 2022, a balance was sought between sessions

focused on compliance, ESG, operational resilience and sessions focused on strategic business topics. The

latter included in-depth sessions on (1) ING’s Wholesale Banking business and Retail Banking business,

including Business Banking, (2) technology and IT platforms, (3) digital services and assets and (4) several

country updates. Additionally, thematic sessions were organised to focus specifically on certain themes that

needed further attention and/or to look forward at emerging risks and developments. Furthermore, several

deep dive sessions were organised on selected key topics. Both these thematic and deep dive sessions had a

substantial risk management component and contributed to a more in-depth understanding of the matters

discussed. For more information, see ‘Risk Committee’.

The various educational sessions provided opportunities for Supervisory Board members to interact with

senior management and subject-matter experts. They also interacted in speed-meet sessions. These

meetings were held in person, virtually and in hybrid mode. Such interaction contributes to a better mutual

understanding and alignment on what matters most to ING, its employees and the Supervisory Board. As in

previous years, the Supervisory Board will continue this practice.

Strategy based on long-term value creation

In 2022, ING introduced its updated strategy. The Supervisory Board had an active and continuous dialogue

with the MBB on the strategy update. To successfully serve its purpose and make the difference for people

and the planet, ING will focus on two overarching strategic priorities: giving its customers a superior

experience and putting sustainability at the heart of what it does. ING has also defined four enabling

priorities. ING will focus on (1) providing seamless, digital experience, (2) using its scalable technology and

operations, (3) staying safe and secure and (4) unlocking the full potential of everyone working for ING.

By updating its strategy, ING is constantly adapting to the trends shaping the world around us and

impacting customers, ING and the industry, with the aim of ensuring it seizes the opportunities flowing from

today’s reality and big trends to create long-term value.

The Supervisory Board acknowledges the responsibility it has to consider and balance the interests of all

stakeholders of ING and makes sure to take this into account while delivery on the strategic priorities is

being executed.

Financial and risk reporting

The MBB prepared the financial statements and discussed these with the Supervisory Board. The quarterly

results, including the relevant press releases, were discussed and approved in February, May, August and

November 2022. The full-year 2021 financial results were discussed and approved in March 2022. The

financial statements will be submitted for adoption at the 2023 Annual General Meeting as part of the 2022

Annual Report. KPMG, in its role as ING’s external auditor, audited ING’s 2022 financial statements. As part of

the standard procedures, KPMG declared itself independent from ING, in compliance with applicable rules

and regulations. Read more in ‘Audit Committee’ below.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Supervisory Board report

ING Bank Annual Report 202238

The Supervisory Board was also informed in detail throughout the year of potential financial, non-financial

and compliance risks for ING, including, the crisis with regard to the war in Ukraine, subsequent political and

economic developments in various countries and regions, climate- and ESG related risks, the continued

implications of Covid-19 and updates on (upcoming) regulatory changes. The Supervisory Board discussed

how these and other risks could best be mitigated, which included reviewing stress test results performed by

ING. In addition to internal stress tests and programmes related to known and anticipated risks, ING

released its second integrated climate report in September 2022. It details ING’s progress and targets on

climate alignment in the nine sectors in ING’s loan book most responsible for climate change. This progress

and progress on other ESG related matters were monitored by the newly appointed ESG Committee.

Read more on risk management in ‘Risk Committee’ below.

Internal Supervisory Board meetings

During the 2022 internal meetings of the Supervisory Board (with the CEO attending, except when matters

concerning him were discussed), among others, the following recurring topics were addressed:

•The annual targets and periodic performance assessments of the MBB and its individual members. The

Supervisory Board evaluates and assesses the functioning of the MBB, including questions of succession

and remuneration, at least annually, in an internal meeting.

•The composition of the MBB.

•The composition of the Supervisory Board including its committee composition (this year including the

appointment of the ESG Committee).

•ING’s broader talent and succession planning in view of bench strength, including the outcome of ING’s

annual talent review.

•Remuneration related matters, including, but not limited to (1) the appointment/compensation/

severance proposals of high earners and senior management in control functions and (2) the Variable

Remuneration Accrual Model (VRAM) process.

•The annual collective self-evaluation of the MBB and the Supervisory Board.

Supervisory Board annual collective self-evaluation

As in previous years, the Supervisory Board conducted an annual collective self-evaluation of the reporting

year. This was facilitated by an independent external party and with input from several executives and

senior managers who regularly interact with the Supervisory Board and attend its meetings. The self-

evaluation addressed the ‘what’ (roles and responsibilities) and the ‘how’ (culture and behaviour) of the

Supervisory Board. In addition to the traditional themes, the self-evaluation over 2022 also reflected on

ING’s strategy, digital and data developments, ESG, and geopolitical events.

Approach

During the November 2022 Supervisory Board meeting, the Supervisory Board discussed and approved the

annual collective self-evaluation process and design for the year 2022. In December 2022, input was

gathered from the Supervisory Board members and frequent attendees. This, together with the outcome of

the 2022 mid-year review and of the bilateral interactions between the chairman and each individual

Supervisory Board member in January 2023, formed the basis for the collective Supervisory Board self-

evaluation dialogue in February 2023. During this dialogue the Supervisory Board determined its collective

positive points to maintain and its 2023 priorities for further improvement. This forms part of the

Supervisory Board’s practice to regularly deliberate on its collective performance i.e. towards year-end (to

determine the next year’s approach and potential specific themes to address), halfway through the year (to

reflect on status and progress) and at the start of the year (to discuss the outcome of the previous year and

agree on positive points to keep and points for further improvement).

Results

The Supervisory Board’s collective dialogue on 1 February 2023 centred around the following questions: (1)

Positive points: are the positive points previously identified still valid? Where has the Supervisory Board

further improved, taking into account the continued focus on ESG and ongoing macroeconomic &

geopolitical events? and (2) Priorities for further improvement: Did the Supervisory Board sufficiently

progress in 2022 on the improvement areas previously defined? What are the priority areas to further

improve in 2023?

The Supervisory Board's agreed priorities for 2022 included:

1.Regarding the ‘what’: (1) safeguarding balance in open, constructive dialogue with the Executive Board

and the Management Board Banking on business/market developments, including emerging risks, and

time spent on shareholders’ and other stakeholders’ views on performance of the company, and (2)

continue to be provided with fit-for-purpose supporting materials for board meetings.

2.Regarding the ‘how’: (1) Covid-19 permitting, the importance of returning to physical meetings with the

Executive Board, the Management Board Banking and other ING representatives, and (ii) continue

investing in access to and leveraging on knowledge, skills and experiences relevant to the Supervisory

Board in the context of ING.

During 2022, the Supervisory Board addressed all of the above and, where applicable, embedded

enhancements in its standard working practice: With regard to the ‘what’, items (1) and (2) form part of the

regular meetings of the Supervisory Board and its committees, with a view to the Supervisory Board’s role

and responsibilities, supported by its comprehensive annual cycle of work. With regard to the ‘how’, item (1)

was completed by the implementation of the Hybrid Mode as the Supervisory Board’s new way of working,

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Other information

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ING Bank Annual Report 202239

and item (2) was addressed by broadening the focus areas of the non-chair Supervisory Board members

including the interactions within the organisation on these.

Looking back on 2022, and compared to previous years, the Supervisory Board concluded that several

positive points continued to be valid and had also further improved during 2022:

•Regarding the ‘what’, the following Supervisory Board strengths were recognised: (1) its effectiveness at

overseeing, supervising, challenging and advising the Executive Board and Management Board Banking,

(2) its understanding of the organisation’s strategic priorities and relevant digital & data developments,

the effectiveness with which ESG considerations are integrated into discussions and the monitoring of

macroeconomic & geopolitical events, (3) its composition and the interface / working balance between

the Committees and the Supervisory Board, and (4) its meeting management, meeting materials and the

support available.

•Regarding the ‘how’, the following positives were recognised: (1) the relationships between the

Supervisory Board members and with the Executive Board and Management Board Banking, and (2) the

understanding of the views and requirements of key stakeholders.

Looking ahead, the Supervisory Board concluded that several priorities for further improvement are still

relevant and the following areas require further attention during 2023:

•Regarding the ‘what’ it identified: (1) safeguarding balance in open, constructive dialogue with the

Executive Board and the Management Board Banking on strategy/business/market developments,

including emerging risks, and time spent on shareholders’ and other stakeholders’ views on performance

of the company, and (2) continue to be provided with fit-for-purpose supporting materials for board

meetings.

•Regarding the ‘how’ these attention points were identified: (1) Managing the change in composition of

the Supervisory Board, and (2) Enhancing insight into people and talent processes.

Looking ahead, the Supervisory Board concluded that several priorities are still relevant and the following

areas require further attention during 2023:

1.Further establish the Supervisory Board’s oversight and governance on ESG through its dedicated ad-hoc

Supervisory Board committee with a focus on further maturing the Social and Governance components.

2.On people related matters, ensure continued attention for diversity & inclusion and enhance the

Supervisory Board’s view of the broader talent pipeline.

3.Ensure continued focus is given to key topics, in addition to the aforementioned, such as ING’s strategic

priorities, digital & data, (non-financial) risk and geopolitical & macroeconomic developments, including

the accessing of outside-in views of stakeholders.

4.Enhance the quality of board meeting materials by highlighting the topic’s most significant challenges &

dilemmas and by being mindful of the length of materials.

5.Maintain the effectiveness of the Supervisory Board throughout the imminent changes in its composition

through continued team building events and attention for the individual members’ areas of expertise.

6.Support the CEO throughout the imminent organisational and composition changes of the Management

Board Banking.

The Supervisory Board is of the opinion that the above contributes to overseeing and constructively

challenging ING in its ambition to keep transforming into a data-driven digital bank in line with the strategy.

Committee meetings

To manage each of the committees’ annual cycle of work and potential committee interdependencies, each

committee has drawn up an annual work plan that is being kept up to date throughout the year for priority

setting and forward-looking purposes. These plans all feed into the Supervisory Board’s annual meeting

cycle.

For an overview of the composition of the committees on 31 December 2022, see the table under 'Overview

of Supervisory Board committee members'.

Risk Committee

The Risk Committee met 10 times in 2022, of which meetings two were combined with the Remuneration

Committee to address remuneration-related risk methodology elements, such as those relating to the

Variable Remuneration Accrual Model (VRAM) that was introduced in 2018 (see also ‘Remuneration

Committee’). During another Risk Committee meeting there was a combined session with the ESG

Committee on climate risk stress testing. Since 2020, almost all Supervisory Board members have been

members of the Risk Committee, due to the continued importance of risk and how this is managed and

supervised.

The committee assists and advises the Supervisory Board with the performance of its duties in relation to

overseeing: (1) the setting and monitoring of ING’s risk appetite and risk strategy for all types of risk,

including but not limited to financial, non-financial and compliance risk; (2) the effectiveness of the internal

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ING Bank Annual Report 202240

risk management and control systems; and (3) other related risk management topics. The Risk Committee

prepares the discussions within and decisions of the Supervisory Board on such matters.

The Risk Committee aims to ensure that integrity continues to come first for ING and that critical non-

financial risk areas stay top of mind, as an integral part of ING’s identity. Through risk management ING

builds strong foundations, supported by structural solutions that continue to earn and maintain the trust of

its stakeholders, including its customers and society at large.

During 2022, in light of the situation with regard to Russia and Ukraine and Covid-19, additional updates on

financial, non-financial and compliance risk were provided, both separately and as recurring reporting to

help continue and further bolster ING’s customer diligence and stakeholder integrity. These updates

included the status of ING’s accompanying metrics for risks in the areas of solvency, liquidity and funding,

credit, country, market, IT, non-financial risk and compliance. The discussions were supported by different

analyses conducted on the potential impact of such events on ING’s credit portfolio, capital and liquidity

position, and updates on credit developments in certain countries and portfolios. With respect to the

situation in Russia and Ukraine, the committee also addressed risks related to non-financial risk (including

cybercrime) and sanctions. With respect to Covid-19, the committee addressed risks related to business

continuity, business resilience, the working from home control environment, HR, and IT and cybercrime.

Additional broad risk topics in relation to these events included (1) updates of the bank-wide KYC

enhancement and maturity efforts, (2) a variety of topical dashboards such as on IT (risk), cybersecurity,

sourcing, data quality and data privacy (including GDPR) and (3) the status of implementation of related

regulatory programmes.

The Risk Committee also regularly discussed the status of reported whistleblower concerns. As part of the

annual recurring topics, the Risk Committee discussed the following:

•The annual review of the Risk Appetite Framework and accompanying principles and risk appetite

statements.

•The annual update to the Recovery Plan.

•The impact of upcoming regulations, and credit developments in certain countries and portfolios.

•The review of the scope of ING’s key policies.

As mentioned, in addition to current topical events throughout the year, deep dives and thematic sessions

also took place on specific topics. Deep dives are technical discussions on selected key topics that have

substantial risk management relevance and that contribute to a more in-depth understanding of the

matters at hand. In 2022, there were deep dives on IT and cybersecurity, ING’s Risk Appetite Framework,

data strategy and data management, the bank-wide KYC enhancement programme and liquidity and

funding. Thematic sessions focus specifically on certain themes that need further attention and/or are

looking forward at emerging risks and developments. Thematic sessions in 2022 encompassed:

cybersecurity, ICAAP (including Economic Capital and Stress Testing), internal controls and key control

testing, compliance, climate risk stress testing and modelling. All Supervisory Board members had a

standing invitation for these sessions and participated in several of these as deemed relevant to them.

All relevant items discussed by the committee were reported to the Supervisory Board, with the Supervisory

Board approving those items as required from a governance perspective.

Audit Committee

The Audit Committee met seven times in 2022. During one of its meetings there was a combined session

with the ESG Committee on ESG disclosures.

The committee assists and advises the Supervisory Board with the performance of its duties in relation to

the integrity and quality of ING’s financial reporting, and the effectiveness of ING’s internal risk

management and control systems in relation to financial reporting and prepares the discussions within and

the decisions of the Supervisory Board on such matters.

The Audit Committee addressed, among other things, the following recurring topics:

•The quarterly results and the financial statements, the press releases related to the periodic results and

the Annual Report.

•Judgemental accounting topics.

•Key audit matters, as included in the auditors’ reports.

•Financial reporting, including the quarterly results.

•(The approval of) the external auditor’s audit plan/engagement letter/independence and fees.

•The overall internal control environment, the internal controls over financial reporting, the internal and

external auditor reports.

•The review of the internal audit function.

•Matters related to the financing of the company, including the assessment of ING’s capital and liquidity

position.

•The internal audit plan, including its support and progress monitoring.

•Critical and high rated overdue issues, as reported by the internal audit function.

•The updated internal audit charter.

•The update of ING’s key policies, such as the ING Global Tax Policy.

The Audit Committee performed an assessment of the functioning of the external auditor and the scope

and materiality of the audit plan and the principal risks identified in the audit plan.

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ING Bank Annual Report 202241

Specific attention was paid to a variety of other related topics. These included, among other things, the

following recurring topics:

•ING’s long-term CET1 ratio target level.

•ING’s dividend and distribution policy.

•SOx Act framework and controls.

•Capital and liquidity management.

In addition, in 2022, the Audit Committee addressed, among others, the developments in Russia and

Ukraine, ICAAP governance, external audit quality indicators, ESG-disclosures and matters in the context of

Covid-19 uncertainty.

All relevant items discussed by the committee were reported to the SB, with the Supervisory Board

approving those items as required from a governance perspective.

Directly following the Audit Committee meetings, the members of the Audit Committee met in a closed

meeting with the internal and external auditors to seek confirmation that all relevant topics were discussed

in the Audit Committee meetings.

To properly prepare for the regular Audit Committee meetings, the chairperson of the Audit Committee held

separate sessions with the external auditor, the general manager of the internal audit department, the chief

financial officer (CFO) and the Group Controller. The chairperson also met with various senior managers.

Nomination and Corporate Governance Committee

The Nomination and Corporate Governance Committee met 12 times in 2022, of which one was combined

with the Remuneration Committee to address topics that simultaneously covered nomination as well as

remuneration.

The committee assists the SB with the performance of its duties in relation to selection and nomination of,

among others, the members of the Supervisory Board and MBB, talent management and the effectiveness

of ING’s governance arrangements. The committee prepares the discussions with and decisions of the

Supervisory Board on such matters.

With regard to nomination related matters, ING aims to ensure that all of its boards are – at all times –

adequately composed to perform their duties. As its standard practice, the Nomination and Corporate

Governance Committee therefore discusses (1) the performance of the individual members of the MBB (also

serving as input to the Remuneration Committee) and (2) medium- to long-term succession planning for the

MBB and the Supervisory Board. A continuing conversation on MBB succession planning is facilitated by the

chief human resources officer as part of the regular Nomination and Corporate Governance Committee

meetings in the form of deep dives by function and business line.

When selecting suitable board succession candidates, various aspects are to be taken into account in view

of board composition, such as regulatory requirements, suitability considerations, banking and other

industry knowledge, outside positions, independence, no conflicts of interest and availability. Also the

minimum and optimal size of a board and diversity aspects such as how to arrive at an appropriate balance

in its representation of regions, age, gender, knowledge and expertise are to be taken into account. The

generic profile of the Supervisory Board aims to capture these elements, which profile can be found on

ing.com. Read more on the boards’ composition in the ‘Composition of the Management Board Banking and

Supervisory Board’ section that also includes a diversity and competence matrix.

The Nomination and Corporate Governance Committee also focuses on ING’s broader talent and succession

planning in view of bench strength and diversity at higher management levels, with selected key roles

receiving dedicated attention. This is done by taking into account ING’s diversity policy and by accelerating

refreshment where possible without jeopardising business continuity. The diversity policy is published on

ing.com and explained in more detail in ‘Unlocking our people's full potential’. The committee also holds

periodic conversations outside of its regular meetings with internal talented individuals who are considered

to have the potential to assume more senior and complex roles in the organisation over time. The results of

these conversations are fed into the individuals’ coaching and development plans.

With regard to corporate governance, the committee discussed:

•The 2022 Annual Report and the accompanying booklets on ING’s application of the Dutch Corporate

Governance Code and the Dutch Banking Code.

•The approach and agenda for the 2022 AGM.

•The suitability policy framework and its global implementation, thereby also taking into account

regulatory developments.

•The annual updates to the corporate board charters, the governance manual and the decision structure

as well as any changes in board members’ outside positions.

•The review of the scope of ING’s key policies.

All relevant items discussed by the committee were reported to the Supervisory Board, with the Supervisory

Board approving those items as required from a governance perspective.

Remuneration Committee

The Remuneration Committee met seven times in 2022.

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The committee assists the Supervisory Board, with the performance of its duties in relation to remuneration,

the remuneration policies and the application and compliance thereof and prepares the discussions within

and decisions of the Supervisory Board on such matters. In doing so, the Remuneration Committee takes

into account the adequacy of information provided to shareholders on remuneration policies and practices.

As an annual recurring topic, the Remuneration Committee reviewed the remuneration report by way of

benchmarking with the purpose of further improving the remuneration report.

In addition, the Remuneration Committee discussed the progress and performance on the annual targets

set for the MBB. With regard to variable remuneration and the application of ING’s accompanying VRAM

(including last year’s lessons learned), the committee received input and advice from the Risk Committee

following strengthened risk management governance. This served as input for a review of the predefined

thresholds above which the pool for variable remuneration may be unlocked for those eligible as well as the

accompanying individual variable remuneration proposals, including potential cases for holdback or

clawback of deferred compensation by way of malus.

The Remuneration Committee also reviewed the proposed updates to ING’s Remuneration Regulations

Framework as part of its annual review. Throughout the year it assessed Identified Staff and High Earner-

related remuneration matters, based on ING’s remuneration governance structure which is part of the

above mentioned framework. In addition, the Remuneration Committee monitored the development of the

gender pay gap.

All relevant items discussed by the committee were reported to the Supervisory Board, with the Supervisory

Board approving those items as required from a governance perspective.

ESG Committee

In the second quarter of 2022, the Supervisory Board appointed an ESG Committee from among its

members. The ESG Committee has been established for an initial duration of two years. After this period, the

SB will determine whether the ESG Committee shall be made permanent.

To prevent an overlap between the ESG Committee and the other Supervisory Board committees and to

safeguard an aligned and common view on ESG, the ESG Committee consists of at least one member of

each of the other committees.

The ESG Committee assists the Supervisory Board with matters relating to the various areas of ESG

(‘environmental’, ‘social’ and ‘governance’), including but not limited to, the development of ESG and the

integration of ESG in the company and its strategy. In addition, the ESG Committee assists the Supervisory

Board by generally monitoring and advising on relevant ESG developments.

The ESG Committee met three times in 2022. During its first meeting, the ESG Committee discussed and

supported a variety of topics with a focus on the role and scope of the ESG Committee and its Terms of

Reference, which can be found on ING.com. During its subsequent meetings, the ESG Committee discussed

progress and potential impediments as well as relevant trends on ‘environmental’, ‘social’ and ‘governance’

topics and how to connect them with ING’s response and actions on the basis of ING's ESG dashboard. In

addition, the ESG Committee discussed key updates and relevant ESG related matters, such as

greenwashing, sustainability targets and ESG dilemmas. The ESG Committee also discussed any updates of

key ESG policies and ESG related supervisory/regulatory letters and publications. In 2022, members of the

ESG Committee participated in deep dives on ING's approach on environment challenges and key initiatives,

including how we reduce our own footprint, our Terra alignment strategy and our biodiversity approach and

ING's approach on social challenges and key initiatives with a focus on diversity and inclusion, financial

health and human rights. There were thematic sessions on climate risk stress testing and ESG regulatory

disclosures.

All relevant items discussed by the committee were reported to the Supervisory Board, with the Supervisory

Board approving those items as required from a governance perspective.

Overview of SB committee members

The table below reflects the composition of the Supervisory Board committees on 31 December 2022.


Supervisory Board	Risk Commitee	Audit Committee	Nomination and Corporate Governance Committee	Remuneration Committee	ESG Committee
Hans Wijers (chair)	Member	Member	Chair	Member	Member
Mike Rees (vice- chair)	Chair	Member	—	—	—
Juan Colombás	Member	Member	—	—	—
Marianna Gheorge	Member	—	Member	Member	Member
Margarete Haase	Member	Chair	—	—	—
Lodewijk Hijmans van den Bergh	Member	—	—	—	Chair
Herman Hulst	Member	Member	—	—	Member
Harold Naus	Member	—	—	Member	—
Herna Verhagen	—	—	Member	Chair	—

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ING Bank Annual Report 202243

Composition of the Management Board Banking and Supervisory

Board

ING aims to ensure that the boards are – at all times – adequately composed to perform their duties. In

2022, no members were (re-)appointed to the boards.

In line with ING’s strategic priorities and in order to further simplify the management structure of ING Bank,

it was announced on 15 December 2022 that the roles of head of Retail Banking, Challengers & Growth

Markets and Market Leaders will be combined in 2023. Pinar Abay, currently head of Market Leaders, will be

appointed to the role effective 15 May 2023 (subject to regulatory approval). Aris Bogdaneris, currently head

of Retail Banking and Challengers & Growth Markets will step down from the Management Board Banking as

of 15 May 2023 and will leave ING per 1 August 2023 to pursue other opportunities.

Furthermore, Ron van Kemenade, chief technology officer, announced to step down from his position as per

30 April 2023. Succession planning has been initiated for this role.

After more than seven years of dedicated service, Mariana Gheorghe announced that she will not be

available for reappointment to the Supervisory Board at the 2023 AGM. Therefore in 2022, the Nomination

and Corporate Governance Committee and the Supervisory Board initiated the process of selecting and

nominating a candidate for appointment to the Supervisory Board at the 2023 AGM.

On 2 February 2023, it was announced that Hans Wijers has expressed the intention for personal reasons to

hand over his duties as chairman and retire from the Supervisory Board in the second half of 2023. Hans

Wijers was appointed to the Supervisory Board in 2017 and became its chairman in 2018. It was announced

on 3 March 2023 that ING will propose to appoint Karl Guha to the Supervisory Board at the Annual General

Meeting to be held on 24 April 2023. Upon decision by the General Meeting, it is the intention of the

Supervisory Board to elect Karl Guha as its chairman effective 1 July 2023.

The Nomination and Corporate Governance Committee and the Supervisory Board will continue to strive for

an adequate and balanced composition of the Supervisory Board when selecting and nominating new

members for appointment, taking into account ING’s diversity policy and other factors.

All Supervisory Board members, with the exception of no more than one person, shall qualify as

independent as defined in the best practice provision 2.1.8 of the Dutch Corporate Governance Code. The

members of the Supervisory Board are therefore requested to assess annually whether or not they are

independent as set out in the Dutch Corporate Governance Code and to confirm this in writing. On this basis,

the Supervisory Board confirms that all members of the Supervisory Board are to be regarded as

independent on 31 December 2022. On this date all members of the Supervisory Board were also to be

regarded as independent within the meaning of the NYSE listing standards.

Read more in the Corporate governance chapter on the composition of the Management Board Banking and

the Supervisory Board. For the full list of Management Board Banking and Supervisory Board members and

more details see ‘Our leadership’, which information is considered to be incorporated, by reference, in this

Supervisory Board report.

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ING Bank Annual Report 202244

Diversity and competence matrix

Please note the following:

•The purpose of this matrix is to provide an overview on the experience and competencies that ING considers to be the most relevant for its stakeholders.

•The matrix represents to which extent ING's board members have such experience and competencies (either developed already before joining ING and/or during their position(s) at ING).

•The content of the matrix is subject to change in the light of ING’s continually changing situation, markets and environment.

•For the appointments of new board members, all relevant competencies are also shared with ING’s supervisors DNB/ECB based on their standard suitability matrix to assess the collective competence of members of the

management/supervisory body.

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ING Bank Annual Report 202245

Appreciation for the MBB and ING employees

The SB would like to thank the members of the MBB for their contribution to ING’s performance over the past

year. It was certainly another challenging year with macroeconomic and geopolitical uncertainty impacting

our customers, business and society in general. We’re grateful for their efforts in navigating through these

challenges and continuing to create long-term value for our stakeholders. Despite the uncertainty, ING

coped well, continuing to support customers and intensifying our efforts to fight climate change. Our results

for 2022 reflect the strength of our diversified business model and show our resilience and adaptability.

Of course, none of this would have been possible without our employees. We rely on them to implement

ING’s purpose and strategy. The SB appreciates their hard work and dedication in sometimes difficult

circumstances. Our sincere thanks to all.

Amsterdam, 6 March 2023

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ING Bank Annual Report 202246

Corporate governance

This section comprises ING Bank N.V.’s Corporate Governance

Statement.

Dutch Banking Code

The Dutch Banking Code is applied by ING Bank N.V. (ING Bank). The application by ING Bank is described in

the booklet ‘Application of the Dutch Banking Code by ING Bank N.V. (FY2022)’, 9 March 2023, available on

ing.com. This is to be read in conjunction with and deemed to be incorporated in the Annual Report of ING

Bank. The Banking Code can be downloaded from the website nvb.nl/English/.

Financial reporting process

As ING Bank is a consolidated subsidiary of ING Groep N.V. (ING Group), its policies and procedures for

establishing and maintaining adequate internal control over financial reporting are the same as those

applied by ING Group for its consolidated financial statements with respect to ING Bank and the entities

included in the latter's own consolidated financial statements.

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 the assets of ING;

•Provide reasonable assurance that transactions are recorded as necessary to permit the 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 the prevention or timely detection of unauthorised acquisition,

use or disposition of assets that could have material effect on the financial statements.

ING has a process in place where, under the supervision and with the participation of the CEO and CFO, the

effectiveness of internal control over financial reporting is evaluated, based on the criteria of the Committee

of Sponsoring Organisations of the Treadway Commission in Internal Reporting (COSO) - Integrated

Framework (2013 Framework).

Management Board Banking composition

ING aims to have an adequate and balanced composition of its Management Board Banking, with a diverse

selection of persons with knowledge, skills and 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 balance of

experience and affinity with the nature and culture of the business of ING. Factors such as nationality,

gender, age and education are also taken into account for the composition of the Management Board

Banking.

The Supervisory Board regularly assesses the composition of the Management Board Banking.

The Gender Diversity Act, which came into force in the Netherlands on 1 January 2022, requires ING to set

appropriate and ambitious targets for gender diversity in its Executive Board and senior management. ING

considers its Management Board Banking to be part of this senior management group for which the target

for gender diversity is set at at least 30% by 2025. See more information on diversity, including on gender

diversity in senior management, in the paragraphs on Unlocking our people's full potential in 'How we are

making the difference'.

Information on the members of the Management Board Banking

Reference is made to the Our leadership section for information on the members of the Management Board

Banking, which information is deemed incorporated by reference.

Supervisory Board composition

ING aims to have an adequate and balanced composition of its Supervisory Board, with a mix of persons

with knowledge, skills and 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

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ING Bank Annual Report 202247

in which such companies operate. In the selection of Supervisory Board members, ING strives 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.

The Supervisory Board is responsible for selecting and nominating candidates for appointment or

reappointment to the Supervisory Board, among others based on the Supervisory Board profile, which is

available on ing.com. The Supervisory Board regularly assesses the composition of the Supervisory Board.

In 2022, three out of nine members of the Supervisory Board were female. 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 of nationality, the ratio between

Dutch and non-Dutch nationalities in 2022 was 56 - 44%.

According to the Gender Diversity Act, which came into force in the Netherlands on 1 January 2022, ING is

required to comply with a gender diversity quota of one third male and one third female for its Supervisory

Board. Over the year 2022, the Supervisory Board was compliant.

Relevant positions pursuant to CRD IV

Members of the Supervisory Board may hold other positions, including directorships, either paid

or unpaid. The Capital Requirements Directive 4 (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

ECB 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 Bank. 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 Bank.

Information on the members of the Supervisory Board

Reference is made to the Our leadership section for information on the members of the Supervisory Board,

which information is deemed incorporated by reference. Also read more about the composition and duties

of the Supervisory Board and its committees in the Supervisory Board report and on ing.com.

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Conformity statement

The Management Board Banking is required to prepare the Financial statements and the Annual Report of

ING Bank N.V. for each financial year in accordance with applicable Dutch law and those International

Financial Reporting Standards (IFRS) that were endorsed by the European Union.

Conformity statement pursuant to section 5:25c paragraph 2(c) of the Dutch Financial Supervision Act (Wet

op het financieel toezicht).

The Management Board Banking is responsible for maintaining proper accounting records, for safeguarding

assets and for taking reasonable steps to prevent and detect fraud and other irregularities. It is responsible

for selecting suitable accounting policies and applying them on a consistent basis, making judgements and

estimates that are prudent and reasonable. It is also responsible for establishing and maintaining internal

procedures which ensure that all major financial information is known to the Management Board Banking,

so that the timeliness, completeness and correctness of the external financial reporting are assured.

As required by section 5:25c paragraph 2(c) of the Dutch Financial Supervision Act, each of the signatories

hereby confirms that to the best of his knowledge:

•the ING Bank N.V. 2022 Financial statements give a true and fair view of the assets, liabilities, financial

position and profit or loss of ING Bank N.V. and the enterprises included in the consolidation taken as a

whole; and

•the ING Bank N.V. 2022 Annual Report gives a true and fair view of the position at the balance sheet date,

the development and performance of the business during the financial year 2022 of ING Bank N.V. and

the enterprises included in the consolidation taken as a whole, together with a description of the

principal risks ING Bank N.V. is being confronted with.

Amsterdam, 6 March 2023

The Management Board Banking

S.J.A. (Steven) van Rijswijk

CEO, chairman of the Management Board Banking

T. (Tanate) Phutrakul

CFO

L. (Ljiljana) Čortan

CRO

P. (Pinar) Abay

Head of Market Leaders

A.J.M. (Andrew) Bester

Head of Wholesale Banking

A. (Aris) Bogdaneris

Head of Retail Banking

Head of Challengers & Growth Markets

R.H.E. (Ron) van Kemenade

Chief technology officer

M.A. (Marnix) Stiphout

Chief operations officer / Chief transformation officer

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Conformity statement

ING Bank Annual Report 202249

Risk management

The war in Ukraine had, besides an immense impact on the lives of

millions of people, a negative impact on the global economy. While

businesses and households were still recovering from the economic

consequences of Covid-19, developments in Ukraine further distorted

supply chains, caused higher energy costs and aggravated an already

high inflation rate environment. This, in combination with central bank

rate hikes, worsened the macroeconomic outlook. This section explains

ING’s approach towards risk management.

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 strategic planning and daily business activities. This aims to safeguard

ING’s financial strength and reputation by promoting the identification, measurement and management of

risks at all levels of the organisation. Taking measured risks aligned with its risk appetite is core to ING’s

business.

The risk management function supports the EB in formulating the risk appetite, strategies, policies and

limits. It provides adequate steering, oversight, challenge and controls throughout ING on risk-related items.

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 on solvency, credit, market, funding and liquidity, ESG, operational, IT, compliance, business and

model risks.

Risk categories

ING’s main risks are described in the categories below. Chapters in the risk management section are based

on how risks are managed internally. Operational and IT risks are part of the Non-financial risk (NFR)

chapter.


Overview of risk categories
Risk categories	Sub-categories	Defined as:
Financial risk	Solvency risk	The risk of lacking sufficient capital to fulfil business objectives, regulatory requirements or market expectations. A bank that is completely insolvent is unable to pay its debts and will be forced into bankruptcy.
	Credit risk	The risk of potential loss due to default by ING’s debtors (including bond issuers) or trading counterparties.
	Market risk	The risk of potential loss due to adverse movements in market variables.
	Funding and liquidity risk	The risk that ING cannot meet financial liabilities when they become due at reasonable costs and in a timely manner.
Non-financial risks	Operational risk	The risk of direct or indirect loss arising from inadequate or failed internal processes, people and systems or from external events.
	Information (Technology) risk	The risk of financial loss, regulatory sanction and/or reputational damage due to ineffectively utilising information, or inappropriately protecting information.
	Compliance risk	A threat posed to ING’s standing resulting from failure to act in line with applicable laws and regulations, internal rules (including ING’s Orange Code and global Code of Conduct) and/or societal expectations.
Overarching risks	ESG risk	The risk of losses arising from any negative financial impact on the institution stemming from the current or prospective impacts of environmental, social or governance factors on the institution’s counterparties or invested assets
	Business risk	The value or earnings loss due to business and strategic decisions that do not materialise as planned. This risk can be expressed in terms of volumes, margins, expenses and fees and commissions.
	Model risk	The risk that the financial or reputational position of ING is negatively impacted as a consequence of the use of models. Model risk can arise from errors in the development, implementation, use or interpretation of models, or from incomplete or wrong data etc., leading to inaccurate, non-compliant or misinterpreted model outputs.

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Risk Management

ING Bank Annual Report 202250


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 Bank Consolidated financial statements and are indicated by the symbol (). This is applicable for the chapters, paragraphs, graphs or tables within the risk management section that are indicated with this symbol in the respective headings or table header. 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 CRR2 and CRD V, 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.

Top and emerging risks

The risks listed below are defined as existing and emerging risks which could cause actual results to differ, in

some instances materially, from those anticipated. They may have a material impact on the reputation of

the company, introduce volatility in future operating 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 where the impact on the organisation is currently more difficult to assess

than other risk factors. These risks are on top of other existing risks.

The topics have mainly emerged as part of the annual risk assessment that feeds into, among others, the

annual review 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 2022 risk assessment confirmed our top and emerging risks. The top risks in 2022 are related to

geopolitical risk, financial crime, cybercrime and inflation risk. Climate change risk remains an emerging risk,

and reflects the impact that climate change may have on the financial position and/or reputation of ING.

Geopolitical risk

This risk has obviously increased since the early start of 2022, mainly following the war in Ukraine and

subsequent threats by Russia to limit or cut gas exports. Besides Russia's war in Ukraine, tensions between

the US and China relating to Taiwan and trade issues have persisted this year.

The war in Ukraine

The war in Ukraine and rapidly escalating events in 2022 were, and still are, a significant tragedy to the

people, causing disruption to business and economic activity in the region and worldwide. Subsequently, the

US, the UK and the EU initiated sanctions against Russia in 2022. In response, the Russian central bank

enforced liquidity and currency controls. The uncertainty about the outcome of the war will remain in the

longer term.

Sanctions

The international community leveraged their sanction tools in response to the war in Ukraine. Accordingly,

as part of ING’s KYC and compliance risk governance and procedures, ING is continuously monitoring the

situation to stay abreast on all relevant updates to implement effective and appropriate additional control

measures and to manage the increased risk and financial impacts of these developments. For sanctions-

related developments, more information is in ‘Compliance risk’.

Our exposures

ING has Wholesale Banking activities in both Russia and Ukraine, as well as investments in Russia, some of

which are denominated in local currency. Investments in Russia are in government securities as required by

a subsidiary under Russian law. As a result of the war in Ukraine and related international response

measures, including sanctions and capital controls, we face an increased risk of default of counterparties

located in Russia and Ukraine. These include counterparties the ultimate parent of which is located in Russia,

which may be considered effectively controlled or influenced through Russian involvement, and other

counterparties in sectors affected by the international response measures. Furthermore, we have

counterparty exposure to Russian entities in connection with foreign exchange derivatives for future receipt

of foreign currencies against the Russian rouble.

Remaining at risk for ING at year-end 2022 is €0.3 billion local equity and €2.5 billion credit exposures

booked outside of Russia. In Ukraine, our exposure was approximately €500 million, mainly with liquidity

facilities and other lending. Early in March 2022, we intensified monitoring of counterparties, continued

managing our exposure and announced a decision to not do new Russia-related business.

The Russian and Ukrainian exposures are under continuous monitoring. Uncertainties on the evolution of

the conflict will remain for some time to come. Since the start of the war, business and risk departments

have worked on several sensitivity analyses and stress tests to assess the potential downside impact of the

Contents

Introduction

Strategy and performance

Our leadership and corporate governance

Risk management

Consolidated financial statements

Parent company financial statements

Other information

> Risk Management

ING Bank Annual Report 202251

war, and the potential second order and stagflation impact in 2022. Furthermore, we are working together

with counterparties, both onshore and offshore, to limit risks associated with derivatives exposures.