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Risk management
Basis of disclosures (*)
The risk management section contains information relating to the nature and extent of the risks of
financial instruments as required by International Financial Reporting Standards (IFRS) 7 'Financial
Instruments: Disclosures'. These disclosures are an integral part of ING Group Consolidated financial
statements and are indicated by the symbol (*). 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 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. Disclosures in accordance with Part Eight of the
CRR2 and CRD V, and as required by the supervisory authority, are published in our \u2018Additional Pillar III
Report\u2019, which can be found on our corporate website ing.com.
Credit risk
Governance (*)
ING\u2019s credit risk strategy is to maintain an internationally diversified loan and bond portfolio, while avoiding
large risk concentrations. The emphasis is on managing business developments within the defined credit
and concentration risk appetite. The aim is to support relationship banking activities, while maintaining
internal risk/reward guidelines and controls.
The Credit Risk department is responsible for setting the credit risk strategy for ING and aims to ensure
credit risk and credit restructuring are managed from an overarching point of view rather than per business
line. Furthermore, the Credit Risk Control Unit is responsible for the oversight and control of rating systems.
While the Credit Risk department has oversight of the Group credit risk strategy and risk appetite across
Retail Banking risk and Wholesale Banking risk, the head of Retail/Rest of World (RoW) Risk and head of
Wholesale Banking Risk aim to ensure the management of the risk within these business lines. Also refer to
the Risk governance and organisational structure in the introductory section of 'Risk management'.
The Credit Risk function encompasses the following activities:
\u2022 Providing consistent credit risk policies, systems and tools to manage the credit lifecycle of all activities;
\u2022 Measuring, monitoring and managing credit risks in the bank\u2019s portfolio, including evaluation of scenario
and stress test results;
\u2022 Challenging and approving new and modified transactions and borrower reviews, including involvement
in the process of assigning risk ratings to indicate a clients's creditworthiness;
\u2022 Managing the levels of provisioning and risk costs, and advising on impairments.
Credit risk categories (*)
In the following table the different types of credit risk categories are described and a reconciliation with the
notes in the financial statements is also included:
Reconciliation between credit risk categories and financial position (*)
Credit risk categories
Notes in the financial statements
Lending risk: is the risk that the client (counterparty, corporate or
individual) does not pay the principal interest or fees on a loan
when they are due, or on demand for letters of credit (LCs) and
guarantees provided by ING.
Note
2
Cash and balances with central banks
Note
3
Loans and advances to banks
Note
4
Financial assets at fair value through
profit or loss
Note
5
Financial assets at fair value through
other comprehensive income
Note
7
Loans and advances to customers
Note
41
Contingent liabilities and commitments
Investment risk: is the credit default and risk rating migration risk
that is associated with ING\u2019s investments in bonds, commercial
paper, equities, securitisations and other similar publicly traded
securities. This can be viewed as the potential loss that ING may
incur from holding a position in underlying securities whose
issuer's credit quality deteriorates or defaults.
Note
4
Financial assets at fair value through
profit or loss
Note
5
Financial assets at fair value through
other comprehensive income
Note
6
Debt securities
Money market risk: arises when ING places short-term deposits
with a counterparty in order to manage excess liquidity. In the
event of a counterparty default, ING may lose the deposit placed.
Note
2
Cash and balances with central banks
Note
3
Loans and advances to banks
Note
7
Loans and advances to customers
Pre-settlement risk: arises when a client defaults on a transaction
before settlement and ING must replace the contract by a trade
with another counterparty at the then prevailing (possibly
unfavourable) market price. This credit risk category is associated
with derivatives transactions (exchange-traded derivatives, over-
the-counter (OTC) derivatives and securities financing
transactions).
Note
4
Financial assets at fair value through
profit or loss
Note
14
Financial liabilities at fair value through
profit or loss
Note
40
Offsetting financial assets and liabilities
Settlement risk: arises when there is an exchange of value (funds
or instruments) and receipt from its counterparty is not verified
or expected until after ING has given irrevocable instructions to
pay or has paid or delivered its side of the trade. The risk is that
ING delivers but does not receive delivery from its counterparty.
Note
4
Financial assets at fair value through
profit or loss
Note
11
Other assets
Note
14
Financial liabilities at fair value through
profit or loss
Note
16
Other liabilities
Credit risk appetite and concentration risk framework (*)
The credit risk appetite and concentration risk framework is designed to prevent undesired high levels of
credit risk and credit concentrations within various levels of the ING portfolio. It is derived from the concepts
of boundaries and instruments as described in the ING Risk Appetite Framework (RAF).
Credit risk appetite is the maximum level of credit risk ING is willing to accept for growth and value creation.
The credit risk appetite is linked to the overall bank-wide RAF. The credit risk appetite is expressed in
quantitative and qualitative measures. Having a credit risk appetite provides:
\u2022 Clarity about the credit risks that ING is prepared to assume, target setting and prudent risk
management. Credit risk appetite is used as an input for Lending guidances which are made by sector
and/or location;
\u2022 Consistent communication to different stakeholders;
\u2022 Guidelines on how to align reporting and monitoring tools with the organisational structure and strategy;
\u2022 Alignment of business strategies and key performance indicators of business units with ING\u2019s credit risk
appetite through dynamic planning.
The credit risk appetite is set at different levels and dimensions within ING. The credit risk appetite
framework specifies the scope and focus of the credit risk which ING takes and the composition of the credit
portfolio, including its concentration and diversification objectives in relation to business lines, locations,
sectors and products. The credit risk appetite framework has also been extended to embed climate risk
elements. The first steps towards introducing climate risk elements in the credit risk appetite framework
were taken in 2022 and these have further evolved and matured in 2023. The climate risk elements within
the credit risk appetite framework allow for more efficient steering of sector concentrations from a climate
risk perspective.
The credit concentration risk framework is composed of:
\u2022 Country risk concentration: Country risk is the risk that arises due to events in a specific country (or group
of countries). To manage the maximum country loss ING is willing to accept, boundaries are approved by
the SB. The estimated level is correlated to the risk rating assigned to a given country. Actual country
limits are set by means of country instruments, which are monitored monthly and updated, when
needed. For countries with elevated levels of geopolitical or severe economic cycle risk, monitoring is
performed on a more frequent basis with strict pipeline and exposure management.
\u2022 Single name and secondary risk concentration: ING has an established credit concentration risk
framework to identify, measure and monitor single name concentration including secondary risk. The
same concept of boundaries and instruments is applicable.
\u2022 Sector and product concentration risk are managed via the credit risk appetite framework.
Credit risk models (*)
Within ING, internal CRR-compliant models are used to determine probability of default (PD), exposure at
default (EAD) and loss given default (LGD) for regulatory and economic capital purposes. These models also
form the basis of ING\u2019s IFRS 9 loan loss provisioning (see \u2018IFRS 9 models\u2019 below). Bank-wide, ING has
implemented approximately 100 credit risk models, for regulatory capital, economic capital and loan loss
provisioning purposes.
There are two main types of PD, EAD and LGD models used throughout the bank:
\u2022 Statistical models are created where a large set of default or detailed loss data is available. They are
characterised by sufficient data points to facilitate meaningful statistical estimation of the model
parameters. The model parameters are estimated with statistical techniques based on the data set
available.
\u2022 Hybrid models are statistical models supplemented with knowledge and experience of experts from risk
management and front-office staff, literature from rating agencies, supervisors and academics. These
models are only used for \u2018low default portfolios\u2019, where limited historical defaults exist.
Credit risk rating process (*)
The majority of risk ratings are based on a risk rating (PD) model that complies with the minimum
requirements detailed in CRR/CRDIV, ECB Supervisory Rules and European Banking Authority (EBA)
guidelines. This concerns all borrower types and segments.
ING\u2019s PD rating models are based on a 1-22 internal risk rating scale (1 = highest rating; 22 = lowest rating)
referred to as the \u2018master scale\u2019, which roughly corresponds to the rating grades that are assigned by
external rating agencies, such as Standard & Poor\u2019s, Moody\u2019s and Fitch. For example, an ING rating of 1
corresponds to an S&P/Fitch rating of AAA and a Moody\u2019s rating of Aaa; an ING rating of 2 corresponds to an
S&P/Fitch rating of AA+ and a Moody\u2019s rating of Aa1, and so on.
The 22 internal risk rating grades are composed of the following categories:
\u2022 Investment grade (risk rating 1-10);
\u2022 Non-investment grade (risk rating 11-17);
\u2022 Performing Restructuring (risk rating 18-19);
\u2022 Non-performing (risk rating 20-22).
The first three categories (1-19) are risk ratings for performing loans. Ratings are calculated in IT systems
with internally developed models, based on manually or automatically fed data, or for part of the non-
performing loans set by the global or regional credit restructuring department. Under certain conditions, the
outcome of a manually fed model can be challenged through a rating appeal process. For securitisation
portfolios, the external ratings of the tranche in which ING has invested are leading indicators.
Risk ratings assigned to clients are reviewed at least annually, with the performance of the underlying
models monitored regularly. Some of these models are global in nature, such as those for large corporates,
commercial banks, insurance companies, central governments, funds, fund managers, project finance and
leveraged companies. Other models are more regional or country-specific: there are PD models for small
and medium enterprises (SMEs) in the Netherlands, Belgium, Poland as well as residential mortgage and
consumer loan models in the various retail markets.
Rating models for Retail clients are predominantly statistically driven and automated, such that ratings can
be updated on a monthly basis. Rating models for large corporates, institutions and banks include both
statistical characteristics and manual input, with the ratings being manually updated at least annually.
More frequent reviews (e.g. quarterly) are performed where considered necessary, for example portfolios
and clients most at risk of being impacted by the Russian invasion of Ukraine and expected spillover effects.
In line with evolving regulatory expectations on models and emerging industry practices ING has embarked
a multi-year redevelopment process of its credit risk models. This is also in line with ING\u2019s model governance
to ensure continuous improvement of models.
Credit risk portfolio (*)
ING\u2019s credit exposure is mainly related to lending to individuals (also referred to as consumer lending, all
Retail) and businesses (referred to as business lending, both in Retail and Wholesale) followed by
investments in bonds and securitised assets, and money market (Wholesale). Loans to individuals are
mainly mortgage loans secured by residential property. Loans (including guarantees issued) to businesses
are often collateralised, but may be unsecured based on the internal analysis of the borrower\u2019s
creditworthiness. Bonds in the investment portfolio are generally unsecured, but predominantly consist of
bonds issued by central governments and EU and/or OECD-based financial institutions. Secured bonds, such
as mortgage-backed securities and asset-backed securities are secured by the underlying diversified pool of
assets (commercial or residential mortgages, car loans and/or other assets) held by the securities issuer. For
money market, exposure is mainly deposits to central banks. The last major credit risk source involves pre-
settlement exposures which arise from trading activities, including derivatives, repurchase transactions and
securities lending/borrowing transactions. This is also commonly referred to as counterparty credit risk.\u00a0
Portfolio analysis per business line (*)
Outstandings per line of business (*)1, 2, 3
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers & Growth Markets
Corporate line
Total
Rating class
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Investment grade
1 (AAA)
52,665
89,686
310
324
34,373
32,492
2,284
2,529
89,631
125,032
2-4 (AA)
67,034
49,320
7,089
7,871
52,566
40,498
6
12
126,694
97,701
5-7 (A)
95,320
79,292
44,026
45,471
88,051
61,422
147
320
227,543
186,504
8-10 (BBB)
123,081
129,709
118,340
117,172
27,955
56,046
2,357
2,833
271,733
305,760
Non-investment grade
11-13 (BB)
57,348
56,409
57,652
55,945
36,756
46,657
4
151,756
159,016
14-16 (B)
12,234
13,693
16,872
14,224
12,459
11,662
41,565
39,579
17 (CCC)
1,122
1,858
2,129
2,021
985
1,014
392
299
4,628
5,192
Performing Restructuring loans
18 (CC)
2,523
3,564
1,363
1,304
594
519
4,481
5,386
19 (C)
535
731
876
962
437
490
1,848
2,183
Non-performing loans
20-22 (D)
4,051
4,354
4,586
4,762
3,036
2,592
11,673
11,708
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
Industry
Private Individuals
2,330
32
165,447
163,243
193,610
191,556
361,387
354,831
Central Banks
70,139
80,006
21,740
23,541
2,269
1,495
94,147
105,043
Natural Resources
40,511
44,695
1,259
1,160
624
694
42,394
46,549
Real Estate
24,904
26,426
23,675
22,648
2,936
3,439
51,515
52,513
Commercial Banks
37,342
42,036
177
194
6,006
5,721
2,515
2,911
46,040
50,862
Non-Bank Financial Institutions
55,313
54,274
1,400
1,379
890
504
286
438
57,889
56,594
Central Governments
45,316
41,622
2,124
2,880
5,180
3,838
1
1,016
52,621
49,356
Transportation & Logistics
27,106
25,474
4,105
4,038
1,679
1,471
32,890
30,982
Utilities
23,324
22,683
2,024
1,865
160
150
25,509
24,698
Food, Beverages & Personal Care
13,503
13,681
7,307
7,356
2,576
2,585
23,386
23,623
Services
9,128
9,926
11,596
11,606
1,276
981
24
33
22,023
22,546
General Industries
12,039
11,731
5,680
5,753
3,406
3,381
21,126
20,865
Lower Public Administration
6,211
6,020
6,885
5,921
10,608
9,725
23,704
21,666
Other
48,748
50,009
21,563
22,014
6,519
5,805
92
104
76,922
77,932
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
Outstandings per line of business (*) - continued1, 2, 3
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers & Growth Markets
Corporate line
Total
Region
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Europe
Netherlands
54,938
61,143
155,792
154,253
390
254
2,366
2,898
213,486
218,548
Belgium
24,171
27,144
90,450
88,767
1,294
669
7
115,921
116,580
Germany
26,152
24,441
478
463
128,407
127,764
31
63
155,067
152,730
Poland
20,346
16,350
9
49
28,962
26,831
49,317
43,229
Spain
11,047
10,491
109
71
27,049
25,649
35
25
38,240
36,237
United Kingdom
28,587
27,735
150
152
125
185
112
107
28,974
28,179
Luxembourg
23,805
26,113
4,880
4,953
677
639
15
29,363
31,720
France
21,528
18,484
698
643
2,410
4,448
14
1
24,650
23,576
Rest of Europe
65,157
77,814
367
400
20,001
18,750
32
24
85,558
96,989
America
78,851
80,444
201
190
1,841
1,795
222
358
81,114
82,786
Asia
49,851
46,291
69
73
90
121
2,365
2,504
52,374
48,989
Australia
9,409
9,817
14
16
45,963
46,281
2
2
55,389
56,116
Africa
2,071
2,348
24
28
2
5
2,098
2,381
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
1 Based on credit risk measurement contained in lending, pre-settlement, money market and investment activities.
2 Based on the total amount of credit risk in the respective column using ING\u2019s internal credit risk measurement methodologies. Economic sectors (industry) below 2% are not shown separately but grouped in Other.
3 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Overall portfolio (*)
During 2023, ING\u2019s portfolio size decreased by \u20ac6.5 billion (-0.69%) to \u20ac931.6 billion outstanding. Foreign
exchange rate changes had a negative impact on the portfolio growth, mainly in WB, decreasing total
outstanding by \u20ac4.6 billion, driven by the depreciation of the US dollar (-3.8%) against the euro, Australian
dollar (-3.4%) and Turkish lira (-42.1%), partly compensated by the Polish zloty (+6.8%).
Rating distribution (*)
Overall, the rating class distribution remained stable in 2023. The share of investment grade rating classes
increased from 76.2% to 76.8%, while the share of non-investment grade decreased from 21.7% to 21.2%.
Performing restructuring outstandings decreased from 0.8% to 0.7% of the total portfolio, whereas non-
performing loans increased from 1.2% to 1.3%. The decrease in AAA and the increase in AA was mainly due
to lower Central banks/Central Governments exposure in AAA-rated countries, partly driven by the
downgrade of the USA to AA rating.
With respect to the rating distribution within the business lines, in WB, investment grade remained at 81.2%,
where non-investment grade exposures increased to 17.1% (from 16.8%) compared to 2022. Performing
Restructuring assets decreased from 1.0% to 0.7% of total Wholesale Banking assets. The share of non-
performing loans for WB remained stable at 1.0%.
The non-investment grade portfolio of Retail Benelux increased from 28.9% to 30.3% of the portfolio, which
is explained primarily by rating migration in mortgages in Belgium. Performing restructuring remained flat
at 0.9% whereas NPL improved to 1.8% (from 1.9%) in 2023.
In Retail Challengers & Growth Markets, the distribution across rating classes remained stable in 2023.
Overall share of investment grade increased from 75.2% to 78.9%. NPL increased to 1.2% (from 1.0%).
Industry (*)
The industry breakdown is presented in accordance with the NAICS definition. Total volume decreased in
2023 from \u20ac938.1 billion to \u20ac931.6 billion (-0.7%), mainly witnessed in Netherlands (-2.3%) and in
Luxembourg (-7.4%) due to a decrease in outstanding at Central Banks. The largest part of our book in terms
of outstandings is in private individuals with 38.8% (2022: 37.8%). Private individuals accounted for 67%
outstanding in Germany, 67% in Spain, 66% Australia and 55% in the Netherlands. The increase in WB
Private individuals is following the discontinuation of Retail Banking France which led to the transfer of the
Retail individuals portfolio from Retail Banking to Wholesale Banking.
Looking at sectors in the Business Lending portfolio, the most notable decrease in outstanding, next to
Central Banks, was in Natural Resources (\u20ac-4.2 billion).
Outstandings by economic sectors and geographical area (*) 1
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
Luxembourg
France
Rest of Europe
America
Asia
Australia
Africa
2023
Private Individuals
116,530
44,637
103,151
14,860
25,452
128
3,347
2,472
14,179
149
121
36,340
20
361,387
Central Banks
31,017
9,756
18,945
2,530
489
4,335
4,853
6,166
13,668
2,379
9
94,147
Natural Resources
2,623
1,346
1,017
685
129
3,789
2,511
429
10,608
8,237
9,785
941
295
42,394
Real Estate
16,907
10,986
1,111
2,184
1,551
420
3,563
2,901
3,492
3,323
1,367
3,709
51,515
Commercial Banks
1,217
404
4,050
601
353
4,488
5,070
4,155
6,757
9,833
8,182
719
210
46,040
Non-Bank Financial Institutions
2,573
1,457
5,710
2,532
652
6,837
4,631
4,274
4,269
20,118
3,884
950
57,889
Central Governments
1,620
9,046
699
8,614
5,491
41
79
2,255
9,384
13,752
520
526
593
52,621
Transportation & Logistics
3,860
2,198
1,277
1,598
658
2,113
596
784
8,177
3,511
7,044
456
618
32,890
Utilities
2,419
1,634
3,516
792
912
2,723
480
619
4,469
4,424
1,306
2,041
173
25,509
Food, Beverages & Personal Care
7,138
3,127
550
2,242
490
540
1,505
1,250
2,455
2,652
1,140
281
18
23,386
Services
5,073
8,463
1,725
1,325
71
745
502
380
1,052
1,576
469
642
22,023
General Industries
5,746
2,604
1,193
2,827
333
199
649
287
3,661
2,848
761
18
21,126
Lower Public Administration
253
6,607
5,349
669
350
249
3,488
356
1,550
7
4,826
23,704
Other
16,510
13,657
6,774
7,858
1,309
2,615
1,326
1,356
10,532
9,141
4,120
1,562
163
76,922
Total
213,486
115,921
155,067
49,317
38,240
28,974
29,363
24,650
85,558
81,114
52,374
55,389
2,098
931,552
Rating class
Investment grade
170,067
71,730
136,675
31,772
29,583
24,299
24,083
18,692
56,404
63,652
44,481
44,139
24
715,602
Non-Investment grade
40,399
40,236
16,929
15,785
8,134
4,508
5,013
5,713
25,967
16,003
6,770
10,715
1,776
197,949
Performing restructuring
1,433
799
349
830
230
2
105
122
1,983
245
72
132
26
6,327
NPL grade
1,587
3,156
1,114
929
293
165
162
124
1,205
1,213
1,051
403
272
11,673
Total
213,486
115,921
155,067
49,317
38,240
28,974
29,363
24,650
85,558
81,114
52,374
55,389
2,098
931,552
1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Outstandings by economic sectors and geographical area (*) 1
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
Luxembourg
France
Rest of Europe
America
Asia
Australia
Africa
2022
Private Individuals
114,625
44,193
101,529
13,767
24,865
138
3,486
2,731
13,654
161
131
35,528
24
354,831
Central Banks
35,202
14,338
21,041
1,060
347
427
6,820
35
18,092
4,962
2,695
24
105,043
Natural Resources
3,084
1,356
809
746
169
4,442
2,764
470
12,154
8,771
10,398
1,028
361
46,549
Real Estate
17,586
10,112
1,388
2,374
1,391
413
3,797
3,155
3,378
3,474
1,180
4,263
2
52,513
Commercial Banks
1,358
265
3,974
551
402
4,933
4,480
4,371
6,368
9,945
12,041
1,765
409
50,862
Non-Bank Financial Institutions
2,710
1,041
5,054
2,299
99
8,229
4,489
3,220
4,495
19,971
4,091
896
56,594
Central Governments
3,342
7,716
1,179
6,578
4,578
46
175
1,797
8,444
13,979
333
636
551
49,356
Transportation & Logistics
3,967
2,183
608
1,300
690
1,787
583
733
7,808
3,378
6,806
531
608
30,982
Utilities
1,551
1,630
2,814
679
1,227
2,953
572
980
4,302
4,347
1,545
1,897
200
24,698
Food, Beverages & Personal Care
7,249
3,002
573
2,334
475
739
1,667
469
2,668
3,245
942
248
13
23,623
Services
4,819
8,816
1,254
1,101
67
685
808
1,066
1,120
1,821
357
632
22,546
General Industries
5,430
2,689
1,007
2,849
311
330
604
245
3,152
2,926
1,311
9
20,865
Lower Public Administration
272
5,638
5,197
644
200
313
3,126
402
1,310
4,564
21,666
Other
17,353
13,602
6,302
6,946
1,416
3,058
1,164
1,179
10,952
9,457
4,891
1,424
188
77,932
Total
218,548
116,580
152,730
43,229
36,237
28,179
31,720
23,576
96,989
82,786
48,989
56,116
2,381
938,061
Rating class
Investment grade
174,971
76,244
130,285
27,501
28,556
23,160
26,053
17,545
64,884
64,206
39,903
41,476
213
714,997
Non-Investment grade
40,325
36,036
20,967
14,596
7,330
4,634
5,442
5,814
27,617
17,615
7,638
13,914
1,858
203,786
Performing restructuring
1,508
984
579
422
105
41
80
16
2,903
311
124
257
239
7,569
Non-performing loans
1,743
3,316
899
710
246
344
145
201
1,584
654
1,325
470
72
11,708
Total
218,548
116,580
152,730
43,229
36,237
28,179
31,720
23,576
96,989
82,786
48,989
56,116
2,381
938,061
1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Portfolio analysis per geographical area (*)
The portfolio analysis per geographical area re-emphasises the international distribution of ING\u2019s credit
portfolio. The share of the Netherlands in the overall portfolio (ex-Central Banks) reduced to 21.8% (2022:
22.0%).
The most noticeable trend in the Netherlands was the decrease in exposure with central banks (-\u20ac4.2
billion). Outstandings to private individuals are at 63.9% (2022: 62.5%) of total outstandings (excl. Central
Banks). In Belgium, no substantial changes were observed in the portfolio.
In terms of rating distribution in individual countries, the total share of investment grade/non-investment
grade remains substantial for the Netherlands at 98.6% (2022: 98.5%) and in Belgium 96.6% (2022: 96.3%).
Performing restructuring grade assets remained flat in the Netherlands at 0.7%, whereas Belgium
decreased from 0.8% to 0.7%. The NPL share decreased in 2023, from 0.8% to 0.7% in the Netherlands, and
from 2.8% to 2.7% in Belgium.
In Challengers & Growth Markets, ING has a sizeable residential mortgages portfolio in Germany, Australia,
Spain and Poland.
The top five countries within Rest of Europe based on outstandings were: Italy (\u20ac18.7 billion), Romania
(\u20ac11.5 billion), Switzerland (\u20ac11.2 billion), T\u00fcrkiye (\u20ac7.2 billion) and Ireland (\u20ac4.7 billion).
In Europe, outside the Benelux, rating distribution in most countries remained stable. The most noticeable
changes in rating distribution were observed in Rest of Europe, where the development of the Russian
portfolio caused a decrease into Performing Restructuring from 3.0% to 2.3%. Note the paragraph on
Russian exposures in section 'Risk management at ING Group'. Apart from Russia, noticeable changes
occurred in the UK, where NPL decreased from 1.2% to 0.6%.
In terms of rating distribution for the Americas region, an increase in NPL is observed to 1.5% (from 0.8%),
whereas in Asia, NPL decreased from 2.7% to 2.0%. In Africa, NPL increased from 3.0% to 13.0%, driven by
one well-covered file.
Credit risk mitigation (*)
ING uses various techniques and instruments to mitigate the credit risk associated with an exposure and to
reduce the losses incurred subsequent to a default by a customer. The most common terminology used in
ING for credit risk protection is \u2018cover\u2019. While a cover may be an important mitigant of credit risk and an
alternative source of repayment, generally it is ING\u2019s practice to lend on the basis of the customer\u2019s
creditworthiness rather than exclusively relying on the value of the cover.
Cover forms (*)
Within ING, there are two distinct forms of covers. First, where the asset has been pledged to ING as
collateral or security, ING has the right to liquidate it should the customer be unable to fulfil its financial
obligation. As such, the proceeds can be applied towards full or partial compensation of the customer's
outstanding exposure. This may be tangible (such as cash, securities, receivables, inventory, plant and
machinery, and mortgages on real estate properties) or intangible (such as patents, trademarks, contract
rights and licences). Second, where there is a third-party obligation, indemnification or undertaking (either
by contract and/or by law), ING has the right to claim from that third party an amount if the customer fails
on its obligations. The most common examples are guarantees, such as parent guarantees, export credit
insurances or third-party pledged mortgages. Insurance or reinsurance covers, including comprehensive
private risk insurance (CPRI) may be recognised as guarantees and effectively function in an equivalent
manner. ING accepts credit risk insurance companies and export credit agencies (ECAs) as cover providers.
Cover valuation methodology (*)
General guidelines for cover valuation are established with the objective of ensuring consistent application
within ING. These also require that the value of the cover is monitored on a regular basis. Covers are
revalued periodically and whenever there is reason to believe that the market is subject to significant
changes in conditions. The frequency of monitoring and revaluation depends on the type of cover.
The valuation method also depends on the type of covers. For asset collateral, the valuation sources can be
the customer\u2019s balance sheet (e.g. inventory, machinery and equipment), nominal value (e.g. cash and
receivables), market value (e.g. securities and commodities), independent valuations (e.g. commercial real
estate) and market indices (e.g. residential real estate). For third-party obligations, the valuation is based on
the value that is attributed to the contract between ING and that third party.
Where collateral values are used in the calculation of stage 3 individual loan loss provisions, haircuts may be
applied to the valuation in specific circumstances, to sufficiently include all relevant factors impacting future
cash flows. ING applies haircuts to the collateral values of real estate, shipping and aviation assets that are
used in the calculation of the loss-given-default in recovery scenarios. The haircut reflects the risks of
adverse price developments between the moment of valuation of an asset and the actual settlement/cash
receipt.
Cover values (*)
This section provides insight into the types of cover and the extent to which exposures benefit from
collateral or guarantees. The disclosure differentiates between risk categories (lending, investment, money
market and pre-settlement). The most relevant types of cover include mortgages, financial collateral (cash
and securities) and guarantees. ING obtains cover that is eligible for credit risk mitigation under CRR/CRDIV,
as well as cover that is not eligible. Collateral covering financial market transactions is valued on a daily
basis, and as such not included in the following tables. To mitigate the credit risk arising from financial
markets transactions, the bank enters into legal agreements governing the exchange of financial collateral
(high-quality government bonds and cash).
The cover values are presented for the total portfolio of ING, both the performing and non-performing
portfolio. Our definition of non-performing is explained in detail in \u2018Credit restructuring\u2019 (below).
The next table gives an overview of the collateralisation of the ING\u2019s total portfolio.
Cover values including guarantees received (*)
in \u20ac million
Cover type and value
Collateralisation
2023
Outstandings
Mortgages
Financial Collateral
Guarantees
Other covers
No Cover
Partially covered
Fully covered
Consumer lending
360,124
804,994
22,401
25,269
29,070
6.2%
2.0%
91.8%
Business lending
363,826
162,491
26,333
115,944
428,531
35.2%
22.5%
42.3%
Investment and money market
158,506
\u2014
\u2014
1,040
549
99.0%
0.6%
0.4%
Total lending, investment and money market
882,455
967,485
48,735
142,252
458,149
34.8%
10.2%
55.0%
of which NPL
11,653
8,880
1,609
3,204
9,241
25.7%
26.9%
47.4%
Pre-settlement
49,096
Total Group
931,552
Cover values including guarantees received (*)
in \u20ac million
Cover type and value
Collateralisation
2022
Outstandings
Mortgages
Financial Collateral
Guarantees
Other covers
No Cover
Partially covered
Fully covered
Consumer lending
353,323
700,961
5,626
24,231
42,817
6.2%
7.6%
86.2%
Business lending
379,405
167,122
29,501
118,294
438,864
37.5%
22.3%
40.2%
Investment and money market
141,432
5
1,213
2
99.1%
0.6%
0.3%
Total lending, investment and money market
874,160
868,083
35,132
143,738
481,683
34.8%
12.9%
52.3%
of which NPL
11,637
7,738
1,007
3,648
3,045
25.2%
25.7%
49.2%
Pre-settlement
63,901
Total
938,061
Excluding the pre-settlement portfolio, 55.0% (2022: 52.3%) of ING\u2019s outstandings were fully collateralised in
2023. Since investments traditionally do not require covers, the percentage for \u2018no covers\u2019 in this portfolio is
above 95%. However, 99% of the investment outstanding is investment grade. Improved economic
conditions in ING\u2019s main markets contributed to improved collateral valuations, observed in consumer
lending.
Consumer lending portfolio (*)
The consumer lending portfolio accounts for 38.7% (2022: 37.7%) of ING\u2019s total outstanding, primarily
consisting of residential mortgage loans and other consumer lending loans. As a result, most collateral
consists of mortgages. Mortgage values are collected in an internal central database and in most cases
external data is used to index the market value. A significant part of ING\u2019s residential mortgage portfolio is in
the Netherlands (34.8%), Germany (28.0%), Belgium including Luxembourg (13.3%) and Australia (10.9%).
Note that the large increase in Financial Collateral and decrease in Other covers is related to a
reclassification of certain cover types.
Business lending portfolio (*)
Business lending accounts for 39.1% (2022: 40.4%) of ING\u2019s total outstanding. Business lending presented in
this section does not include pre-settlement, investment and money market exposures.
Credit quality (*)
Credit quality outstandings\u00a0 (*)
in \u20ac million
2023
2022
Performing not past due
795,942
799,990
Business lending performing past due
8,825
7,659
Consumer lending performing past due
846
780
Non-performing
11,653
11,691
Total lending and investment
817,266
820,120
Money market
65,189
54,039
Pre-settlement
49,096
63,901
Total
931,552
938,061
Past due obligations (*)
Retail Banking measures its portfolio in terms of payment arrears and determines on a monthly basis if
there are any significant changes in the level of arrears. This methodology is applicable to private
individuals, as well as business lending. An obligation is considered \u2018past due\u2019 if a payment of interest or
principal is more than one day late. ING aims to help its customers as soon as they are past due by
reminding them of their payment obligations. In its contact with the customers, ING aims to solve the
(potential) financial difficulties by offering a range of measures (e.g. payment arrangements, restructuring).
If the issues cannot be cured, for example because the customer is unable or unwilling to pay, the contract
is sent to the recovery unit. The facility is downgraded to risk rating 20 (non-performing) when the facility or
obligor \u2013 depending on the level at which the non-performing status is applied \u2013 is more than 90 days past
due and to risk rating 21 or 22 in case of an exit scenario.
ING has aligned the regulatory concept of non-performing with that of the definition of default. Hence, in
WB, obligors are classified as non-performing when a default trigger occurs:
\u2022 ING believes the borrower is unlikely to pay. The borrower has evidenced significant financial difficulty, to
the extent that it will have a negative impact on the future cash flows of the financial asset. The
following events could be seen as indicators of financial difficulty:
\u2022 The borrower (or third party) has started insolvency proceedings;
\u2022 A group company/co-borrower has NPL status;
\u2022 Indication of fraud (affecting the company\u2019s ability to service its debt);
\u2022 There is doubt as to the borrower\u2019s ability to generate stable and sufficient cash flows to service its
debt;
\u2022 Restructuring of debt.
\u2022 ING has granted concessions relating to the borrower\u2019s financial difficulty, the effect of which is a
reduction in expected future cash flows of the financial asset below current carrying amount.
\u2022 The obligor has failed in the payment of principal, interest or fees, the total past due amount is above the
materiality threshold and this remains the case for more than 90 consecutive days.
Further, WB has an individual name approach, using early warning indicators to signal possible future issues
in debt service.
Ageing analysis (past due but performing): Consumer lending portfolio by geographic area, outstandings (*)
in \u20ac million
2023
2022
Region
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Europe
Belgium
223
43
29
295
294
27
18
339
Germany
89
40
18
147
68
34
13
116
Poland
76
8
5
89
59
8
4
71
Netherlands
67
24
6
97
36
10
5
51
Luxembourg
21
2
2
25
43
4
2
48
Spain
19
13
6
38
13
9
5
27
Rest of Europe
64
19
12
94
62
16
8
86
America
1
1
1
1
Asia
1
Australia
43
15
1
59
29
11
2
42
Total
602
164
79
846
604
119
57
780
The past due but performing consumer lending outstanding increased by \u20ac66 million, mainly due to
increase in 31-60 (+\u20ac45 million) and 61-90 (+\u20ac23 million). The largest increase was observed in the
Netherlands (+\u20ac47 million) and Germany (+\u20ac31 million) mainly in the 1-30-day bucket; the largest decrease
was seen in Belgium (-\u20ac44 million) driven by the decrease in the 1-30 bucket.
Ageing analysis (past due but performing): Business lending portfolio by geographic area, outstandings (*)
in \u20ac million
2023
2022
Region
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Past due for >90 days
Total
Europe
Belgium
929
98
11
1,037
579
49
10
639
United Kingdom
623
659
128
1,410
1,147
77
512
1,736
Luxembourg
577
8
11
596
302
1
303
Netherlands
509
10
12
531
730
30
15
775
Poland
346
26
10
383
279
35
14
329
France
58
132
190
83
6
90
Germany
131
110
1
242
44
16
60
Rest of Europe
972
2
2
977
474
239
1
1
715
America
2,508
101
41
2,650
1,901
67
19
1,986
Asia
284
22
306
553
48
601
Australia
501
1
502
359
61
4
2
426
Total
7,437
1,148
240
8,825
6,452
629
575
4
7,659
Total past due but performing outstanding of business lending increased by \u20ac1.2 billion. Increase is observed
in the 1-30 days (\u20ac1.0 billion) past due bucket and in the 31-60 days (\u20ac0.5 billion), partly offset by a
decrease in the 61\u201390 days past due bucket (-\u20ac336 million), driven by the United Kingdom (-\u20ac383 million).\u00a0
Credit restructuring (*)
Global Credit Restructuring (GCR) is the dedicated and independent department that deals with non-
performing loans and loans that hold a reasonable probability that ING will end up with a loss, if no specific
action is taken. GCR handles accounts or portfolios requiring an active approach, which may include
renegotiation of terms and conditions and business or financial restructuring. The loans are managed by
GCR or by units in the various regions and business units. ING uses three distinct statuses to categorise the
management of clients with (perceived) deteriorating credit risk profiles, i.e. there is increasing doubt as to
the performance and the collectability of the client\u2019s contractual obligations:
\u2022 Watch list: Usually, a client is first classified as watch list when there are concerns of any potential or
material deterioration in credit risk profile that may affect the ability of the client to adhere to its debt
service obligations or to refinance its existing loans. Watch list status requires more than usual attention,
increased monitoring and quarterly reviews. Some clients with a watch list status may develop into a
restructuring status or even a recovery status.
\u2022 Restructuring: A client is classified as restructuring when there are concerns about the client\u2019s financial
stability, credit worthiness, and/or ability to repay, but where the situation does not require the
termination or acceleration of facilities or the liquidation of collateral. ING\u2019s actions aim to maintain the
going concern status of the client by:
\u2022 restoring the client\u2019s financial stability;
\u2022 supporting the client\u2019s turnaround;
\u2022 restoring the balance between debt and equity; and
\u2022 restructuring the debt to a sustainable situation.
\u2022 Recovery: A client is classified as in recovery when ING and/or the client concludes that the client\u2019s
financial situation cannot be restored and a decision is made to terminate the (credit) relationship or
even to enter into bankruptcy. ING prefers an amicable exit, but will enforce and liquidate the collateral
or claim under the guarantees if deemed necessary.
Watch list, restructuring and recovery accounts are reviewed at least quarterly by the front office, GCR and
the relevant credit risk management executives.
Forbearance (*)
Forbearance occurs when a client is unable to meet their financial commitments due to financial difficulties
they face or are about to face and ING grants concessions towards them. Forborne assets are assets in
respect of which forbearance measures have been granted.
Forbearance may enable clients experiencing financial difficulties to continue repaying their debt.
For business clients, ING mainly applies forbearance measures to support clients with fundamentally sound
business models that are experiencing temporary difficulties with the aim of maximising the client\u2019s
repayment ability and therewith avoiding a default situation or helping the client to return to a performing
situation.
For ING retail units, clear criteria have been established to determine whether a client is eligible for the
forbearance process. Specific approval mandates are in place to approve the measures, as well as
procedures to manage, monitor and report the forbearance activities.
ING reviews the performance of forborne exposures at least quarterly, either on a case-by-case (business) or
on a portfolio (retail) basis.
All exposures are eligible for forbearance measures, i.e. both performing (risk ratings 1-19) and non-
performing (risk ratings 20-22) exposures. ING uses specific criteria to move forborne exposures from non-
performing to performing or to remove the forbearance statuses that are consistent with the corresponding
European Banking Authority (EBA) standards. An exposure is reported as forborne for a minimum of two
years. An additional one-year probation period is applied to forborne exposures that move from non-
performing back to performing.
Summary Forborne portfolio (*)
in \u20ac million
2023
2022
Business line
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Outstandings
Of which:
performing
Of which:
non-
performing
% of total
portfolio
Wholesale
Banking
6,063
3,919
2,144
1.8%
8,359
5,880
2,478
2.7%
Retail Banking
7,026
4,128
2,898
1.4%
8,080
4,973
3,107
1.6%
Total
13,089
8,047
5,042
1.5%
16,438
10,853
5,585
2.0%
Summary Forborne portfolio by forbearance type (*)
in \u20ac million
2023
2022
Forbearance
type
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Loan
modification
11,881
7,550
4,331
1.4%
15,317
10,428
4,889
1.9%
Refinancing
1,208
497
711
0.1%
1,121
426
695
0.1%
Total
13,089
8,047
5,042
1.5%
16,438
10,853
5,585
2.0%
As of 31 December 2023, ING\u2019s total forborne assets decreased by \u20ac3.3 billion compared to 31 December
2022. WB decreased by \u20ac2.3 billion and Retail Banking decreased by \u20ac1.1 billion. The decreases are mainly
caused by passing the two-year probation period following the Covid-19 pandemic.
Wholesale Banking (*)
As of December 2023, WB forborne assets amounted to \u20ac6.1 billion (2022: \u20ac8.4 billion), which represented
1.8% (2022: 2.7%) of the total WB portfolio.
Wholesale Banking: Forborne portfolio by geographical area (*)
in \u20ac million
2023
2022
Region
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Europe
Netherlands
361
301
60
720
630
90
Belgium
454
446
8
659
651
8
Germany
288
148
139
580
466
115
United Kingdom
583
425
158
1,044
721
323
Italy
54
19
34
205
157
48
Norway
6
0
6
33
0
33
Poland
520
519
0
203
189
14
Rest of Europe
1,421
1,142
279
2,176
1,749
427
America
1,025
532
493
1,353
1,032
321
Asia
1,198
277
921
1,107
143
964
Australia
87
87
0
217
132
85
Africa
68
23
45
61
10
51
Total
6,063
3,919
2,144
8,359
5,880
2,478
Wholesale Banking: Forborne portfolio by economic sector (*)
in \u20ac million
2023
2022
Industry
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Natural Resources
788
321
467
1,239
603
636
Real Estate
1,320
1,254
66
2,000
1,917
84
Transportation & Logistics
315
175
139
1,073
868
205
Food, Beverages & Personal
Care
866
465
401
1,082
543
539
Services
284
254
30
697
665
32
Automotive
138
98
40
172
125
46
Utilities
510
255
255
469
255
214
General Industries
145
74
71
255
176
80
Retail
282
104
178
302
227
76
Chemicals, Health &
Pharmaceuticals
571
559
11
191
168
23
Builders & Contractors
133
72
61
168
94
74
Other
712
287
425
710
240
469
Total
6,063
3,919
2,144
8,359
5,880
2,478
The main concentration of forborne assets in a single country was in United States with 13.6% (2022:
11.5%) of the total WB forborne assets.
WB forborne assets decreased by \u20ac2.3 billion compared to 2022, also driven by passing the two-year
probation period following the Covid-19 pandemic. Decrease is mainly visible in the performing forborne
assets (-\u20ac2.0 billion), mainly in the industries Transportation & Logistics, Real Estate and Services. The
decrease was partial offset by an increase for Chemicals, Health and Pharmaceuticals, driven by a few large
individual clients.
WB's forborne assets are mainly concentrated in Real Estate, Food Beverages & Personal Care, Natural
Resources, Chemicals, Health & Pharmaceuticals, and Utilities. These five economic sectors accounted for
67% of the total WB forborne outstandings.
Retail Banking (*)
As of the end of December 2023, Retail Banking forborne assets totalled \u20ac7.0 billion, which represented 1.4%
of the total Retail Banking portfolio. The majority of forborne exposures were in private individuals with
50.5%.
Retail Banking: Forborne portfolio by geographical area (*)
in \u20ac million
2023
2022
Region
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Europe
Netherlands
1,483
981
502
2,832
2,043
789
Belgium
2,153
838
1,315
2,644
1,331
1,314
Germany
1,309
1,064
246
804
610
194
Poland
852
522
330
588
309
279
T\u00fcrkiye
25
15
10
64
31
32
Italy
123
51
71
131
52
79
Romania
135
49
86
124
53
71
Spain
138
118
21
35
15
20
Rest of Europe
88
58
30
73
48
25
America
21
20
13
12
Asia
2
1
1
3
1
1
Australia
697
411
286
768
467
302
Africa
1
Total
7,026
4,128
2,898
8,080
4,973
3,107
The main concentration of forborne assets in a single country was in Belgium with 30.6% (2022: 32.7%) of
total Retail Banking forborne assets and 45.4% (2022: 42.3%) of the non-performing forborne assets. Next to
that, Netherlands had 21.1% (2022: 35.0%) of the total Retail forborne assets and Germany 18.6%
(2022:10.0%). The increase in Germany is driven by mortgages, where clients that choose for a repayment
percentage below a certain threshold, though contractually allowed, are conservatively considered forborn.
Non-performing loans (*)
ING\u2019s loan portfolio is under constant review. Loans to obligors that are considered more than 90 days past
due and above applicable thresholds are reclassified as non-performing. For business lending portfolios,
there generally are reasons for declaring a loan non-performing prior to the obligor being 90 days past due.
These reasons include, but are not limited to, ING\u2019s assessment of the customer\u2019s perceived inability to meet
its financial obligations, or the customer filing for bankruptcy or bankruptcy protection.
The table below represents the breakdown by industry of credit risk outstandings that have been classified
as non-performing.
Non-performing Loans: outstandings by economic sector and business lines (*)1
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers &
Growth Markets
Total
Industry
2023
2022
2023
2022
2023
2022
2023
2022
Private Individuals
4
2,210
2,174
2,206
1,954
4,419
4,129
Natural Resources
669
1,369
60
34
25
17
754
1,421
Food, Beverages & Personal
Care
565
672
363
438
157
122
1,085
1,233
Transportation & Logistics
437
367
69
165
65
51
572
583
Services
101
119
415
448
66
61
582
628
Real Estate
592
172
398
486
64
54
1,053
712
General Industries
111
114
270
268
115
100
497
482
Builders & Contractors
124
139
291
244
162
110
577
493
Retail
207
98
121
107
67
39
395
244
Utilities
331
387
12
7
6
7
348
401
Chemicals,
Health &
Pharmaceuticals
101
175
97
115
35
20
233
310
Telecom
378
288
9
12
3
3
390
303
Other
412
440
270
260
66
52
748
753
Total
4,034
4,340
4,583
4,759
3,036
2,592
11,653
11,691
1 Based on lending and investment outstandings.
Non-performing loans: outstandings by economic sectors and geographical area (*)
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
France
Luxembourg
Rest of Europe
America
Asia
Australia
Africa
2023
Private Individuals
609
1,535
885
225
235
3
8
45
489
2
2
380
1
4,419
Natural Resources
30
60
1
23
55
164
31
369
20
754
Food, Beverages & Personal Care
281
157
1
131
139
7
158
82
128
1,085
Transportation & Logistics
110
50
2
51
47
20
1
168
49
1
2
72
572
Services
121
342
2
55
2
3
8
13
37
582
Real Estate
40
297
53
55
9
36
16
7
519
21
1,053
General Industries
145
127
49
99
2
7
24
42
497
Builders & Contractors
113
181
2
135
22
91
32
577
Retail
51
82
36
52
2
14
149
7
395
Utilities
14
5
21
18
153
138
348
Chemicals, Health & Pharmaceuticals
31
77
13
25
64
11
12
233
Telecom
12
1
28
3
13
56
277
390
Other
28
239
42
55
2
1
6
23
46
128
179
748
Total
1,586
3,153
1,114
929
293
165
124
162
1,193
1,210
1,050
403
272
11,653
Non-performing Loans: outstandings by economic sectors and geographical area (*)
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
France
Luxembourg
Rest of Europe
America
Asia
Australia
Africa
2022
Private Individuals
574
1,538
739
185
194
4
11
36
470
3
4
370
1
4,129
Natural Resources
57
33
14
53
432
77
649
85
21
1,421
Food, Beverages & Personal Care
310
179
24
109
173
7
228
77
126
1,233
Transportation & Logistics
232
58
1
36
47
20
2
154
24
7
1
583
Services
136
375
2
43
5
3
2
21
40
628
Real Estate
89
376
54
84
25
19
7
47
11
712
General Industries
127
142
17
78
31
2
26
58
482
Builders & Contractors
65
187
2
86
20
101
32
493
Retail
31
85
38
26
18
1
13
22
7
2
244
Utilities
6
6
26
23
17
194
129
401
Chemicals, Health & Pharmaceuticals
51
100
2
15
14
100
28
310
Telecom
24
1
3
5
270
303
Other
40
232
48
38
50
10
79
75
130
51
753
Total
1,742
3,312
899
710
246
344
196
145
1,578
654
1,324
470
72
11,691
In 2023, the NPL portfolio stayed relatively flat at \u20ac11.7 billion. An increase in Challengers & Growth retail (+
\u20ac0.4 billion) was offset by decreases in Wholesale Banking (-\u20ac0.3 billion) and Retail Benelux (-\u20ac0.2 billion).
The increase in Challengers & Growth Markets was mainly witnessed in private individuals. In Wholesale
Banking, the decrease in the Natural Resources sector was partially compensated by an increase in Real
Estate sector, especially in the Americas. The top three countries by NPL outstanding are Belgium, the
Netherlands and the Americas.
Loan loss provisioning (*)
ING recognises loss allowances based on the expected credit loss (ECL) model of IFRS 9, which is designed to
be forward-looking. The IFRS 9 impairment requirements are applicable to on-balance sheet financial assets
measured at amortised cost or fair value through other comprehensive income (FVOCI), such as loans, debt
securities and lease receivables, as well as off-balance-sheet items such as undrawn loan commitments,
financial- and non-financial guarantees issued.
ING distinguishes between two types of calculation methods for credit loss allowances:
\u2022 Collective 12-month ECL (Stage 1) and collective lifetime ECL (Stage 2) for portfolios of financial
instruments, as well as collective lifetime ECL for credit-impaired exposures (Stage 3) below \u20ac1 million;
\u2022 Individual lifetime ECL for credit-impaired (Stage 3) financial instruments with exposures above \u20ac1
million.
IFRS 9 models (*)
ING's IFRS 9 models leverage on the internal rating-based (IRB) models (PD, LGD, EAD), which include certain
required conservatism. To include IFRS 9 requirements, such regulatory conservatism is removed from the
ECL parameters (PD, LGD and EAD). The IFRS 9 models apply two other types of adjustments to the IRB ECL
parameters: (i) to the economic outlook and (ii) for Stage 2 and Stage 3 assets only, to the lifetime horizon.
The IFRS 9 model parameters are estimated based on statistical techniques and supported by expert
judgement.
ING has aligned the definition of default for regulatory purposes with the definition of \u2018credit-impaired\u2019
financial assets under IFRS 9 (Stage 3). ING has also aligned its definition of default between IFRS9 and the
regulatory technical standards (RTS) and EBA guidelines. More information can be found in section 1.5.6 of
the consolidated financial statements.
Climate and environmental risks in IFRS 9 models (*)
Climate risk drivers (physical and transition risks) can reduce the ability of businesses and households to
fulfil their obligations due on existing lending contracts. These may also lead to depreciation/ erosion of
collateral values which would translate into higher credit losses and loan-to-value ratios in the lending
portfolio of ING.
At this point in time it is not yet possible to incorporate climate risk separately into IFRS 9 ECL models given
the lack of sufficient empirical historical data and data limitations in the risk assessments on client level.
Where climate and environmental factors have impacted the economy in the recent past or present, these
impacts will currently be implicitly embedded in ING's IFRS9 ECL models through the projected
macroeconomic indicators (e.g. indirectly via GDP growth and unemployment rates). We note however that
our ECL models are primarily sensitive to the short-term economic outlook as we use a three-year time
horizon for macroeconomic outlook, after which a mean reversion approach is applied.
With regard to our evaluation of climate-related matters, where such events have already occurred (e.g.
floods, stranded assets etc.), the impact of such events is individually assessed in the calculation of Stage 3
Individual provisions or management adjustments to ECL models. For example, we consider whether
affected assets have suffered from a significant increase in credit risk (or are credit impaired) and whether
the ECL is appropriate.
Over the near-term time horizon, ING plans to continue to refine its methodologies to evaluate climate risks.
ING is working on putting into practice quantitative methodologies for climate and environmental (C&E) risk
identification, materiality assessment and risk appetite setting. Refer to ESG risk paragraph for further
details on ESG risk management. Going forward, ING aims to continue to close the gaps on climate risk data,
which will enable us to embed climate risks eventually into the IFRS 9 ECL models.
Portfolio quality (*)
The table below describes the portfolio composition over the different IFRS 9 stages and rating classes. The
Stage 1 portfolio represents 91.5% (2022: 91.5%) of the total gross carrying amounts, mainly composed of
investment grade, while Stage 2 makes up 7.4% (2022: 7.3%) and Stage 3 makes up 1.2% (2022: 1.2%) of
the total gross carrying amounts, respectively.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2, 3
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
87,071
1
439
87,510
1
2-4 (AA)
132,159
8
2,553
2
134,711
9
5-7 (A)
231,018
24
6,188
6
237,206
30
8-10 (BBB)
302,967
85
17,004
24
319,971
108
Non-Investment grade
11-13 (BB)
157,387
226
19,273
93
176,661
319
14-16 (B)
26,414
164
19,336
455
45,750
618
17 (CCC)
617
10
4,125
233
4,742
242
Performing Restructuring
18 (CC)
4,617
402
4,617
402
19 (C)
1,919
221
1,919
221
Non-performing loans
20-22 (D)
11,956
3,887
11,956
3,887
Total
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac151 billion) and other positions (\u20ac9 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac67 billion, mainly pre-settlement exposures) included in credit
outstandings but not in the gross carrying amounts.
2 Includes impact from change in accounting policy as disclosed in table Changes in gross carrying amounts and loan loss provisions.
3 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross Carrying
Amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
100,885
2
284
101,169
2
2-4 (AA)
98,181
5
2,493
1
100,675
6
5-7 (A)
177,617
23
4,596
4
182,214
27
8-10 (BBB)
321,308
98
14,714
29
336,023
127
Non-investment grade
11-13 (BB)
155,910
277
17,365
91
173,275
368
14-16 (B)
23,649
168
19,386
471
43,035
639
17 (CCC)
7,671
8
4,572
194
12,244
202
Performing Restructuring
18 (CC)
5,198
595
5,198
595
19 (C)
2,116
293
2,116
293
Non-performing loans
20-22 (D)
11,708
3,841
11,708
3,841
Total
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac150.1 billion) and other positions (\u20ac4.4 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac116.1 billion, mainly guarantees, letters of credit and pre-
settlement exposures) included in credit outstandings but not in the gross carrying amounts.
2 IAS 37 provisions are established for non-credit replacement guarantees not in the scope of IFRS 9. Total IAS 37 provisions (\u20ac109 million) are excluded.
Changes in gross carrying amounts and loan loss provisions (*)
The table below provides a reconciliation by stage of the gross carrying amount and allowances for loans
and advances to banks and customers, including loan commitments and financial guarantees. The transfers
of financial instruments represent the impact of stage transfers upon the gross carrying/nominal amount
and associated allowance for ECL. This includes the net-remeasurement of ECL arising from stage transfers,
for example, moving from a 12-month (Stage 1) to a lifetime (Stage 2) ECL measurement basis.
The net-remeasurement line represents the changes in provisions for facilities that remain in the same
stage.
Please note the following comments with respect to the movements observed in the table below:
\u2022 The opening balance is impacted by a change in accounting policy following the adoption of IFRS 17,
more specifically for loans with death waivers that no longer meet the \u2018solely payments of principal and
interest\u2019 (SPPI) criterion (\u20ac-55 million loan loss provisions impact) which are no longer recorded at
amortised cost, and a change in policy for non-financial guarantees that are subject to contractual
indemnification rights which led to a reclassification of the existing IAS 37 provision (\u20ac109 million loan
loss provisions impact) and a remeasurement of these non-financial guarantees (\u20ac42 million loan loss
provisions impact). Reference is made to Note 1 'Basis of preparation and significant changes in the
current reporting period'.
\u2022 Stage 3 gross carrying amount increased slightly to \u20ac12.0 billion as at 31 December 2023, as new inflow
into NPL (credit impaired) in 2023 was only partly offset by repayments, derecognitions and write-offs.
Stage 3 provisions remained more or less flat at \u20ac3.9 billion.
\u2022 Stage 2 gross carrying amount increased by \u20ac0.1 billion from \u20ac75.4 billion (after changes in accounting
policies) as at 31 December 2022 to \u20ac75.5 billion as at 31 December 2023. An increase of Stage 2
exposure, driven by the implementation of an updated methodology for interest-only mortgages in the
Netherlands, was offset by outflow due to improved macro economic outlook, decrease of exposure due
to sales and repayments (including Russian exposure), forborne customers returning to Stage 1 after the
probation period has ended and other improved risk drivers. As a result, Stage 2 provisions also
decreased by \u20ac0.3 billion to \u20ac1.4 billion as of 31 December 2023.
Changes in gross carrying amounts and loan loss provisions (*)1, 2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
Impact of changes in accounting policies
37,078
9
4,704
13
158
73
41,939
95
Adjusted opening balance
922,300
590
75,429
1,692
11,866
3,914
1,009,595
6,196
Transfer into 12-month ECL (Stage 1)
11,832
28
-11,583
-239
-249
-36
-247
Transfer into lifetime ECL not credit impaired (Stage 2)
-29,470
-67
30,185
449
-716
-105
277
Transfer into lifetime ECL credit impaired (Stage 3)
-2,053
-10
-1,775
-115
3,828
978
853
Net remeasurement of loan loss provisions
-149
-94
59
-184
New financial assets originated or purchased
195,775
204
195,775
204
Financial assets that have been derecognised
-121,991
-72
-14,239
-215
-1,475
-266
-137,705
-553
Net drawdowns and repayments
-38,758
-2,525
-229
-41,511
Changes in models/risk parameters
8
10
84
102
Increase in loan loss provisions
-58
-204
714
452
Write-offs
-3
-3
-38
-38
-1,070
-1,070
-1,111
-1,111
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-12
-15
258
231
Closing balance
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac520 million of which \u20ac483 million related to IFRS 9 eligible financial assets, -\u20ac31 million related to non-credit replacement guarantees and \u20ac68 million to modification gains and losses
on restructured financial assets.
Changes in gross carrying amounts and loan loss provisions (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
890,386
501
49,476
1,016
12,072
3,851
951,934
5,368
Transfer into 12-month ECL (Stage 1)
8,513
21
-8,105
-142
-408
-47
-168
Transfer into lifetime ECL not credit impaired (Stage 2)
-42,439
-76
43,222
730
-784
-90
564
Transfer into lifetime ECL credit impaired (Stage 3)
-3,524
-8
-1,216
-82
4,740
1,234
1,144
Net remeasurement of loan loss provisions
8
223
199
430
New financial assets originated or purchased
248,443
228
248,443
228
Financial assets that have been derecognised
-138,250
-70
-11,312
-94
-2,805
-215
-152,366
-379
Net drawdowns and repayments
-77,907
-1,340
21
-79,226
Changes in models/risk parameters
-8
13
25
30
Increase in loan loss provisions
95
648
1,106
1,849
Write-offs
-1
-1,129
-1,129
-1,129
-1,130
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-15
16
-58
-57
Closing balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Stage 3 Lifetime credit impaired provision includes \u20ac7 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac1.861 million of which \u20ac1.850 million related to IFRS 9 eligible financial assets, -\u20ac3 million related to non-credit replacement guarantees and \u20ac14 million to modification gains and
losses on restructured financial assets.
Modification of financial assets (*)
The table below provides the following information:
\u2022 Financial assets that were modified during the year (i.e. qualified as forborne) while they had a loss
allowance measured at an amount equal to lifetime ECL.
\u2022 Financial assets that were reclassified to stage 1 during the period.
Financial assets modified (*)
in \u20ac million
2023
2022
Financial assets modified during the period
Amortised cost before modification
1,565
1,304
Net modification results
-75
-124
Financial assets modified since initial recognition
Gross carrying amount at 31 December of financial assets for which loss allowance has
changed to 12-month measurement during the period
2,599
2,382
Macroeconomic scenarios and sensitivity analysis of key sources of estimation
uncertainty (*)
Methodology (*)
Our methodology in relation to the adoption and generation of macroeconomic scenarios is described in
this section. We continue to follow this methodology in generating our probability-weighted ECL, with
consideration of alternative scenarios and management adjustments supplementing this ECL where, in
management's opinion, the consensus forecast does not fully capture the extent of recent credit or
economic events. The macroeconomic scenarios are applicable to the whole ING portfolio in the scope of
IFRS 9 ECLs.
The IFRS 9 standard, with its inherent complexities and potential impact on the carrying amounts of our
assets and liabilities, represents a key source of estimation uncertainty. In particular, ING\u2019s reportable ECL
numbers are sensitive to the forward-looking macroeconomic forecasts used as model inputs, the
probability-weights applied to each of the three scenarios, and the criteria for identifying a significant
increase in credit risk. As such, these crucial components require consultation and management judgement,
and are subject to extensive governance.
Baseline scenario (*)
As a baseline for IFRS 9, ING has adopted a market-neutral view combining consensus forecasts for
economic variables (GDP, unemployment) with market forwards (for interest rates, exchange rates and oil
prices). Input from a leading third-party service provider is used to complement the consensus with
consistent projections for variables for which there are no consensus estimates available (most notably
house prices and \u2013 for some countries - unemployment), to generate alternative scenarios, to convert
annual consensus information to a quarterly frequency and to ensure general consistency of the scenarios.
As the baseline scenario is consistent with the consensus view it can be considered as free from any bias.
The relevance and selection of macroeconomic variables is defined by the ECL models under credit risk
model governance. The scenarios are reviewed and challenged by two panels of ING experts. The first panel
consists of (economic) experts from Global Markets Research, risk and modelling, while the second panel
consists of relevant senior managers in ING.
Alternative scenarios and probability weights (*)
Two alternative scenarios are taken into account: an upside and a downside scenario. The alternative
scenarios have statistical characteristics as they are based on the forecast deviations of the leading third-
party service provider.
To understand the baseline level of uncertainty around any forecast, the leading third-party service provider
keeps track of all its deviations (so called forecast errors) of the past 20 years. The distribution of forecast
errors for GDP, unemployment, house prices and share prices is applied to the baseline forecast creating a
broad range of alternative outcomes. In addition, to understand the balance of risks facing the economy in
an unbiased way, the leading third-party service provider runs a survey with respondents from around the
world and across a broad range of industries. In this survey respondents put forward their views of key risks.
Following the survey results, the distribution of forecast errors (that is being used for determining the
scenarios) may be skewed.
For the downside scenario, ING has chosen for the 90th percentile of that distribution because this
corresponds with the way risk management earnings-at-risk is defined within the Group. The upside
scenario is represented by the 10th percentile of the distribution. The applicable percentiles of the
distribution imply a 20 percent probability for each alternative scenario. Consequently, the baseline scenario
has a 60 percent probability weighting. Please note that, given their technical nature, the downside and
upside scenarios are not based on an explicit specific narrative.
Macroeconomic scenarios applied (*)
The macroeconomic scenarios applied in the calculation of\u00a0 loan loss provisions are based on the consensus
forecasts.
Baseline assumptions (*)
The general picture that the consensus conveys is that global economic growth is going through a weak
spell. Inflation has been coming down as energy prices have moderated, demand has weakened and
pandemic-related supply problems have eased. Higher interest rates play their part in slowing demand.
Although central banks could well be done with hiking interest rates \u2013 as inflation continues to fall \u2013 the
lagged impact of past monetary tightening is still feeding through to the real economy. This is expected to
cause GDP growth to come in even weaker in 2024, but pickup thereafter as the negative effects from tight
monetary policy and high inflation fade. The high-interest rate environment is currently causing corrections
in house prices, especially in markets where prices surged during the pandemic. Housing market corrections
are assumed to gradually decrease in strength.
The December 2023 consensus expects global output (as measured by the weighted average GDP growth
rate of ING's 25 main markets) to slow from 2.6 percent in 2022, to 2.4 percent in 2023 and 1.8 percent in
2024. For 2025-2026, economic growth is expected to pick up again to 2.3 percent and 2.4 percent.
The US economy outperformed expectations in 2023, driven by strong consumer spending and fiscal
support. Still, headwinds have been building up, in part driven by the much higher interest rates currently
experienced. While an outright recession is not expected, the consensus does foresee a marked slowdown in
economic activity in the US in 2024. After this, the US economy is expected to gather strength again in
2025. The consensus expects the growth rate of the US economy to fall from 2.2 percent in 2023 to 0.9
percent in 2024 and to recover to 2 percent on average in 2025-2026.
The eurozone economy is facing broad stagnation as it deals with the impact of the war in Ukraine, energy
crisis, and higher interest rates. While inflation is coming down, the impact of last year\u2019s purchasing power
shock is still being felt. Monetary tightening works with a lag, which will still affect economic activity next
year. Overall, the eurozone economy is forecasted to have grown by just 0.5 percent in 2023, but Germany
has gone through recession reflecting its large (energy-intensive) manufacturing sector, and exposure to a
disappointing Chinese economy. For next year, the recovery is expected to be very modest as consensus
expects the eurozone to grow by only 0.8 percent in 2024, before recovering to 1.4 percent on average in
2025-2026.
Elsewhere in Europe, the outlook is mixed. In Poland, after an expected 0.4 percent growth in 2023, the
economy is expected to recover by 2.5 percent in 2024 led by household consumption growth. Wage
growth is set to remain strong while inflation has subsided substantially. The consensus expectation for
T\u00fcrkiye is to see growth slow substantially in 2024 with unemployment remaining around 10 percent for the
foreseeable future. The consensus sees economic growth in T\u00fcrkiye slowing from 3.5 percent in 2023, to 2.1
percent in 2024 and increasing again to 3.3 percent on average in 2025-2026. The Russian economy has
started to recover from the 2022 recession, but growth is set to moderate after 1.7 percent in 2023 to 1.2
percent on average in 2024-2026.
2023 was supposed to be the year of a strong reopening for China, but growth did not meet expectations.
Weak global demand for goods has resulted in a weaker than expected industrial performance and the real
estate sector continues to be a source of concern. For the 2024-2026 period, economic growth is expected
to come in at only 4.2 percent despite increased stimulus.
The global economic slowdown and tighter monetary policy continue to weigh on economic growth in
Australia. After growing by 1.7 percent in 2023, the outlook sees a growth rate of 1.3 percent for 2024 and
some pick-up to 2.4 percent and 2.5 percent for 2025-2026. Unemployment is expected to run up a little
more, from 4.1 percent in 2023 to 4.4 percent, but decrease again thereafter.
When compared to the December 2022 consensus forecast, used for the 2022 Annual Report, the December
2023 forecast assumes somewhat better economic circumstances in 2023 but weaker for 2024. The
forecast assumes to have Global GDP increased by 2.4 percent in 2023 (compared to 1.3 percent assumed
before) and is expected to grow by 1.8 percent in 2024 (2.4 percent assumed before). The upgrade for 2023
reflects the better than expected economic performance of the US and eurozone as a recession on the back
of the energy crisis was avoided, while the downgrade for 2024 reflects the impact of substantial monetary
tightening.
Alternative scenarios and risks (*)
Because of the possible consequences of geopolitical risks, uncertainty surrounding the forecasts was higher
in 2022. During 2023, the uncertainty level around the forecasts gradually decreased. To take this into
account, ING applies normal levels of dispersion in the alternative scenarios used for year-end 2023
provisioning. For year-end 2022 half-widened dispersion levels were used, by which the near-term
dispersion of the forward-looking distributions (from which the alternative scenarios are derived) was larger
than in normal times.
The baseline scenario assumes a further easing of inflation in 2024 and relatively resilient labour markets.
However, a longer period of weakness, due to even more concerning geopolitical tensions, persistent
elevated inflation and a slowdown in China could lead to a more protracted and deeper economic
slowdown. As such, the balance of risks to the baseline outlook is negative and the alternative scenarios
have a downward skew in line with the outcomes of the Global Risk Survey from a leading third-party
service provider. The downward skew remained stable compared to what has been applied for year-end
2022, continuing to reflect risks related to possible escalation of geopolitical tensions, a prolonged surge in
inflation and tightening monetary policy.
The downside scenario, though technical in nature, sees for most countries a recession in 2024.
Unemployment increases strongly in this scenario and house prices in most countries show outright falls.
The downside scenario captures a possible escalation of geopolitical tensions, a prolonged surge in inflation
and further slowing in China.
The upside scenario \u2013 while equally technical in nature \u2013 reflects the possibility of a better economic outturn
if consumers spend more of their excess savings, geopolitical risks subside and China stimulus works out
more strongly than expected.
Management adjustments applied this year (*)
In times of volatility and uncertainty where portfolio quality and the economic environment are changing
rapidly, models alone may not be able to accurately predict losses. In these cases, management
adjustments can be applied to appropriately reflect ECL. Management adjustments can also be applied
where the impact of the updated macroeconomic scenarios is over- or under-estimated by the IFRS 9
models.
ING has internal governance frameworks and controls in place to assess the appropriateness of all
management adjustments, involving first- and second lines of defence.
Management adjustments to ECL models (*)
in \u20ac million
2023
2022
Economic sector based adjustments
36
71
Inflation and interest rate increases / second-order impact adjustments
351
334
Mortgage portfolio adjustments
126
105
Other post model adjustments
64
-57
Total management adjustments
577
453
The economic sector-based adjustments of \u20ac36 million as of 31 December 2023 (\u20ac71 million as at 31
December 2022) fully relates to Business Banking clients that have benefited from Covid-19-related
government support programmes in the Netherlands. In line with 2022, it became clearer during 2023 that
the Covid-19 pandemic had less impact than expected on the number of defaults in related sectors with
relatively high tax debt to be repaid; the economic sector-based management adjustment has therefore
been partially released. The remaining management adjustment is related to sectors with relatively high tax
debt to be repaid\u00a0 and is expected to materialise with delayed effect. The \u20ac10 million adjustment on the
livestock farming sector in the Netherlands that was also included in December 2022, related to nitrogen
reduction targets has been fully released following improved risk metrics.
ING has performed further assessment for both WB and Retail Banking on the impact of second-order
effects. The second-order adjustments as at December 2022 captured a wider range of indirect effects such
as supply chain issues, staffing shortages and high energy prices. In 2023, the risks from high inflation and
rapidly increasing interest rates became more apparent compared to other indirect effects, causing a shift
in focus of this adjustment. This resulted in an overall adjustment for inflation and interest rate increases of
\u20ac351 million in total as at 31 December 2023, of which \u20ac138 million (31 December 2022: \u20ac164 million)
relates to Retail Banking segments and \u20ac213 million (31 December 2022: \u20ac170 million) to the Wholesale
Banking segment.
As the credit risk models in Retail Banking generally assume that inflation and interest rate increases risks
materialise via other risk drivers such as GDP and unemployment rates with a delay, an overlay approach
was determined. The methodology considers debt-to-income ratios and the percentage of loans that are
expected to reprice within one year to timely estimate the expected credit losses related to reduced
repayment capacity and affordability for private individuals and business clients in the Retail Banking
segment.
In Wholesale Banking, the IFRS 9 credit risk models mostly leverage on GDP growth as a generic
macroeconomic variable. High inflation and rapidly increasing interest rates however trigger economic
heterogeneity (i.e. some businesses benefit, while others suffer), as such the current circumstances are
expected to cause more defaults than normally predicted using GDP growth. A sector-based heatmap
approach was used to adjust the probability of default for clients in sectors that are expected to be
significantly impacted by high inflation and increased interest rates, including refinancing risk. The
adjustment is predominantly visible in the commercial real estate sector and reflected in Stage 1 and Stage
2.
The overall mortgage portfolio adjustment as at 31 December 2023 increased to \u20ac126 million (31 December
2022: \u20ac105 million), as an adjustment of \u20ac115 million has been recognised in 2023 following new insights
from a risk segmentation model that captures affordability, repayment and refinancing risk on performing
mortgage customers with a bullet loan in the Netherlands.
The mortgage portfolio adjustment that relates to significant increase of house prices was reduced to \u20ac11
million as at 31 December 2023, coming from \u20ac105 million as at December 2022. This decrease is reflecting
the decline in house prices in various countries, subsequent materialisation into increased model-based ECL
as well as an improved market outlook on the recovery value of residential real estate. ING still recognises a
management adjustment related to house prices in Stage 2 and Stage 3 on the mortgage portfolios in
Germany to maintain an appropriate level of ECL. The management adjustments are determined by
calculating the impact of lower house prices on loan-to-value (LTV) and loss given default (LGD).
Other post-model adjustments (PMAs) mainly relate to the impact of model redevelopment or recalibration
and periodic model assessment procedures that have not been incorporated in the ECL models yet; the
impact on total ECL can be positive or negative. These can result from both regular model maintenance and
ING\u2019s multi-year programme to update ECL models for the definition of default. These adjustments will be
removed once updates to the specific models have been implemented. The change in balance compared to
the previous reporting date is due to i) released PMAs because of model updates that have been
implemented, and ii) new PMAs recognised for new redevelopments and recalibrations.
Analysis on sensitivity (*)
The table below presents the analysis on the sensitivity of key forward-looking macroeconomic inputs used
in the ECL collective-assessment modelling process and the probability weights applied to each of the three
scenarios. The countries included in the analysis are the most significant geographic regions in ING and for
Wholesale Banking the US is the most significant in terms of both gross contribution to reportable ECL, and
sensitivity of ECL to forward-looking macroeconomics. Accordingly, ING considers these portfolios to present
the most significant risk of resulting in a material adjustment to the carrying amount of financial assets
within the next financial year. ING also observes that, in general, the WB business is more sensitive to the
impact of forward-looking macroeconomic scenarios.
The purpose of the sensitivity analysis is to enable the reader to understand the extent of the impact from
the upside and downside scenario on model-based reportable ECL.
In the table below, the real GDP is presented in percentage year-on-year change, the unemployment in
percentage of total labour force and the house price index (HPI) in percentage year-on-year change.
Sensitivity analysis as at December 2023\u00a0 (*)
2024
2025
2026
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
1.3
3.3
2.8
214
20%
310
Unemployment
3.7
3.3
3.3
HPI
10.4
11.2
4.0
Baseline scenario
Real GDP
0.8
1.6
1.5
282
60%
Unemployment
4.1
4.3
4.5
HPI
0.9
3.0
3.9
Downside scenario
Real GDP
-1.7
-1.2
0.1
487
20%
Unemployment
5.9
7.2
8.1
HPI
-10.9
-7.4
3.7
Germany
Upside scenario
Real GDP
1.4
3.1
1.6
472
20%
525
Unemployment
2.6
2.0
1.7
HPI
0.9
6.6
8.0
Baseline scenario
Real GDP
0.5
1.3
1.2
513
60%
Unemployment
3.0
3.0
3.0
HPI
-1.4
3.4
4.5
Downside scenario
Real GDP
-2.4
-1.4
0.3
615
20%
Unemployment
4.5
5.2
5.5
HPI
-6.0
-0.8
0.4
Belgium
Upside scenario
Real GDP
1.5
2.7
2.3
568
20%
619
Unemployment
5.3
5.0
4.9
HPI
1.3
5.6
4.5
Baseline scenario
Real GDP
0.9
1.5
1.8
604
60%
Unemployment
5.6
5.5
5.4
HPI
0.4
5.2
3.9
Downside scenario
Real GDP
-1.3
-0.2
1.2
713
20%
Unemployment
7.3
8.0
7.9
HPI
-2.2
3.9
2.6
United States
Upside scenario
Real GDP
1.8
3.2
3.4
102
20%
165
Unemployment
4.1
3.3
3.1
HPI
0.6
8.7
8.7
Baseline scenario
Real GDP
0.9
1.9
2.1
144
60%
Unemployment
4.5
4.5
4.4
HPI
-0.7
3.5
3.3
Downside scenario
Real GDP
-1.3
-1.4
-0.1
292
20%
Unemployment
6.6
8.2
8.8
HPI
-4.2
-2.7
-3.0
\u00b9 Excluding management adjustments.
Sensitivity analysis as at December 2022 (*)
2023
2024
2025
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
2.2
2.3
2.9
274
20%
381
Unemployment
4.0
3.9
3.8
HPI
13.0
11.8
2.5
Baseline scenario
Real GDP
0.2
1.4
1.8
349
60%
Unemployment
4.5
4.8
4.9
HPI
3.7
3.7
2.4
Downside scenario
Real GDP
-4.2
0.7
0.9
583
20%
Unemployment
6.4
7.8
8.7
HPI
-8.0
-6.5
2.2
Germany
Upside scenario
Real GDP
1.7
2.3
1.8
606
20%
745
Unemployment
2.6
2.2
1.8
HPI
0.6
3.9
6.2
Baseline scenario
Real GDP
-0.7
1.4
1.5
726
60%
Unemployment
3.2
3.1
3.1
HPI
-1.8
0.9
2.7
Downside scenario
Real GDP
-4.8
0.1
1.0
942
20%
Unemployment
4.8
5.3
5.6
HPI
-6.2
-3.3
-1.4
Belgium
Upside scenario
Real GDP
1.7
2.1
2.1
535
20%
596
Unemployment
5.5
5.5
5.3
HPI
2.3
2.6
3.1
Baseline Scenario
Real GDP
0.0
1.6
1.8
584
60%
Unemployment
6.1
6.3
6.1
HPI
1.4
2.2
2.5
Downside scenario
Real GDP
-3.2
1.0
1.5
692
20%
Unemployment
7.5
8.5
8.4
HPI
-1.2
0.9
1.2
United States
Upside scenario
Real GDP
3.0
1.5
3.4
100
20%
221
Unemployment
3.4
2.8
2.5
HPI
3.7
7.4
8.1
Baseline Scenario
Real GDP
0.2
1.1
2.3
188
60%
Unemployment
4.3
4.4
3.9
HPI
2.5
2.2
2.8
Downside scenario
Real GDP
-4.1
0.2
0.6
442
20%
Unemployment
6.4
7.7
8.2
HPI
-1.2
-3.8
-3.5
\u00b9 Excluding management adjustments.
When compared to the sensitivity analysis of 2022, the macroeconomic inputs for 2023 are somewhat
more favourable and for 2024 less favourable as the lagged impact of monetary tightening is still feeding
through to the real economy. The sensitivities for 2022 contain half-widened dispersion around the upside
and downside scenarios, whereas half-widened dispersion was removed for these scenarios for the 2023
sensitivity analysis following a continued decrease in forecast uncertainty.
On a total ING level, the unweighted model ECL for all collective provisioned clients in the upside scenario
was \u20ac2,510 million, in the baseline scenario \u20ac2,802 million, and in the downside scenario \u20ac3,668 million. This
reconciles as follows to the reported ECLs:
Reconciliation of reportable collective ECL to total ECL (*)
in \u20ac million
2023
2022
Total reportable collective provisions
2,856
3,209
ECL from individually assessed impairments
2,406
2,439
ECL from management adjustments
577
453
Total ECL
5,839
6,101
Criteria for identifying a significant increase in credit risk (SICR) (*)
All assets and off-balance-sheet items that are in scope of IFRS 9 impairment and which are subject to
collective ECL assessment are allocated a 12-month ECL if deemed to belong in Stage 1, or a lifetime ECL if
deemed to belong in Stages 2 or 3. An asset belongs in Stage 2 if it is considered to have experienced a
significant increase in credit risk since initial origination or purchase. ING considers the credit risk of an asset
to have significantly increased when either a threshold for absolute change in lifetime probability of default
(PD) or a relative change in lifetime PD is reached.
It should be noted that the lifetime PD thresholds are not the only drivers of stage allocation. An asset can
also change stages as a result of other triggers, such as having over 30 days arrears, being on a watch list or
being forborne. Refer to section 1.5.6 of Note 1 \u2018Basis of preparation and significant accounting policies\u2019 for
an exhaustive list. Furthermore, this analysis is rudimentary in the sense that other parameters would
change when an asset changes stages.
Absolute lifetime PD threshold
The absolute threshold is a fixed value calibrated per portfolio/segment and provides a fixed threshold that,
if exceeded by the difference between lifetime PD at reporting date and lifetime PD at origination, triggers
Stage 2 classification. The expert-based thresholds for the absolute change in lifetime PD vary between
75bps for Retail portfolios, 100bps for WB and 250bps for SMEs, based on the characteristics of the specific
portfolio. ING is in the process of refining the thresholds on a portfolio level. These have already been
implemented for part of the portfolio, resulting in calibrated instead of expert-based absolute lifetime PD
thresholds.
Relative lifetime PD threshold
The relative threshold defines a relative increase of the lifetime PD beyond which a given facility is classified
in Stage 2 because of significant increase in credit risk. The relative threshold is dependent on the individual
PD assigned to each facility at the moment of origination and a scaling factor calibrated in the model
development phase that is optimised depending on the observed default rates and overall average riskiness
of the portfolio. While the scaling factor is associated with a whole portfolio/segment, the PD at origination
is facility-specific and, in this sense, the relative threshold may differ facility by facility.
Ultimately the relative threshold provides a criterion to assess whether the ratio (i.e. increase) between
lifetime PD at reporting date and lifetime PD at origination date is deemed a significant increase in credit
risk. If the threshold is breached, SICR is identified and Stage 2 is assigned to the given facility.
The threshold for the relative change in lifetime PD is inversely correlated with the PD at origination; the
higher the PD at origination, the lower the threshold. The logic behind this is to allow facilities originated in
very favourable ratings to downgrade for longer without the need of a Stage 2 classification. In fact, it is
likely that such facilities will still be in favourable ratings even after a downgrade of a few notches. On the
contrary, facilities originated in already unfavourable ratings grades are riskier and even a single-notch
downgrade might represent a significant increase in credit risk and thus a tighter threshold will be in place.
Still, the relative threshold is relatively sensitive for investment grade assets while the absolute threshold
primarily affects non-investment grade assets.
Average threshold ratio
In the table below the average increase in PD at origination needed to be classified in Stage 2 is reported,
taking into account the PD at origination of the facilities included in each combination of asset class and
rating quality. In terms of rating quality, assets are divided into 'investment grade' and 'non-investment
grade' facilities. Rating 18 and 19 are not included in the table since facilities are not originated in these
ratings and they constitute a staging trigger of their own (i.e. if a facility is ever to reach rating 18 or 19 at
reporting date, it is classified in Stage 2). In the table, values are weighted by IFRS 9 exposure and shown for
both year-end 2022 and year-end 2023.
To represent the thresholds as a ratio (i.e. how much should the PD at origination increase in relative terms
to trigger Stage 2 classification) the absolute threshold is recalculated as a relative threshold for disclosure
purposes. Since breaching only relative or absolute threshold triggers Stage 2 classification, the minimum
between the relative and recalculated absolute threshold is taken as value of reference for each facility.
Quantitative SICR thresholds (*)
2023
2022
Average threshold ratio
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Asset class category
Mortgages
2.5
2.3
2.7
2.3
Consumer lending
2.9
2.1
2.8
1.8
Business lending
2.7
2.1
2.8
2.1
Governments and financial institutions
3.0
1.9
3.0
1.9
Other Wholesale Banking
2.8
1.8
2.8
1.9
As it is apparent from the disclosures above, as per ING\u2019s methodology, the threshold is tighter the higher
the riskiness at origination of the assets, illustrated by the difference between the average threshold applied
to investment grade facilities and non-investment grade facilities.
Sensitivity of ECL to PD lifetime PD thresholds
The setting of PD threshold bands requires management judgement and is a key source of estimation
uncertainty. On Group level, the total model ECL on performing assets, which is the ECL collective-
assessment without taking management adjustments into account, is \u20ac1,412 million. To demonstrate the
sensitivity of the ECL to these PD thresholds bands, hypothetically solely applying the upside scenario would
result in total model ECL on performing assets of \u20ac1,054 million and a decrease in the Stage 2 ratio by -0.5
percentage point, while solely applying the downside scenario in our models would result in total model ECL
on performing assets of \u20ac2,290 million and an increase in the Stage 2 ratio by 3.8 percentage-point.
Market risk
Introduction (*)
Market risk is the risk that movements in market variables, such as interest rates, equity prices, foreign
exchange rates, credit spreads and real estate prices negatively impact the bank\u2019s earnings, capital, market
value or liquidity position. Market risk either arises through positions in banking books or trading books. The
banking book positions are intended to be held for the long term (or until maturity) or for the purpose of
hedging other banking book positions. The trading book positions are typically held with the intention of
short-term trading or to hedge other positions in the trading book. This means that financial instruments in
the trading books should be free of trade restrictions. Policies and processes are in place to monitor the
inclusion of positions in either the trading or banking book as well as to monitor the transfer of risk between
the trading and banking books.
ING recognises the importance of sound market risk management and bases its market risk management
framework on the need to identify, assess, control and manage market risks. The approach consists of five
recurring activities: risk identification, risk assessment, risk control, risk monitoring and risk reporting.
Governance (*)
A governance framework has been established defining specific roles and responsibilities of business
management units, market risk management units, and internal approval bodies per activity.
Supervision of market risk falls under the responsibility of the EB/MBB and is delegated to the ALCO function,
where ALCO Bank is the highest approval authority and sets the market risk appetite. ALCO Bank monitors
ING\u2019s adherence to the risk appetite for market risk and sets additional limits where appropriate. These limits
are cascaded through the organisation through lower level ALCOs. This ALCO structure facilitates top-down
risk management, limit setting, limit monitoring and control of market risk.\u00a0
FR maintains a limit framework in line with ING\u2019s Risk Appetite Framework. The businesses are responsible
for adhering to the limits which are reviewed on an annual basis and are ultimately approved by the ALCO
Bank. Limit excesses are reported to senior management in line with the ALM Risk Appetite Statement
Setting procedure and Market Risk in the Trading Book Framework, upon which the business needs to act
accordingly. To adhere to the established limit framework, ING implements hedging and risk mitigation
strategies that range from the use of traditional market instruments, such as interest rate swaps, to more
sophisticated hedging strategies.
The organisational structure facilitates top-down risk management by recognising that risk taking and risk
management occur to a large extent at the regional/local level. Bottom-up reporting from regional/local
units to head office units allows each management level to assess the market risks relevant at the
respective levels.
Several committees govern communication between the parties involved in market risk management:
\u2022 The Market Risk Model Committee (MRMC), is the dedicated authority for the approval of all funding &
liquidity risk, market risk (includes banking and trading risk), counterparty credit risk and business risk
models and parameters for ING Bank within its mandate delegated by ALCO Bank.
\u2022 The Valuation Model Committee approves pricing models for trading and banking books.
Financial Risk provides risk reporting to the EB and MBB, the ALCO Bank and the senior executive
management of related business functions.
The following sections elaborate on the various elements of the risk management framework for:
\u2022 Market risk economic capital;
\u2022 Market risk in banking books;
\u2022 Market risk in trading books.
Market risk in banking books (*)
ING makes a distinction between the trading and banking (non-trading) books. Positions in banking books
originate from the market risks inherent in commercial products that are sold to clients, Group Treasury
exposures, and from the investment of our own funds (core capital). Both the commercial products and the
products used to hedge related market risk exposures are intended to be held until maturity, or at least for
the long term.
Risk transfer (*)
Market risks in the banking book are managed via the risk transfer process. In this process the interest rate,
FX, funding and liquidity risks are transferred from the commercial books through matched funding or
replication to Group Treasury, where centrally managed. The scheme below presents the transfer and
management process of market risks in the banking books.
Risk measurement (*)
The main concepts and metrics used for measuring market risk in the banking book are described below per
risk type.
Interest rate risk in banking book (*)
Interest rate risk in the banking book is defined as the exposure of a bank\u2019s earnings, capital, and market
value to adverse movements in interest rates originated from positions in the banking book.
Governance (*)
The management of interest rate risk follows the Interest Rate Risk in the Banking Book (IRRBB) framework
as approved by ALCO Bank. This framework describes roles, responsibilities, risk metrics, and the policies and
procedures related to interest rate risk management. Furthermore, ALCO Bank reviews and sets the risk
appetite for interest rate risk on an annual basis. The risk appetite is translated into limits for the interest
rate risk metrics.
As a result of this framework, ING centralises interest rate risk management from commercial books (that
capture the products sold to clients) to globally managed interest rate risk books. This enables a clear
demarcation between commercial business results and results based on unhedged interest rate positions.
ING distinguishes between three types of activities that generate interest rate risk in the banking book:
\u2022 Investment of own funds;
\u2022 Commercial business;
\u2022 Group Treasury exposures including strategic interest rate positions.
Group Treasury is responsible for managing the investment of own funds (core capital). Capital is invested
for longer periods to contribute to stable earnings within the risk appetite boundaries set by ALCO Bank. The
main objective is to maximise the economic value of the capital investment book while having stable
earnings.
Commercial activities can result in linear interest rate risk, for example, tenors and duration of new
production and re-pricing of assets differ from those of liabilities. Also, interest rate risk can arise from
customer behaviour and/or convexity risk, depending on the nature of the underlying product
characteristics.
Customer behaviour risk is defined as the potential future (value) loss due to deviations in the actual
behaviour of clients versus the modelled behaviour with respect to the embedded options in commercial
products. General sources of customer behaviour risk, among other things, include the state of the
economy, competition, changes in regulation, legislation and tax regime, developments in the housing
market and interest rate developments.
From an interest rate risk perspective, commercial activities can typically be divided into the following main
product types: savings and current accounts (funds entrusted), demand deposits, mortgages and loans.
Savings and demand deposits are generally invested in such a way that both the value is hedged and the
sensitivity of the margin to market interest rates is minimised. The contractual nature of investments
(assets) implies that the adjustment to market rates (repricing of assets) is not immediate, therefore the
interest rate risk can arise with either positive or negative impact on the income. Interest rate risk is
modelled based on the stability of deposits and the pass-through rate. This takes account of different
elements, such as pricing strategies, volume developments and the level and shape of the yield curve.
Savings volumes are typically assumed to be relatively stable and less sensitive to rate changes.
Interest rate risk for mortgages arises due to prepayment or other embedded optionalities. In modelling this
risk, both interest-rate-dependent pre-payments and constant prepayments, are considered. Next to a
dependence on interest rates, modelled prepayments may include other effects such as loan-to-value,
seasonality and the reset date of the loan. In addition, the interest sensitivity of embedded offered rate
options may be considered.\u00a0
Wholesale Banking loans typically do not experience interest-rate-dependent prepayment behaviour. These
portfolios are match-funded taking the constant prepayment model into account and typically do not
contain significant convexity risk. Wholesale Banking loans can have an all-in rate floor or a floor on a
reference rate.
Customer behaviour in relation to mortgages, loans, savings and demand deposits is modelled, based on
extensive research. However, the substantial change in the interest rate environment makes extensive
research more challenging than before and may increase model risk. Models are backtested and updated
when deemed necessary in an annual procedure. Model parameters and the resulting risk measures are
approved by (local) ALCO and are closely monitored on a monthly basis.
Linear risk transfers take place from commercial business books to the treasury book (Group Treasury), if
necessary, by using estimations of customer behaviour. The originating commercial business is ultimately
responsible for estimating customer behaviour, leaving convexity risk and (unexpected) customer behaviour
risk with the commercial business. Risk measurement and the risk transfer process take place at least
monthly. However, if deemed necessary, additional risk transfers can take place.
The commercial business manages the convexity risk that is the result of products that contain embedded
options, like mortgages. Here the convexity risk is defined as the optionality effects in the value due to
interest rate changes, excluding the first-order effects. In some cases, convexity risk is transferred from the
commercial books to treasury books using cap/floor contracts and swaptions.
In the following sections, the interest rate risk exposures in the banking books are presented. ING quantifies
risk measures from both earnings and value perspectives. Net interest income (NII)-at-Risk is used to provide
the earnings perspective and the net present value (NPV)-at-Risk figures provide the value perspective.
Please note that the interest rate risk that stems from the commercial business is assumed to be linearly
hedged but no additional corrective management actions are taken into account in the NPV-at-Risk
measure. In the NII-at-Risk measure, a more dynamic hedging process is taken into account.
During 2023, the following activities related to the risk measurement for IRRBB were performed:
\u2022 Annual review of the risk appetite for market risks in the banking book including further enhancements;
\u2022 Further assessment and development of sub-risk types, such as tenor basis risk, vega optionality risk and
client behaviour risk;
\u2022 Set up of standardised risk measurement related to global crisis risk;
\u2022 Annual review of the interest rates scenarios used for calculating NII-at-Risk and NPV-at-Risk;
\u2022 Annual savings/current account model updates;
\u2022 Annual update of parameters of prepayment models for market developments;
\u2022 Further enhancement of the IRRBB framework in relation to upcoming regulatory requirements (e.g.
anticipation on implementation and measurement of the upcoming regulatory metric NII SOT,
development of additional requirements coming forward from latest EBA guidelines);
\u2022 Further strengthening of customer behaviour risk and model risk frameworks
Net interest income (NII) at Risk (*)
The NII-at-Risk measures the impact of changing interest rates on the forecasted net interest income
(before tax) of the banking book, excluding the impacts of credit spread sensitivity, fees and fair value
impact. Future projected balance sheet developments are included in this risk metric. NII-at-Risk is a metric
that helps provide insight as to what extent ING's NII under alternative interest rates developments deviates
from what was assumed in our dynamic plan projections.
In its risk management, ING monitors the NII-at-Risk under a three-year timeframe. Interest rates are
stressed during the first year versus the prevailing curve, taking gradual changes over the first year. The rate
changes considered comprise both upward and downward scenarios, as well as parallel (equal movements
across the yield curve) and non-parallel scenarios.
The impact of changing interest rates on ING\u2019s NII is predominantly caused by the following factors:
\u2022 Change in returns of (re-)investments of client deposits;
\u2022 Change in client deposit rates (mainly savings), (partially) tracking changes in market interest rates;
\u2022 Change in the amortization profile of mortgages, due to an increase or decrease in expected
prepayments;
\u2022 Higher/lower returns of (re-)investments of capital investment;
\u2022 Open interest rate positions, leading to changes in return because of different market rates;
\u2022 Assumed volume development of the balance sheet in line with ING's dynamic plan.
For projecting the change in client deposit rates, ING uses a client rate model that describes the relation to
market interest rates and client deposit rates. The model is calibrated under a range of interest rate
scenarios. Per scenario the actual change in client deposit rates may deviate from this calibrated model. The
actual NII development of customer deposits may, indeed, differ from the provided scenarios, depending on,
amongst others, actual interest rate and savings client rate evolution, as well as changes to ING\u2019s balance
sheet composition such as net deposit growth and relative share of savings deposits and non-remunerated
current accounts.
The NII-at-Risk figures in the table below reflect a parallel, linear interest rate movement during a year
('ramped') under the assumption of balance sheet developments in line with the ING's dynamic plan with a
time horizon of one year. The majority of the risk comes from fixed-rate positions, most notably non-
remunerated current accounts and variable-rate savings accounts.
The NII-at-Risk is primarily driven by the difference in sensitivity of client liabilities, mainly savings, versus
the sensitivity of client assets and investments to rate changes. The investment of own funds only impacts
the earnings sensitivity marginally, as only a relatively small part has to be (re)invested within the one-year
horizon.
NII-at-Risk banking book per currency - year one (*)
in \u20ac million
2023
2022
Ramped, unfloored
Ramped, unfloored
parallel \u25bc
parallel \u25b2
parallel \u25bc
parallel \u25b2
By currency
Euro
-165
155
-119
114
US dollar
-12
12
-1
2
Other
-62
69
-23
27
Total
-239
236
-142
142
EUR ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-120bps)
The change in NII under a declining and upward interest rate scenarios may not be equal. This is due to
different expected reactions in prepayment behaviour of mortgages and different pricing developments of
commercial loans and deposits products (mainly savings). This is caused by embedded options, explicit or
implicit pricing floors and other (assumed) pricing factors.
Year-on-year variance analysis (*)
In our customer deposit composition current accounts decreased and term deposits increased. Over 2023
the one-year asset repricing versus liability repricing increased, leading to a higher NII-at-Risk.
In 2023 central banks tightened monetary conditions, a continuation of a trend started in 2022 to counter
high inflation. The interest rates, however, stabilised in the second half of the year as inflation started to
ease. ING applied a dynamic hedging process, by which interest rate risk was transferred from the business
to Group Treasury and subsequently hedged in the markets. This process mitigates interest rate risk
resulting in a lower sensitivity for rate changes of ING's NII. However, the main drivers of a potential change
of NII sensitivity are balance sheet developments, specifically relating to mortgages, loans and savings. In
the eurozone, mortgage production was impacted by an increase in interest rates. Next to the impact on
new production, the prepayment incentive generally decreased due to the increase in interest rates. The
funds entrusted volume did not change significantly. The impact of explicit and implicit floors on both rates
of client assets and savings phased out in the course of the year on the back of the interest rate increases.
Pre-existing hedges, as executed by Group Treasury, were also adjusted continuously throughout the year
to hedge any interest rate risk coming from higher interest rates. Furthermore, ING\u2019s investment of own
funds took place against a lower duration reducing sensitivity. Excluding Model Risk, the total NII-at-Risk
remains relatively limited in comparison to ING\u2019s total interest income.
Net Present Value (NPV) at Risk (*)
NPV-at-Risk measures the impact of changing interest rates on the value of the positions in the banking
book. The NPV-at-Risk is defined as the outcome of an instantaneous increase or decrease in interest rates
from applying currency-specific scenarios. The NPV-at-Risk asymmetry between the downward and upward
shock is mainly caused by convexity risk in the mortgage and savings portfolio.
The full value impact cannot be directly linked to the financial position or profit or loss account, as fair value
movements in banking books are not necessarily reported through the profit or loss account or through
other comprehensive income (OCI). The changes in value are expected to materialise over time in the profit
and loss account if interest rates develop according to forward rates throughout the remaining maturity of
the portfolio. The majority of the risk comes from the investments of own funds and from positions
exhibiting negative convexity due to embedded optionality (most notably variable rate savings rate and
fixed rate mortgages).
NPV-at-Risk banking books per currency (*)
in \u20ac million
2023
2022
unfloored
unfloored
parallel \u25bc
parallel \u25b2
parallel \u25bc
parallel \u25b2
By currency
Euro
-291
-645
392
-926
US dollar
186
-178
137
-147
Other
131
-146
66
-79
Total
27
-969
594
-1,153
EUR ramped (unfloored) is at +/- 110bps (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps (2022: +/-120bps)
Year-on-year variance analysis (*)
The overall NPV sensitivity remained limited in 2023, reflecting of proper risk transfer and hedging process.
The worst case scenario, parallel up, remained relatively unchanged. Most of the year-to-year move is
coming from mortgages, partly offset by savings and derivatives from hedging activities.
IBOR transition (*)
In line with the recommendations of the Financial Stability Board, a fundamental review of important
interest rates benchmarks has been undertaken. Some interest benchmarks have been reformed, while
others have or will be replaced by risk-free rates (RFR) and discontinued. USD LIBOR in its current form
ceased on 30 June 2023, whereas the cessation of GBP, CHF, JPY, and EUR LIBOR rates occurred on 31
December 2021.
To support these changes, the financial sector has issued several guidance papers and other initiatives to
help phase the transition.
To facilitate the transition away from USD LIBOR, for new USD contracts, ING started using the
recommended alternative rates based on SOFR in 2022. Also, during 2022 and 2023, ING sought to ensure
that existing loan and derivative contracts were either transitioned to alternative rates or transition
arrangements agreed, such as taking steps to ensure a large portion of the derivative portfolio was covered
by ISDA fallbacks. Despite extensive and timely communication on the desirability of fully agreeing
transition arrangements before 30 June 2023, some clients have agreed to complete the required work
before the first interest reset date after cessation. A limited number of clients in restructuring or those
subject to sanctions need to rely on existing fallback language or synthetic LIBOR.
Due to the discontinuation of this important rate, ING, its customers, and the financial services industry have
faced and continue to face a number of risks. These risks include legal, financial, operational, reputational
and conduct risk. Legal risks are related to any required changes to existing transactions. Financial risks may
arise due to declining liquidity and may impact a contract directly or the ability to hedge the risks in that
contract. Operational risks arise due to the requirement to adapt IT systems, trade reporting infrastructure
and operational processes. Conduct risk also plays a role, as renegotiation of loan contracts requires active
engagement from all parties to a contract and may lead to negotiations concentrated in a period close to
actual cessation. ING continues to work with the very limited number of clients that are yet to complete the
USD LIBOR transition.
The progress of the IBOR transitioning between 2018 and 2023 was tracked in the global ING IBOR
programme, governed by business line steering committees, which reported to a central IBOR steering
committee. The programme coordinated the actions necessary to manage the required changes to internal
processes and systems, including pricing, risk management, legal documentation, hedge arrangements, as
well as the impact on customers. The limited amount of remaining USD LIBOR contracts continues to be
monitored within the commercial business lines following the closure of the bank-wide IBOR programme in
November 2023. The ING Benchmark Committee continues to monitor market developments and reform
plans for other rates, to anticipate the impact on any related risks.
One such development concerns the plans published by the Polish National Working Group, which advises
the market to be ready for a cessation of WIBOR and WIBID reference rates at the end of 2027 (originally
expected in 2025, but in the last quarter of 2023 the cessation date was postponed to the end of 2027) with
the offering of financial products using the new benchmark (Warsaw Interest Rate Overnight or WIRON) to
progress gradually and no new products using WIBOR and WIBID beyond 1 July 2024. The WIBOR rates are
used in several of our lending and derivative products, and hence a project team has been established to
manage the transition. WIBOR transition is especially important for our Polish subsidiary ING Bank Slaski S.A.
with a significant amount of Polish zloty-denominated assets and liabilities including derivatives that are
continuously rebalanced to hedge the risk exposures.
The tables below summarise the approximate gross exposures of ING that have yet to transition related to
USD LIBOR and WIBOR. For WIBOR, as of 31 December 2023, they exclude exposures expiring before the
transition date 31 December 2027 and of 31 December 2022 they exclude exposures expiring before the
previously expected transition date 1 January 2025. Therefore, WIBOR exposures are not directly
comparable between 31 December 2023 and 31 December 2022 as a consequence of the recent
developments in the Polish National Working Group.
Non-derivative financial instruments to transition to alternative benchmarks (*)
in \u20ac million at 31 December 2023
Financial assets non-
derivative
Financial liabilities\u00a0
non-derivative
Off balance sheet
commitments
Carrying value
Carrying value
Nominal value
By benchmark rate
USD LIBOR
915
16
9
WIBOR
18,064
1,021
Total
18,979
16
1,030
Non-derivative financial instruments to transition to alternative benchmarks (*)
in \u20ac million at 31 December 2022
Financial assets non-
derivative
Financial liabilities\u00a0
non-derivative
Off balance sheet
commitments
Carrying value
Carrying value
Nominal value
By benchmark rate
USD LIBOR
30,040
1,637
7,644
WIBOR
22,154
1,411
Total
52,194
1,637
9,055
The total of non-derivative financial assets linked to USD LIBOR is reduced from \u20ac30,040\u00a0million on 31
December 2022 to \u20ac915\u00a0million on 31 December 2023. The majority of the non-derivative financial assets
exposure on 31 December 2023 are related to contracts using synthetic USD LIBOR up until the transition to
SOFR is complete during 2024. In addition, ING reduced its committed undrawn credit facilities linked to USD
LIBOR from \u20ac7,644\u00a0million on 31 December 2022 to \u20ac9\u00a0million on 31 December 2023. The total of non-
derivative financial liabilities linked to USD LIBOR is reduced from \u20ac1,637\u00a0million on 31 December 2022 to
\u20ac16\u00a0million on 31 December 2023. The remaining non-derivative financial instruments linked to USD LIBOR
are expected to transition before the next interest rate reset date. Therefore, the remaining exposure to USD
LIBOR is expected to reduce further during the first half of 2024.
Derivative financial instruments to transition to alternative benchmarks (*)
31 December 2023
31 December 2022
in \u20ac million
Nominal value
Nominal value
By benchmark rate1
USD LIBOR
151
495,318
WIBOR
77,238
136,318
Total
77,388
631,636
1 For cross-currency swaps all legs of the swap are included that are linked to a main IBOR that is significant to ING.
In addition to the amounts in the table above, ING transitioned the interest rate swaptions that referred to
the USD LIBOR ICE swap rate (nominal value on 31 December 2022: \u20ac10,810\u00a0million). The transition of these
contracts was in general governed by a specific ISDA protocol.
Derivative financial instruments linked to USD LIBOR were reduced from \u20ac495,318\u00a0million on 31 December
2022 to only \u20ac151\u00a0million on 31 December 2023. The majority of derivatives linked to USD LIBOR rates were
transacted with clearing houses and transitioned through a standardised exercise during the second quarter
of 2023. For non-centrally cleared derivatives, the main transition occurred using the ISDA IBOR fallback
arrangements. The majority of the remaining derivative financial instruments linked to USD LIBOR are
related to contracts using synthetic USD LIBOR and linked to non-derivative financial assets that are
expected to transition before the next interest rate reset date during 2024. Therefore, a steady reduction of
these last few USD LIBOR contracts is expected during the first half of 2024.
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project:
\u2022 Phase 1 addresses those issues that affect financial reporting before the replacement of an existing
benchmark. This allows ING to apply a set of temporary exceptions to continue hedge accounting even
when there is uncertainty about contractual cash flows arising from the reform. Under these temporary
exceptions, interbank offered rates are assumed to continue unaltered for the purposes of hedge
accounting until such time as the uncertainty is resolved.
\u2022 Phase 2 focuses on issues that may affect financial reporting when the existing benchmark rate is
reformed or replaced. Phase 2 amendments to IFRS relate mainly to accounting for changes in the basis for
determining the contractual cash flows of financial assets and liabilities due to the IBOR reform and impact
on hedge accounting when an existing benchmark rate is reformed or replaced with an alternative risk-free
rate.
Specifically, Phase 2 amendments require that the effective interest rate on debt financial instruments is
adjusted, and hedge accounting continues on transition to risk free rates, but only to the extent that the
modifications made to financial instruments are those necessary to implement the IBOR reform and that
the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. By applying these
mandatory amendments, ING Group avoids recognising modification gains and losses on debt instruments
that would otherwise be required in the absence of Phase 2 amendments (changes to debt instruments
resulting from IBOR reform are treated as a reset to the instrument\u2019s variable interest rate). In addition, ING
Group avoids hedge accounting discontinuations when modifying both hedged items and hedging
instruments (and related hedge documentation) as a consequence of IBOR reform that would otherwise be
required in the absence of Phase 2 amendments.\u00a0
As explained above, Phase 1 and Phase 2 IBOR amendments to IFRS, amongst other changes, provide
specific hedge accounting reliefs that allow hedge accounting relationships to continue when IBOR Reform is
ongoing. Phase 1 reliefs cease to apply when uncertainty arising from IBOR reform is no longer present with
respect to the timing and amount of the IBOR-based cash flows of the relevant instruments. It is ING Group\u2019s
policy to cease to apply Phase 1 reliefs when the applicable contract (either hedging instrument or hedged
item) is actually modified. As a result, for these hedge accounting relationships the applicable Phase 1 reliefs
ceased to apply and Phase 2 became applicable. Refer to section 1.5.4 of Note 1 \u2018Basis of preparation and
material accounting policy information\u2019 for more information on the Phase 1 and Phase 2 amendments.
Furthermore, hedging relationships are being amended to incorporate the new benchmark rates. During
2023, ING focused on USD LIBOR contracts and all hedging relationships have been amended to incorporate
the new benchmark rates and do no longer reference USD LIBOR rates.
On 31 December 2023, Phase 1 reliefs are applicable to WIBOR indexed fair value and cash flow hedge
accounting relationships as there is uncertainty arising from the WIBOR reform with respect to the timing
and the amount of the underlying cash flows that the Group is exposed to. Therefore, for WIBOR financial
instruments designated in hedge accounting the applicable Phase 1 reliefs will continue to apply until the
relevant contract is modified. At that point in time, Phase 2 reliefs will become applicable. For these affected
fair value and cash flow hedge relationships ING assumes that the WIBOR based cash flows from the
hedging instrument and hedged item will remain unaffected.
The same assumption is used to assess the likelihood of occurrence of the forecast transactions that are
subject to cash flow hedges. The hedged cash flows in cash flow hedges directly impacted by the WIBOR
reform still meet the highly probable requirement, assuming the WIBOR benchmark on which the hedged
cash flows are based is not altered as a result of the reform.
The total gross notional amounts of hedging instruments that are used in the ING's hedge accounting
relationships for which the Phase 1 amendments to IAS39 were applied are:
Notional amounts of Hedging instruments (*)
31 December 2023
31 December 2022
in \u20ac million
Nominal value
Nominal value
By benchmark rate
USD LIBOR
28,316
WIBOR
89,338
57,774
As at 31 December 2023, all USD LIBOR hedging relationships have been amended to incorporate the new
benchmark rates and do no longer reference USD LIBOR rates. At 31 December 2022 approximately 89% of
the notional amounts for USD LIBOR had a maturity date beyond the transition date 30 June 2023.
Approximately 29% of the notional amounts for WIBOR have a maturity date beyond the new transition
date 31 December 2027. At 31 December 2022, approximately 71% of the notional amounts for WIBOR had
a maturity date beyond the previously expected transition date of 1 January 2025. The WIBOR amounts are
not directly comparable between 31 December 2023 and 31 December 2022 as a consequence of the
recent postponement of the cessation of WIBOR by the Polish National Working Group.
The notional amounts of the derivative hedging instruments provide a close approximation of the extent of
the risk exposure ING manages through these hedging relationships.
Credit spread risk in banking books (*)
Credit spread risk is defined as risk driven by the changes of the market price for credit risk, for liquidity and
potentially other characteristics of credit-risky instruments, which is not captured by another existing
prudential framework such as IRRBB or by expected credit/(jump-to-) default risk.
Foreign exchange (FX) risk in banking books (*)
FX exposures in banking books result from core banking business activities (business units doing business in
currencies other than their base currency), foreign currency investments in subsidiaries (including realised
net profit and loss), and strategic equity stakes in foreign currencies. The policy regarding these exposures is
briefly explained below.
Governance \u2013 Core banking business (*)
Every business unit hedges the FX risk resulting from core banking business activities into its base currency
to prevent volatility in profit and loss. Consequently, assets and liabilities are matched in terms of currency,
within certain friction limits.
Governance \u2013 FX translation result (*)
ING\u2019s strategy is to protect the CET1 ratio against adverse impact from FX rate fluctuations, while limiting
the volatility in the profit and loss account due to this CET1 hedging and limiting the RWA impact under the
regulatory framework. Hedge accounting is applied to the largest extent possible. Taking this into account,
the CET1 ratio hedge can be achieved by deliberately taking foreign currency positions equal to certain
target positions, such that the CET1 capital and risk-weighted assets are equally sensitive in relative terms
to changing FX rates.
Risk profile \u2013 FX translation result (*)
The following table presents the currency exposures in the banking books for the most important currencies
for the FX translation result. Positive figures indicate long positions in the respective currency. As a result of
the strategy to hedge the CET1 ratio an open structural FX exposure exists.
To measure the volatility of the CET1 ratio from FX rate fluctuations, different metrics are used including the
CET1 Ratio-at-Risk. The impact is controlled via the Solvency and Market Risk Banking Book RAS.
Foreign currency exposures banking books (*)
in \u20ac million
Foreign Investments
Hedges
Net exposures
2023
2022
2023
2022
2023
2022
US Dollar
10,337
10,470
-3,416
-2,376
6,921
8,093
Pound Sterling
1,659
1,364
-156
-58
1,503
1,306
Polish Zloty
3,976
2,714
-1,254
-321
2,722
2,393
Australian Dollar
3,620
3,781
-2,273
-2,673
1,346
1,108
Turkish Lira
517
750
0
0
517
750
Chinese Yuan
1,815
1,871
-348
0
1,466
1,871
Russian Rouble
375
391
0
0
375
392
Romanian Leu
895
860
-134
-154
761
706
Thai Baht
1,128
1,109
-697
-699
431
410
Other currency
3,704
3,771
-2,897
-2,908
806
863
Total
28,024
27,081
-11,175
-9,189
16,849
17,892
*The FX sensitivity is expressed as the FX spot equivalent position.
Equity price risk in banking books (*)
Governance (*)
ING maintains a portfolio with substantial equity exposure in its banking books. Local offices are responsible
for the management of the equity investment positions. Financial Risk is responsible for monitoring the
regulatory capital for equity investments on a monthly basis and acts independently from ING/local
management when monitoring these positions.
Risk profile (*)
Equity price risk arises from the possibility that an equity security\u2019s price will fluctuate, affecting the values
of the equity security itself as well as other instruments whose values react similarly to the particular
security, a defined basket of securities, or a securities index. ING\u2019s equity exposure mainly consists of the
investments in associates and joint ventures of \u20ac1,509 million (2022: \u20ac1,500 million) and equity securities
held at fair value through other comprehensive income (FVOCI) of \u20ac1,885 million (2022: \u20ac1,887 million). The
value of equity securities held at FVOCI is directly linked to equity security prices with increases/decreases
being recognised in the revaluation reserve. Investments in associates and joint ventures are measured in
accordance with the equity method of accounting and the balance sheet value is therefore not directly
linked to equity security prices. The equity sensitivity is expressed as the equity position.
Year-on-year variance analysis (*)
In 2023, the revaluation reserve equity securities decreased by \u20ac34 million from \u20ac1,187 million to \u20ac1,152
million mainly due to revaluation of the shares in Bank of Beijing with \u20ac -24 million. In 2023, the equity
securities at fair value through OCI decreased slightly by \u20ac2 million.
Revaluation reserve equity securities at fair value through other comprehensive income (*)
in \u20ac million
2023
2022
Positive re-measurement
1,158
1,190
Negative re-measurement
-6
-4
Total
1,152
1,187
Market risk in trading books (*)
Within the trading portfolios, the positions are maintained in the financial markets. These positions are often
a result of transactions with clients and may benefit from short-term price movements. In 2023, ING
continued its strategy of undertaking trading activities to develop its client-driven franchise and deliver a
differentiating experience by offering multiple market and trading products.
Governance (*)
The Financial Markets Risk Committee (FMRC) is the market risk committee that, within the risk appetite set
by the ALCO Bank, sets the market risk limits both on an aggregated level and on a desk level. The FMRC has
delegated authority from ALCO Bank for the management of market risk related to all trading and banking
book activities within Financial Markets (FM). Financial Risk/ Trading Risk Management (FR/ TRM) advises both
FMRC and ALCO Bank on the market risk appetite of the trading activities.
With respect to the trading portfolios, TRM focuses on the management of market risks of Wholesale
Banking (mainly Financial Markets) as this is the only business line within ING where trading activities take
place. Trading activities include facilitation of client business and market making. TRM is responsible for the
development and implementation of trading risk policies and risk measurement methodologies, and for
reporting and monitoring risk exposures against approved trading limits. TRM also reviews trading mandates
and global limits, and performs the gatekeeper role in the product review process (PARP).
Risk measurement (*)
ING uses a comprehensive set of methodologies and techniques to measure market risk in trading books:
Value at Risk (VaR) and Stressed Value at Risk (SVaR), Incremental Risk Charge (IRC), and stress testing.
Systematic validation processes are in place to validate the accuracy and internal consistency of data and
parameters used for the internal models and modelling processes.
Value at Risk (*)
TRM uses the historical simulation VaR methodology (HVaR) as its primary risk measure. The HVaR for
market risk quantifies, with a one-sided confidence level of 99 percent, the maximum overnight loss that
could occur in the trading portfolio of ING due to changes in risk factors (e.g. interest rates, equity prices,
foreign exchange rates, credit spreads, implied volatilities) considering the positions remains unchanged for
a time period of one day.
Next to general market movements in these risk factors, HVaR also takes into account market data
movements for specific moves in, for example, the underlying issuer or securities. A single model which
diversifies general and specific risk is used. In general, a full revaluation approach is applied, while for a
limited number of linear trading positions and risk factors in commodity and equity risk classes a sensitivity-
based approach is applied. The potential impact of historical market movements on today\u2019s portfolio is
estimated, based on equally weighted observed market movements of the previous year (260 business
days). When simulating potential movements in risk factors, depending on the risk factor type, either an
absolute or a relative shift is used.
The data used in the computations is updated daily. ING uses HVaR with a one-day horizon for internal risk
measurement, management control, and backtesting, and HVaR with a 10-day horizon for determining
regulatory capital. To compute HVaR with a 10-day horizon, the one-day risk factor shifts are scaled by the
square root of 10 and then used as an input for the revaluation. The same model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Limitations (*)
HVaR has some limitations: HVaR uses historical data to forecast future price behaviour, but future price
behaviour could differ substantially from past behaviour. Moreover, the use of a one-day holding period (or
10 days for regulatory capital calculations) assumes that all positions in the portfolio can be liquidated or
hedged in one day. In periods of illiquidity or market events, this assumption may not hold. Also, the use of
a 99 percent confidence level means that HVaR does not take into account any losses that occur beyond
this confidence level.
Backtesting (*)
Backtesting is a technique for the ongoing monitoring of the plausibility of the HVaR model in use. Although
HVaR models estimate potential future trading results, estimates are based on historical market data. In a
backtest, the actual daily trading result (excluding fees and commissions) is compared with the one-day
HVaR.
In addition to using actual results for backtesting, ING also uses hypothetical results, which exclude the
effects of intraday trading, fees, and commissions. When an actual or a hypothetical loss exceeds the HVaR,
an \u2018outlier\u2019 occurs. Based on ING\u2019s one-sided confidence level of 99 percent, an outlier is expected once in
every 100 business days.
On an overall level in 2023, there was one outlier for hypothetical P&L and zero outliers for actual P&L. The
hypothetical outliers occurred during the past year concentrated in the first quarter of 2023, mainly due to
the increased market volatility arising from major American banks being collapsed.
Stressed HVaR (*)
The stressed HVaR (SVaR) is intended to replicate the HVaR calculation that would be generated on the
bank\u2019s current portfolio with inputs calibrated to the historical data from a continuous 12-month period of
significant financial stress relevant to the bank\u2019s portfolio.
To calculate SVaR, ING uses the same model that is used for 1DHVaR, with a 10-day horizon. The data for
the historical stress period used currently includes the height of the credit crisis around the fall of Lehman
Brothers (2008-2009), and this choice is reviewed regularly. The historical data period is chosen so that it
gives the worst scenario loss estimates for the current portfolio. The same SVaR model is used for
management purposes and for regulatory purposes. The same SVaR model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Incremental risk charge (*)
The incremental risk charge (IRC) for ING is an estimate of the default and migration risks for credit products
(excluding securitisations) in the trading book, over a one-year capital horizon, with a 99.9% confidence
level. Trading positions (excluding securitisations) of ING, which are subject to specific interest rate risk
included in the internal model approach for market risk regulatory capital, are in scope of the IRC model. By
model choice, equity is excluded from the model. For the calculation of IRC, ING performs a Monte Carlo
simulation based on a multi-factor t-copula. In the multi-factor IRC model the supervisory asset correlations
are no longer applicable and the calibration of the correlations is based on historical market data. The rating
change is simulated for all issuers over the different liquidity horizons (i.e. time required to liquidate the
position or hedge all significant risks) within one year. Movements across different rating categories and
probabilities of default are governed by a credit-rating transition matrix. An internal transition matrix along
with internal LGDs is used, to comply with the consistency requirement. The financial impact is then
determined for the simulated migration to default, or for the simulated migration to a different rating
category, based on LGD or credit spread changes, respectively.
The liquidity horizon has been set to the regulatory minimum of three months for all positions in scope. ING
reviews the liquidity horizons on a yearly basis, based on a structured assessment of the time it takes to
liquidate the positions in the trading portfolio.
Stress testing and event risk (*)
Stress testing is a valuable risk management tool. In addition to the bank-wide stress test framework as
described in the stress-testing section, Trading Risk Management performs stress tests specific to the
trading book with various frequencies. ING went live with a new Trading Book Stress Testing model in 2023,
replacing the previously used Event Risk model. With the new model, the trading book stress tests evaluate
the impact on the bank\u2019s trading book under severe but plausible stress scenarios, using full revaluation
approach. The framework is based on historical as well as hypothetical scenarios. The stress result is an
estimate of the profit and loss caused by a potential event and its worldwide impact for ING. The results of
the stress tests are used for decision-making aimed at maintaining a financially healthy going-concern
institution after a severe event occurs.
In stress scenarios, shocks are applied to prices (credit spreads, interest rates, equity, commodities, and FX
rates) and volatilities. Depending on the type of the stress test, additional scenario assumptions can be
made, for example on correlations, dividends, or recovery rates. The structural scenarios are defined to
cover market moves in various directions and capture different asset class correlations. Scenarios are
calculated using full revaluation approach. The worst scenarios are determined for each product line,
business line and super business line, and compared against limits.
Sensitivities (*)
As part of the risk monitoring framework, TRM actively monitors the sensitivities of the trading portfolios.
Sensitivities measure the impact of movements in individual market risk factors (foreign exchange rates,
interest rates, credit spreads, equity and commodity prices) on profit and loss results of the trading
positions and portfolios.
The following tables show the five largest trading positions in terms of sensitivities to foreign exchange,
interest rate and credit spread risk factor movements. These largest exposures also reflect concentrations of
risk in FX risk per currency, interest rate risk per currency, and credit spread risk per country, rating and
sector. Due to the nature of the trading portfolios, positions in the portfolios can change significantly from
day to day, and sensitivities of the portfolios can change daily accordingly.
Most important foreign exchange year-end trading positions (*)
in \u20ac million
2023
2022
Foreign exchange
Foreign exchange
Japanese Yen
61
US Dollar
-187
Taiwan Dollar
-58
Romanian Leu
88
Romanian Leu
58
Japanese Yen
86
Chinese Yuan
49
Chinese Yuan
32
Hong Kong Dollar
-38
South Korean Won
28
Most important interest rate and credit spread sensitivities at year-end (*)
in \u20ac thousand
2023
2022
Interest rate (BPV) 1
Interest rate (BPV) 1
Euro
-309
Euro
-334
Czech koruna
71
British Pound
-95
Korean Won
-41
US Dollar
-79
US Dollar
-40
Taiwan Dollar
67
British Pound
-35
Japanese Yen
63
Credit spread (CSO1) 2
Credit spread (CSO1) 2
Germany
405
Netherlands
162
Netherlands
120
United States
151
Korea
-111
Japan
102
Japan
106
France
88
United Kingdom
101
Germany
87
1 Basis point value (BPV) measures the impact on value of a one basis point increase in interest rates.
2 Credit spread sensitivity (CS01) measures the impact on value of a one basis point increase in credit spreads. Exposures to
supranational institutions are not assigned to a specific country.
Credit spread sensitivities per risk class and sector at year-end (*)
2023
2022
in \u20ac thousand
Corporate
Financial
institutions
Corporate
Financial
institutions
Credit spread (CSO1) 1
Risk classes
1 (AAA)
2
-1
2\u20134 (AA)
12
50
-1
-7
5\u20137 (A)
57
50
154
-13
8\u201310 (BBB)
106
13
249
-11
11\u201313 (BB)
25
-25
7
7
14\u201316 (B)
17
-4
23
-4
17\u201322 (CCC and NPL)
-8
-20
3
-7
Not rated
Total
208
65
437
-36
1 Credit spread sensitivity (CS01) measures the impact on value of a one basis point increase in credit spreads.
Funding and liquidity risk (*)
Introduction (*)
Funding and liquidity (F&L) risk is the risk that ING or one of its subsidiaries cannot meet their financial
liabilities upon their maturity date at a reasonable cost and in a timely manner. ING incorporates funding
and liquidity risk management in its business strategy, and has established a funding and liquidity risk
framework to manage these risks within predefined boundaries.
A high-level overview of the F&L framework is provided in the next figure.
Governance (*)
Funding and liquidity risk management within ING falls under the supervision of the ALCO Bank function,
which approves the funding and liquidity risk appetite and subsequently cascades it throughout the
organisation. ALCO Bank has delegated the responsibilities of the Internal Capital and Liquidity Adequacy
Assessment Process (ICLAAP) and documents, as per the ICLAAP framework of ING, to the ICLAAP
Committee. The ICLAAP Committee therefore focuses on technical liquidity documents and oversees
business processes and deliverables concerning the Internal Liquidity Adequacy Assessment Process
(ILAAP). The EB, MBB, and staff departments from the CRO and CFO domains, as well as Group Treasury,
have oversight of, and are responsible for, managing funding and liquidity risks.
ING\u2019s funding and liquidity risk governance is based on the three-lines-of-defence structure. This sets a clear
division of responsibilities as well as an independent risk control challenge process. Group Treasury and the
business lines have the first-line-of-defence functions, which include management of ING\u2019s (regulatory)
liquidity and funding position, maintaining access to the professional funding markets, and managing the
liquidity buffer. Financial Risk, as the second line of defence, is responsible for developing and maintaining
ING\u2019s policies, standards and guidelines on F&L risk management, as well as for setting the F&L risk appetite
through stress testing and other risk measurement activities. The Finance function is responsible for
management information and regulatory reporting related to funding and liquidity risk management. As
the third line of defence, Corporate Audit Services is responsible for independently assessing the design,
effectiveness, and implementation of the Funding & Liquidity framework.
Funding and liquidity management strategy and objectives (*)
The main objective of ING\u2019s funding and liquidity risk management is to maintain sufficient liquidity to fund
the commercial activities of ING, both under normal and stressed market circumstances across various
locations, currencies, and tenors.
ING\u2019s funding consists mainly of retail and corporate deposits contributing around 50 percent and 25
percent of total funding, respectively. These funding sources provide a relatively stable funding base. The
remainder of the required funding is attracted primarily through a combination of long-term and short-term
professional funding. Group Treasury manages the professional funding in line with the F&L risk appetite,
with the aim of ensuring a sufficiently diversified and stable funding base.
Funding and liquidity adequacy and risk appetite (*)
ING identifies key drivers of short-term and future liquidity and funding needs on an ongoing basis through
the periodic risk identification process. Taking into consideration the identified risk drivers, ING regularly
assesses its current and future liquidity adequacy and, if deemed necessary, takes action to further improve
ING\u2019s liquidity position and maintain sufficient counterbalancing capacity. A liquidity adequacy statement is
formulated on a quarterly basis to substantiate and reflect the management view on the current funding
and liquidity position as well as the potential future challenges. The quarterly liquidity adequacy statement
is an important part of ING\u2019s ILAAP process.
Additionally, ING completes ad-hoc funding and liquidity assessments if deemed necessary. Following the
banking turmoil in March 2023, ING completed a lessons-learned deep-dive. This deep-dive included peer
and internal analysis of deposit structures and liquidity buffers, and a review of the influence of mobile
banking apps and social media on financial institutions. The F&L risk appetite subsequently incorporated
elements of this analysis, as well as the impacts of quantitative tightening, TLTRO III redemptions, increased
competition for savings in the higher-interest-rate-environment and potentially higher deposit outflows in
certain countries, in the 2023 review.
ING assesses its F&L adequacy through three lenses \u2013 stress, economic and normative:
\u2022 Through the stress lens, ING evaluates its ability to withstand periods of prolonged F&L stress for both
normative and economic requirements or limits under idiosyncratic, market-related, a combination of
idiosyncratic and market-related and climate risk scenarios, which lead to customer deposit outflows,
deterioration of access to funding markets, and lower liquidity value of counterbalancing capacity.
\u2022 Through the economic lens, ING assesses the extent to which its customers, professional counterparties
and investors are comfortable to provide deposits and funding in the tenors, currencies, and instruments
necessary to sustainably fund the business (intraday, short-term and long-term) in a going-concern
situation.
\u2022 Through the normative lens, ING ascertains that the bank is in the position to meet current and future
home and host regulatory requirements.
For each lens, ING has established a related set of risk appetite statements, which define ING\u2019s risk appetite
commensurate with the principles of liquidity adequacy. These risk appetite statements are summarised in
the following illustration:
The F&L risk appetite statements are translated into a number of metrics with appropriate boundaries and
instruments, which are used to regularly measure and manage ING\u2019s funding and liquidity risk. The risk
appetite with respect to the stress lens aims to have sufficient counterbalancing capacity under various
internally defined stress scenarios. Regarding the economic perspective, an internally defined stable funding
to loans (SFtL) ratio and stable funding surplus metric (supplemented by other metrics) is used to stimulate
a diversified funding base and to prevent overreliance on professional funding. Finally, the liquidity coverage
ratio (LCR) and the net stable funding ratio (NSFR) regulatory metrics are monitored in terms of both ING\u2019s
risk appetite and normative requirements.
The macroeconomic and market environment are also important considerations in ING\u2019s funding and
liquidity framework. The macroeconomic environment comprises various exogenous factors over which ING
has no control, but which may have a material impact on ING\u2019s F&L position. The main macroeconomic
factors analysed on a regular basis include:
\u2022 Performance of global and local economic performance e.g. shifts in GDP, inflation rates, unemployment
rates, and public deficit/surplus;
\u2022 Developments and risks arising from geopolitical tensions and related trends;
\u2022 Monetary policy with a focus on the alternative monetary measures employed by central banks in
recent years as a result of the global energy crisis and the recent period of high inflation;
\u2022 Regulatory requirements; e.g. understanding the changing regulatory landscape as well as the impact of
ING\u2019s actions on existing regulatory boundaries.
The strategic ambitions of ING, together with the design and execution of the funding plan, are assessed
under both current and projected market conditions. An emphasis is placed on understanding overall
market trends and developments, credit rating changes, and peer comparisons.
Liquidity stress-testing (*)
Funding and liquidity stress-testing forms part of the overall F&L framework. It allows ING to examine the
effects of exceptional but plausible future events on ING\u2019s funding and liquidity position. It also provides
insight into which entities, business lines or portfolios are vulnerable to which types of risk drivers or
scenarios.
The stress-testing framework encompasses the funding and liquidity risks of the consolidated balance sheet
of ING Group, including all entities, business lines as well as on-, and off-balance-sheet positions. The net
liquidity position (NLP) is the main stress-testing measure and is measured at different time buckets.
The stress-testing framework considers idiosyncratic, market-wide, combined (idiosyncratic and market-
wide), and climate and environmental stress scenarios. The design of the framework is based on empirical
evidence supplemented by expert judgement. The framework can be extended to additional ad-hoc
scenarios. For example, it can be used as input for firm-wide stress testing and reverse stress testing.
Outcomes of the stress tests are considered in the key aspects of ING\u2019s F&L risk framework and F&L risk
management, including:
\u2022 Risk Appetite Framework (through risk appetite statements);
\u2022 Risk identification and assessment;
\u2022 Monitoring of the liquidity and funding position;
\u2022 Business actions (if needed);
\u2022 Contingency funding plan;
\u2022 Early-warning indicators.
The funding and liquidity stress-testing framework is also subject to regular internal validation by model
validation.
In line with supervisory expectations, ING\u2019s liquidity position is stress tested on at least a monthly basis
using scenarios that form part of the F&L risk appetite statement. The results of all internal stress scenarios
are monitored and assessed on a regular basis. In addition, ad-hoc scenarios based on current economic
and market developments are run to determine their potential impacts on the funding and liquidity position
of ING. In 2023, this included stress test scenarios dedicated to the impact of rapid deposit outflows on the
bank, as well as a shutdown of short and long-term funding markets. The internal stress scenarios also serve
as input in the decision on additional contingency measures.
Contingent F&L risks are addressed in the contingency capital and funding plan with a focus on early-
warning indicators as well as organisation and planning of liquidity management in times of stress. The
contingency funding measures are developed in conjunction with the ING recovery plan and are reviewed
and tested on a regular basis.
1.2.1\u00a0 Presentation of Risk management disclosures
To improve transparency, reduce duplication and present related information in one place, certain
disclosures of the nature and extent of risks related to financial instruments required by IFRS 7 \u2018Financial
instruments: Disclosures\u2019 are included in the \u2018Risk management\u2019 section of the Annual Report.
These disclosures are an integral part of ING Group Consolidated financial statements and are indicated in
the \u2018Risk management\u2019 section by the symbol (*). Chapters, paragraphs, graphs or tables within the 'Risk
management' section that are indicated with this symbol in the respective headings or table header are
considered to be an integral part of the Consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-2": { "value": "
Basis of disclosures (*)
The risk management section contains information relating to the nature and extent of the risks of
financial instruments as required by International Financial Reporting Standards (IFRS) 7 'Financial
Instruments: Disclosures'. These disclosures are an integral part of ING Group Consolidated financial
statements and are indicated by the symbol (*). 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 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. Disclosures in accordance with Part Eight of the
CRR2 and CRD V, and as required by the supervisory authority, are published in our \u2018Additional Pillar III
Report\u2019, which can be found on our corporate website ing.com.
1.2\u00a0 Basis of preparation of the Consolidated financial statements
The ING Group Consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the relevant articles of Part
9 of Book 2 of the Dutch Civil Code.
IFRS as adopted by the EU are IFRS Standards and IFRS Interpretations as issued by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) with some limited
modifications such as the temporary \u2018carve-out\u2019 from IAS 39 \u2018Financial Instruments: Recognition and
Measurement\u2019 (herein, referred to as IFRS).
Under the EU carve-out, ING Group applies fair value hedge accounting to portfolio hedges of interest rate
risk (macro hedging). For further information, reference is made to paragraph 1.5.4 \u2018Derivatives and hedge
accounting\u2019 of this note and to Note 36\u00a0 Derivatives and hedge accounting.
The ING Group Consolidated financial statements have been prepared on a going concern basis and there
are no significant doubts about the ability of ING Group to continue as a going concern.
The Consolidated financial statements are presented in euros and rounded to the nearest million, unless
stated otherwise. Amounts may not add up due to rounding.
1.2.1\u00a0 Presentation of Risk management disclosures
To improve transparency, reduce duplication and present related information in one place, certain
disclosures of the nature and extent of risks related to financial instruments required by IFRS 7 \u2018Financial
instruments: Disclosures\u2019 are included in the \u2018Risk management\u2019 section of the Annual Report.
These disclosures are an integral part of ING Group Consolidated financial statements and are indicated in
the \u2018Risk management\u2019 section by the symbol (*). Chapters, paragraphs, graphs or tables within the 'Risk
management' section that are indicated with this symbol in the respective headings or table header are
considered to be an integral part of the Consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-3": { "value": "
Credit risk
Governance (*)
ING\u2019s credit risk strategy is to maintain an internationally diversified loan and bond portfolio, while avoiding
large risk concentrations. The emphasis is on managing business developments within the defined credit
and concentration risk appetite. The aim is to support relationship banking activities, while maintaining
internal risk/reward guidelines and controls.
The Credit Risk department is responsible for setting the credit risk strategy for ING and aims to ensure
credit risk and credit restructuring are managed from an overarching point of view rather than per business
line. Furthermore, the Credit Risk Control Unit is responsible for the oversight and control of rating systems.
While the Credit Risk department has oversight of the Group credit risk strategy and risk appetite across
Retail Banking risk and Wholesale Banking risk, the head of Retail/Rest of World (RoW) Risk and head of
Wholesale Banking Risk aim to ensure the management of the risk within these business lines. Also refer to
the Risk governance and organisational structure in the introductory section of 'Risk management'.
The Credit Risk function encompasses the following activities:
\u2022 Providing consistent credit risk policies, systems and tools to manage the credit lifecycle of all activities;
\u2022 Measuring, monitoring and managing credit risks in the bank\u2019s portfolio, including evaluation of scenario
and stress test results;
\u2022 Challenging and approving new and modified transactions and borrower reviews, including involvement
in the process of assigning risk ratings to indicate a clients's creditworthiness;
\u2022 Managing the levels of provisioning and risk costs, and advising on impairments.
Credit risk categories (*)
In the following table the different types of credit risk categories are described and a reconciliation with the
notes in the financial statements is also included:
Reconciliation between credit risk categories and financial position (*)
Credit risk categories
Notes in the financial statements
Lending risk: is the risk that the client (counterparty, corporate or
individual) does not pay the principal interest or fees on a loan
when they are due, or on demand for letters of credit (LCs) and
guarantees provided by ING.
Note
2
Cash and balances with central banks
Note
3
Loans and advances to banks
Note
4
Financial assets at fair value through
profit or loss
Note
5
Financial assets at fair value through
other comprehensive income
Note
7
Loans and advances to customers
Note
41
Contingent liabilities and commitments
Investment risk: is the credit default and risk rating migration risk
that is associated with ING\u2019s investments in bonds, commercial
paper, equities, securitisations and other similar publicly traded
securities. This can be viewed as the potential loss that ING may
incur from holding a position in underlying securities whose
issuer's credit quality deteriorates or defaults.
Note
4
Financial assets at fair value through
profit or loss
Note
5
Financial assets at fair value through
other comprehensive income
Note
6
Debt securities
Money market risk: arises when ING places short-term deposits
with a counterparty in order to manage excess liquidity. In the
event of a counterparty default, ING may lose the deposit placed.
Note
2
Cash and balances with central banks
Note
3
Loans and advances to banks
Note
7
Loans and advances to customers
Pre-settlement risk: arises when a client defaults on a transaction
before settlement and ING must replace the contract by a trade
with another counterparty at the then prevailing (possibly
unfavourable) market price. This credit risk category is associated
with derivatives transactions (exchange-traded derivatives, over-
the-counter (OTC) derivatives and securities financing
transactions).
Note
4
Financial assets at fair value through
profit or loss
Note
14
Financial liabilities at fair value through
profit or loss
Note
40
Offsetting financial assets and liabilities
Settlement risk: arises when there is an exchange of value (funds
or instruments) and receipt from its counterparty is not verified
or expected until after ING has given irrevocable instructions to
pay or has paid or delivered its side of the trade. The risk is that
ING delivers but does not receive delivery from its counterparty.
Note
4
Financial assets at fair value through
profit or loss
Note
11
Other assets
Note
14
Financial liabilities at fair value through
profit or loss
Note
16
Other liabilities
Credit risk appetite and concentration risk framework (*)
The credit risk appetite and concentration risk framework is designed to prevent undesired high levels of
credit risk and credit concentrations within various levels of the ING portfolio. It is derived from the concepts
of boundaries and instruments as described in the ING Risk Appetite Framework (RAF).
Credit risk appetite is the maximum level of credit risk ING is willing to accept for growth and value creation.
The credit risk appetite is linked to the overall bank-wide RAF. The credit risk appetite is expressed in
quantitative and qualitative measures. Having a credit risk appetite provides:
\u2022 Clarity about the credit risks that ING is prepared to assume, target setting and prudent risk
management. Credit risk appetite is used as an input for Lending guidances which are made by sector
and/or location;
\u2022 Consistent communication to different stakeholders;
\u2022 Guidelines on how to align reporting and monitoring tools with the organisational structure and strategy;
\u2022 Alignment of business strategies and key performance indicators of business units with ING\u2019s credit risk
appetite through dynamic planning.
The credit risk appetite is set at different levels and dimensions within ING. The credit risk appetite
framework specifies the scope and focus of the credit risk which ING takes and the composition of the credit
portfolio, including its concentration and diversification objectives in relation to business lines, locations,
sectors and products. The credit risk appetite framework has also been extended to embed climate risk
elements. The first steps towards introducing climate risk elements in the credit risk appetite framework
were taken in 2022 and these have further evolved and matured in 2023. The climate risk elements within
the credit risk appetite framework allow for more efficient steering of sector concentrations from a climate
risk perspective.
The credit concentration risk framework is composed of:
\u2022 Country risk concentration: Country risk is the risk that arises due to events in a specific country (or group
of countries). To manage the maximum country loss ING is willing to accept, boundaries are approved by
the SB. The estimated level is correlated to the risk rating assigned to a given country. Actual country
limits are set by means of country instruments, which are monitored monthly and updated, when
needed. For countries with elevated levels of geopolitical or severe economic cycle risk, monitoring is
performed on a more frequent basis with strict pipeline and exposure management.
\u2022 Single name and secondary risk concentration: ING has an established credit concentration risk
framework to identify, measure and monitor single name concentration including secondary risk. The
same concept of boundaries and instruments is applicable.
\u2022 Sector and product concentration risk are managed via the credit risk appetite framework.
Credit risk models (*)
Within ING, internal CRR-compliant models are used to determine probability of default (PD), exposure at
default (EAD) and loss given default (LGD) for regulatory and economic capital purposes. These models also
form the basis of ING\u2019s IFRS 9 loan loss provisioning (see \u2018IFRS 9 models\u2019 below). Bank-wide, ING has
implemented approximately 100 credit risk models, for regulatory capital, economic capital and loan loss
provisioning purposes.
There are two main types of PD, EAD and LGD models used throughout the bank:
\u2022 Statistical models are created where a large set of default or detailed loss data is available. They are
characterised by sufficient data points to facilitate meaningful statistical estimation of the model
parameters. The model parameters are estimated with statistical techniques based on the data set
available.
\u2022 Hybrid models are statistical models supplemented with knowledge and experience of experts from risk
management and front-office staff, literature from rating agencies, supervisors and academics. These
models are only used for \u2018low default portfolios\u2019, where limited historical defaults exist.
Credit risk rating process (*)
The majority of risk ratings are based on a risk rating (PD) model that complies with the minimum
requirements detailed in CRR/CRDIV, ECB Supervisory Rules and European Banking Authority (EBA)
guidelines. This concerns all borrower types and segments.
ING\u2019s PD rating models are based on a 1-22 internal risk rating scale (1 = highest rating; 22 = lowest rating)
referred to as the \u2018master scale\u2019, which roughly corresponds to the rating grades that are assigned by
external rating agencies, such as Standard & Poor\u2019s, Moody\u2019s and Fitch. For example, an ING rating of 1
corresponds to an S&P/Fitch rating of AAA and a Moody\u2019s rating of Aaa; an ING rating of 2 corresponds to an
S&P/Fitch rating of AA+ and a Moody\u2019s rating of Aa1, and so on.
The 22 internal risk rating grades are composed of the following categories:
\u2022 Investment grade (risk rating 1-10);
\u2022 Non-investment grade (risk rating 11-17);
\u2022 Performing Restructuring (risk rating 18-19);
\u2022 Non-performing (risk rating 20-22).
The first three categories (1-19) are risk ratings for performing loans. Ratings are calculated in IT systems
with internally developed models, based on manually or automatically fed data, or for part of the non-
performing loans set by the global or regional credit restructuring department. Under certain conditions, the
outcome of a manually fed model can be challenged through a rating appeal process. For securitisation
portfolios, the external ratings of the tranche in which ING has invested are leading indicators.
Risk ratings assigned to clients are reviewed at least annually, with the performance of the underlying
models monitored regularly. Some of these models are global in nature, such as those for large corporates,
commercial banks, insurance companies, central governments, funds, fund managers, project finance and
leveraged companies. Other models are more regional or country-specific: there are PD models for small
and medium enterprises (SMEs) in the Netherlands, Belgium, Poland as well as residential mortgage and
consumer loan models in the various retail markets.
Rating models for Retail clients are predominantly statistically driven and automated, such that ratings can
be updated on a monthly basis. Rating models for large corporates, institutions and banks include both
statistical characteristics and manual input, with the ratings being manually updated at least annually.
More frequent reviews (e.g. quarterly) are performed where considered necessary, for example portfolios
and clients most at risk of being impacted by the Russian invasion of Ukraine and expected spillover effects.
In line with evolving regulatory expectations on models and emerging industry practices ING has embarked
a multi-year redevelopment process of its credit risk models. This is also in line with ING\u2019s model governance
to ensure continuous improvement of models.
Credit risk portfolio (*)
ING\u2019s credit exposure is mainly related to lending to individuals (also referred to as consumer lending, all
Retail) and businesses (referred to as business lending, both in Retail and Wholesale) followed by
investments in bonds and securitised assets, and money market (Wholesale). Loans to individuals are
mainly mortgage loans secured by residential property. Loans (including guarantees issued) to businesses
are often collateralised, but may be unsecured based on the internal analysis of the borrower\u2019s
creditworthiness. Bonds in the investment portfolio are generally unsecured, but predominantly consist of
bonds issued by central governments and EU and/or OECD-based financial institutions. Secured bonds, such
as mortgage-backed securities and asset-backed securities are secured by the underlying diversified pool of
assets (commercial or residential mortgages, car loans and/or other assets) held by the securities issuer. For
money market, exposure is mainly deposits to central banks. The last major credit risk source involves pre-
settlement exposures which arise from trading activities, including derivatives, repurchase transactions and
securities lending/borrowing transactions. This is also commonly referred to as counterparty credit risk.\u00a0
Portfolio analysis per business line (*)
Outstandings per line of business (*)1, 2, 3
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers & Growth Markets
Corporate line
Total
Rating class
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Investment grade
1 (AAA)
52,665
89,686
310
324
34,373
32,492
2,284
2,529
89,631
125,032
2-4 (AA)
67,034
49,320
7,089
7,871
52,566
40,498
6
12
126,694
97,701
5-7 (A)
95,320
79,292
44,026
45,471
88,051
61,422
147
320
227,543
186,504
8-10 (BBB)
123,081
129,709
118,340
117,172
27,955
56,046
2,357
2,833
271,733
305,760
Non-investment grade
11-13 (BB)
57,348
56,409
57,652
55,945
36,756
46,657
4
151,756
159,016
14-16 (B)
12,234
13,693
16,872
14,224
12,459
11,662
41,565
39,579
17 (CCC)
1,122
1,858
2,129
2,021
985
1,014
392
299
4,628
5,192
Performing Restructuring loans
18 (CC)
2,523
3,564
1,363
1,304
594
519
4,481
5,386
19 (C)
535
731
876
962
437
490
1,848
2,183
Non-performing loans
20-22 (D)
4,051
4,354
4,586
4,762
3,036
2,592
11,673
11,708
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
Industry
Private Individuals
2,330
32
165,447
163,243
193,610
191,556
361,387
354,831
Central Banks
70,139
80,006
21,740
23,541
2,269
1,495
94,147
105,043
Natural Resources
40,511
44,695
1,259
1,160
624
694
42,394
46,549
Real Estate
24,904
26,426
23,675
22,648
2,936
3,439
51,515
52,513
Commercial Banks
37,342
42,036
177
194
6,006
5,721
2,515
2,911
46,040
50,862
Non-Bank Financial Institutions
55,313
54,274
1,400
1,379
890
504
286
438
57,889
56,594
Central Governments
45,316
41,622
2,124
2,880
5,180
3,838
1
1,016
52,621
49,356
Transportation & Logistics
27,106
25,474
4,105
4,038
1,679
1,471
32,890
30,982
Utilities
23,324
22,683
2,024
1,865
160
150
25,509
24,698
Food, Beverages & Personal Care
13,503
13,681
7,307
7,356
2,576
2,585
23,386
23,623
Services
9,128
9,926
11,596
11,606
1,276
981
24
33
22,023
22,546
General Industries
12,039
11,731
5,680
5,753
3,406
3,381
21,126
20,865
Lower Public Administration
6,211
6,020
6,885
5,921
10,608
9,725
23,704
21,666
Other
48,748
50,009
21,563
22,014
6,519
5,805
92
104
76,922
77,932
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
Outstandings per line of business (*) - continued1, 2, 3
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers & Growth Markets
Corporate line
Total
Region
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Europe
Netherlands
54,938
61,143
155,792
154,253
390
254
2,366
2,898
213,486
218,548
Belgium
24,171
27,144
90,450
88,767
1,294
669
7
115,921
116,580
Germany
26,152
24,441
478
463
128,407
127,764
31
63
155,067
152,730
Poland
20,346
16,350
9
49
28,962
26,831
49,317
43,229
Spain
11,047
10,491
109
71
27,049
25,649
35
25
38,240
36,237
United Kingdom
28,587
27,735
150
152
125
185
112
107
28,974
28,179
Luxembourg
23,805
26,113
4,880
4,953
677
639
15
29,363
31,720
France
21,528
18,484
698
643
2,410
4,448
14
1
24,650
23,576
Rest of Europe
65,157
77,814
367
400
20,001
18,750
32
24
85,558
96,989
America
78,851
80,444
201
190
1,841
1,795
222
358
81,114
82,786
Asia
49,851
46,291
69
73
90
121
2,365
2,504
52,374
48,989
Australia
9,409
9,817
14
16
45,963
46,281
2
2
55,389
56,116
Africa
2,071
2,348
24
28
2
5
2,098
2,381
Total
415,914
428,616
253,241
250,056
257,211
253,391
5,186
5,997
931,552
938,061
1 Based on credit risk measurement contained in lending, pre-settlement, money market and investment activities.
2 Based on the total amount of credit risk in the respective column using ING\u2019s internal credit risk measurement methodologies. Economic sectors (industry) below 2% are not shown separately but grouped in Other.
3 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Overall portfolio (*)
During 2023, ING\u2019s portfolio size decreased by \u20ac6.5 billion (-0.69%) to \u20ac931.6 billion outstanding. Foreign
exchange rate changes had a negative impact on the portfolio growth, mainly in WB, decreasing total
outstanding by \u20ac4.6 billion, driven by the depreciation of the US dollar (-3.8%) against the euro, Australian
dollar (-3.4%) and Turkish lira (-42.1%), partly compensated by the Polish zloty (+6.8%).
Rating distribution (*)
Overall, the rating class distribution remained stable in 2023. The share of investment grade rating classes
increased from 76.2% to 76.8%, while the share of non-investment grade decreased from 21.7% to 21.2%.
Performing restructuring outstandings decreased from 0.8% to 0.7% of the total portfolio, whereas non-
performing loans increased from 1.2% to 1.3%. The decrease in AAA and the increase in AA was mainly due
to lower Central banks/Central Governments exposure in AAA-rated countries, partly driven by the
downgrade of the USA to AA rating.
With respect to the rating distribution within the business lines, in WB, investment grade remained at 81.2%,
where non-investment grade exposures increased to 17.1% (from 16.8%) compared to 2022. Performing
Restructuring assets decreased from 1.0% to 0.7% of total Wholesale Banking assets. The share of non-
performing loans for WB remained stable at 1.0%.
The non-investment grade portfolio of Retail Benelux increased from 28.9% to 30.3% of the portfolio, which
is explained primarily by rating migration in mortgages in Belgium. Performing restructuring remained flat
at 0.9% whereas NPL improved to 1.8% (from 1.9%) in 2023.
In Retail Challengers & Growth Markets, the distribution across rating classes remained stable in 2023.
Overall share of investment grade increased from 75.2% to 78.9%. NPL increased to 1.2% (from 1.0%).
Industry (*)
The industry breakdown is presented in accordance with the NAICS definition. Total volume decreased in
2023 from \u20ac938.1 billion to \u20ac931.6 billion (-0.7%), mainly witnessed in Netherlands (-2.3%) and in
Luxembourg (-7.4%) due to a decrease in outstanding at Central Banks. The largest part of our book in terms
of outstandings is in private individuals with 38.8% (2022: 37.8%). Private individuals accounted for 67%
outstanding in Germany, 67% in Spain, 66% Australia and 55% in the Netherlands. The increase in WB
Private individuals is following the discontinuation of Retail Banking France which led to the transfer of the
Retail individuals portfolio from Retail Banking to Wholesale Banking.
Looking at sectors in the Business Lending portfolio, the most notable decrease in outstanding, next to
Central Banks, was in Natural Resources (\u20ac-4.2 billion).
Outstandings by economic sectors and geographical area (*) 1
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
Luxembourg
France
Rest of Europe
America
Asia
Australia
Africa
2023
Private Individuals
116,530
44,637
103,151
14,860
25,452
128
3,347
2,472
14,179
149
121
36,340
20
361,387
Central Banks
31,017
9,756
18,945
2,530
489
4,335
4,853
6,166
13,668
2,379
9
94,147
Natural Resources
2,623
1,346
1,017
685
129
3,789
2,511
429
10,608
8,237
9,785
941
295
42,394
Real Estate
16,907
10,986
1,111
2,184
1,551
420
3,563
2,901
3,492
3,323
1,367
3,709
51,515
Commercial Banks
1,217
404
4,050
601
353
4,488
5,070
4,155
6,757
9,833
8,182
719
210
46,040
Non-Bank Financial Institutions
2,573
1,457
5,710
2,532
652
6,837
4,631
4,274
4,269
20,118
3,884
950
57,889
Central Governments
1,620
9,046
699
8,614
5,491
41
79
2,255
9,384
13,752
520
526
593
52,621
Transportation & Logistics
3,860
2,198
1,277
1,598
658
2,113
596
784
8,177
3,511
7,044
456
618
32,890
Utilities
2,419
1,634
3,516
792
912
2,723
480
619
4,469
4,424
1,306
2,041
173
25,509
Food, Beverages & Personal Care
7,138
3,127
550
2,242
490
540
1,505
1,250
2,455
2,652
1,140
281
18
23,386
Services
5,073
8,463
1,725
1,325
71
745
502
380
1,052
1,576
469
642
22,023
General Industries
5,746
2,604
1,193
2,827
333
199
649
287
3,661
2,848
761
18
21,126
Lower Public Administration
253
6,607
5,349
669
350
249
3,488
356
1,550
7
4,826
23,704
Other
16,510
13,657
6,774
7,858
1,309
2,615
1,326
1,356
10,532
9,141
4,120
1,562
163
76,922
Total
213,486
115,921
155,067
49,317
38,240
28,974
29,363
24,650
85,558
81,114
52,374
55,389
2,098
931,552
Rating class
Investment grade
170,067
71,730
136,675
31,772
29,583
24,299
24,083
18,692
56,404
63,652
44,481
44,139
24
715,602
Non-Investment grade
40,399
40,236
16,929
15,785
8,134
4,508
5,013
5,713
25,967
16,003
6,770
10,715
1,776
197,949
Performing restructuring
1,433
799
349
830
230
2
105
122
1,983
245
72
132
26
6,327
NPL grade
1,587
3,156
1,114
929
293
165
162
124
1,205
1,213
1,051
403
272
11,673
Total
213,486
115,921
155,067
49,317
38,240
28,974
29,363
24,650
85,558
81,114
52,374
55,389
2,098
931,552
1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Outstandings by economic sectors and geographical area (*) 1
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
Luxembourg
France
Rest of Europe
America
Asia
Australia
Africa
2022
Private Individuals
114,625
44,193
101,529
13,767
24,865
138
3,486
2,731
13,654
161
131
35,528
24
354,831
Central Banks
35,202
14,338
21,041
1,060
347
427
6,820
35
18,092
4,962
2,695
24
105,043
Natural Resources
3,084
1,356
809
746
169
4,442
2,764
470
12,154
8,771
10,398
1,028
361
46,549
Real Estate
17,586
10,112
1,388
2,374
1,391
413
3,797
3,155
3,378
3,474
1,180
4,263
2
52,513
Commercial Banks
1,358
265
3,974
551
402
4,933
4,480
4,371
6,368
9,945
12,041
1,765
409
50,862
Non-Bank Financial Institutions
2,710
1,041
5,054
2,299
99
8,229
4,489
3,220
4,495
19,971
4,091
896
56,594
Central Governments
3,342
7,716
1,179
6,578
4,578
46
175
1,797
8,444
13,979
333
636
551
49,356
Transportation & Logistics
3,967
2,183
608
1,300
690
1,787
583
733
7,808
3,378
6,806
531
608
30,982
Utilities
1,551
1,630
2,814
679
1,227
2,953
572
980
4,302
4,347
1,545
1,897
200
24,698
Food, Beverages & Personal Care
7,249
3,002
573
2,334
475
739
1,667
469
2,668
3,245
942
248
13
23,623
Services
4,819
8,816
1,254
1,101
67
685
808
1,066
1,120
1,821
357
632
22,546
General Industries
5,430
2,689
1,007
2,849
311
330
604
245
3,152
2,926
1,311
9
20,865
Lower Public Administration
272
5,638
5,197
644
200
313
3,126
402
1,310
4,564
21,666
Other
17,353
13,602
6,302
6,946
1,416
3,058
1,164
1,179
10,952
9,457
4,891
1,424
188
77,932
Total
218,548
116,580
152,730
43,229
36,237
28,179
31,720
23,576
96,989
82,786
48,989
56,116
2,381
938,061
Rating class
Investment grade
174,971
76,244
130,285
27,501
28,556
23,160
26,053
17,545
64,884
64,206
39,903
41,476
213
714,997
Non-Investment grade
40,325
36,036
20,967
14,596
7,330
4,634
5,442
5,814
27,617
17,615
7,638
13,914
1,858
203,786
Performing restructuring
1,508
984
579
422
105
41
80
16
2,903
311
124
257
239
7,569
Non-performing loans
1,743
3,316
899
710
246
344
145
201
1,584
654
1,325
470
72
11,708
Total
218,548
116,580
152,730
43,229
36,237
28,179
31,720
23,576
96,989
82,786
48,989
56,116
2,381
938,061
1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Portfolio analysis per geographical area (*)
The portfolio analysis per geographical area re-emphasises the international distribution of ING\u2019s credit
portfolio. The share of the Netherlands in the overall portfolio (ex-Central Banks) reduced to 21.8% (2022:
22.0%).
The most noticeable trend in the Netherlands was the decrease in exposure with central banks (-\u20ac4.2
billion). Outstandings to private individuals are at 63.9% (2022: 62.5%) of total outstandings (excl. Central
Banks). In Belgium, no substantial changes were observed in the portfolio.
In terms of rating distribution in individual countries, the total share of investment grade/non-investment
grade remains substantial for the Netherlands at 98.6% (2022: 98.5%) and in Belgium 96.6% (2022: 96.3%).
Performing restructuring grade assets remained flat in the Netherlands at 0.7%, whereas Belgium
decreased from 0.8% to 0.7%. The NPL share decreased in 2023, from 0.8% to 0.7% in the Netherlands, and
from 2.8% to 2.7% in Belgium.
In Challengers & Growth Markets, ING has a sizeable residential mortgages portfolio in Germany, Australia,
Spain and Poland.
The top five countries within Rest of Europe based on outstandings were: Italy (\u20ac18.7 billion), Romania
(\u20ac11.5 billion), Switzerland (\u20ac11.2 billion), T\u00fcrkiye (\u20ac7.2 billion) and Ireland (\u20ac4.7 billion).
In Europe, outside the Benelux, rating distribution in most countries remained stable. The most noticeable
changes in rating distribution were observed in Rest of Europe, where the development of the Russian
portfolio caused a decrease into Performing Restructuring from 3.0% to 2.3%. Note the paragraph on
Russian exposures in section 'Risk management at ING Group'. Apart from Russia, noticeable changes
occurred in the UK, where NPL decreased from 1.2% to 0.6%.
In terms of rating distribution for the Americas region, an increase in NPL is observed to 1.5% (from 0.8%),
whereas in Asia, NPL decreased from 2.7% to 2.0%. In Africa, NPL increased from 3.0% to 13.0%, driven by
one well-covered file.
Credit risk mitigation (*)
ING uses various techniques and instruments to mitigate the credit risk associated with an exposure and to
reduce the losses incurred subsequent to a default by a customer. The most common terminology used in
ING for credit risk protection is \u2018cover\u2019. While a cover may be an important mitigant of credit risk and an
alternative source of repayment, generally it is ING\u2019s practice to lend on the basis of the customer\u2019s
creditworthiness rather than exclusively relying on the value of the cover.
Cover forms (*)
Within ING, there are two distinct forms of covers. First, where the asset has been pledged to ING as
collateral or security, ING has the right to liquidate it should the customer be unable to fulfil its financial
obligation. As such, the proceeds can be applied towards full or partial compensation of the customer's
outstanding exposure. This may be tangible (such as cash, securities, receivables, inventory, plant and
machinery, and mortgages on real estate properties) or intangible (such as patents, trademarks, contract
rights and licences). Second, where there is a third-party obligation, indemnification or undertaking (either
by contract and/or by law), ING has the right to claim from that third party an amount if the customer fails
on its obligations. The most common examples are guarantees, such as parent guarantees, export credit
insurances or third-party pledged mortgages. Insurance or reinsurance covers, including comprehensive
private risk insurance (CPRI) may be recognised as guarantees and effectively function in an equivalent
manner. ING accepts credit risk insurance companies and export credit agencies (ECAs) as cover providers.
Cover valuation methodology (*)
General guidelines for cover valuation are established with the objective of ensuring consistent application
within ING. These also require that the value of the cover is monitored on a regular basis. Covers are
revalued periodically and whenever there is reason to believe that the market is subject to significant
changes in conditions. The frequency of monitoring and revaluation depends on the type of cover.
The valuation method also depends on the type of covers. For asset collateral, the valuation sources can be
the customer\u2019s balance sheet (e.g. inventory, machinery and equipment), nominal value (e.g. cash and
receivables), market value (e.g. securities and commodities), independent valuations (e.g. commercial real
estate) and market indices (e.g. residential real estate). For third-party obligations, the valuation is based on
the value that is attributed to the contract between ING and that third party.
Where collateral values are used in the calculation of stage 3 individual loan loss provisions, haircuts may be
applied to the valuation in specific circumstances, to sufficiently include all relevant factors impacting future
cash flows. ING applies haircuts to the collateral values of real estate, shipping and aviation assets that are
used in the calculation of the loss-given-default in recovery scenarios. The haircut reflects the risks of
adverse price developments between the moment of valuation of an asset and the actual settlement/cash
receipt.
Cover values (*)
This section provides insight into the types of cover and the extent to which exposures benefit from
collateral or guarantees. The disclosure differentiates between risk categories (lending, investment, money
market and pre-settlement). The most relevant types of cover include mortgages, financial collateral (cash
and securities) and guarantees. ING obtains cover that is eligible for credit risk mitigation under CRR/CRDIV,
as well as cover that is not eligible. Collateral covering financial market transactions is valued on a daily
basis, and as such not included in the following tables. To mitigate the credit risk arising from financial
markets transactions, the bank enters into legal agreements governing the exchange of financial collateral
(high-quality government bonds and cash).
The cover values are presented for the total portfolio of ING, both the performing and non-performing
portfolio. Our definition of non-performing is explained in detail in \u2018Credit restructuring\u2019 (below).
The next table gives an overview of the collateralisation of the ING\u2019s total portfolio.
Cover values including guarantees received (*)
in \u20ac million
Cover type and value
Collateralisation
2023
Outstandings
Mortgages
Financial Collateral
Guarantees
Other covers
No Cover
Partially covered
Fully covered
Consumer lending
360,124
804,994
22,401
25,269
29,070
6.2%
2.0%
91.8%
Business lending
363,826
162,491
26,333
115,944
428,531
35.2%
22.5%
42.3%
Investment and money market
158,506
\u2014
\u2014
1,040
549
99.0%
0.6%
0.4%
Total lending, investment and money market
882,455
967,485
48,735
142,252
458,149
34.8%
10.2%
55.0%
of which NPL
11,653
8,880
1,609
3,204
9,241
25.7%
26.9%
47.4%
Pre-settlement
49,096
Total Group
931,552
Cover values including guarantees received (*)
in \u20ac million
Cover type and value
Collateralisation
2022
Outstandings
Mortgages
Financial Collateral
Guarantees
Other covers
No Cover
Partially covered
Fully covered
Consumer lending
353,323
700,961
5,626
24,231
42,817
6.2%
7.6%
86.2%
Business lending
379,405
167,122
29,501
118,294
438,864
37.5%
22.3%
40.2%
Investment and money market
141,432
5
1,213
2
99.1%
0.6%
0.3%
Total lending, investment and money market
874,160
868,083
35,132
143,738
481,683
34.8%
12.9%
52.3%
of which NPL
11,637
7,738
1,007
3,648
3,045
25.2%
25.7%
49.2%
Pre-settlement
63,901
Total
938,061
Excluding the pre-settlement portfolio, 55.0% (2022: 52.3%) of ING\u2019s outstandings were fully collateralised in
2023. Since investments traditionally do not require covers, the percentage for \u2018no covers\u2019 in this portfolio is
above 95%. However, 99% of the investment outstanding is investment grade. Improved economic
conditions in ING\u2019s main markets contributed to improved collateral valuations, observed in consumer
lending.
Consumer lending portfolio (*)
The consumer lending portfolio accounts for 38.7% (2022: 37.7%) of ING\u2019s total outstanding, primarily
consisting of residential mortgage loans and other consumer lending loans. As a result, most collateral
consists of mortgages. Mortgage values are collected in an internal central database and in most cases
external data is used to index the market value. A significant part of ING\u2019s residential mortgage portfolio is in
the Netherlands (34.8%), Germany (28.0%), Belgium including Luxembourg (13.3%) and Australia (10.9%).
Note that the large increase in Financial Collateral and decrease in Other covers is related to a
reclassification of certain cover types.
Business lending portfolio (*)
Business lending accounts for 39.1% (2022: 40.4%) of ING\u2019s total outstanding. Business lending presented in
this section does not include pre-settlement, investment and money market exposures.
Credit quality (*)
Credit quality outstandings\u00a0 (*)
in \u20ac million
2023
2022
Performing not past due
795,942
799,990
Business lending performing past due
8,825
7,659
Consumer lending performing past due
846
780
Non-performing
11,653
11,691
Total lending and investment
817,266
820,120
Money market
65,189
54,039
Pre-settlement
49,096
63,901
Total
931,552
938,061
Past due obligations (*)
Retail Banking measures its portfolio in terms of payment arrears and determines on a monthly basis if
there are any significant changes in the level of arrears. This methodology is applicable to private
individuals, as well as business lending. An obligation is considered \u2018past due\u2019 if a payment of interest or
principal is more than one day late. ING aims to help its customers as soon as they are past due by
reminding them of their payment obligations. In its contact with the customers, ING aims to solve the
(potential) financial difficulties by offering a range of measures (e.g. payment arrangements, restructuring).
If the issues cannot be cured, for example because the customer is unable or unwilling to pay, the contract
is sent to the recovery unit. The facility is downgraded to risk rating 20 (non-performing) when the facility or
obligor \u2013 depending on the level at which the non-performing status is applied \u2013 is more than 90 days past
due and to risk rating 21 or 22 in case of an exit scenario.
ING has aligned the regulatory concept of non-performing with that of the definition of default. Hence, in
WB, obligors are classified as non-performing when a default trigger occurs:
\u2022 ING believes the borrower is unlikely to pay. The borrower has evidenced significant financial difficulty, to
the extent that it will have a negative impact on the future cash flows of the financial asset. The
following events could be seen as indicators of financial difficulty:
\u2022 The borrower (or third party) has started insolvency proceedings;
\u2022 A group company/co-borrower has NPL status;
\u2022 Indication of fraud (affecting the company\u2019s ability to service its debt);
\u2022 There is doubt as to the borrower\u2019s ability to generate stable and sufficient cash flows to service its
debt;
\u2022 Restructuring of debt.
\u2022 ING has granted concessions relating to the borrower\u2019s financial difficulty, the effect of which is a
reduction in expected future cash flows of the financial asset below current carrying amount.
\u2022 The obligor has failed in the payment of principal, interest or fees, the total past due amount is above the
materiality threshold and this remains the case for more than 90 consecutive days.
Further, WB has an individual name approach, using early warning indicators to signal possible future issues
in debt service.
Ageing analysis (past due but performing): Consumer lending portfolio by geographic area, outstandings (*)
in \u20ac million
2023
2022
Region
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Europe
Belgium
223
43
29
295
294
27
18
339
Germany
89
40
18
147
68
34
13
116
Poland
76
8
5
89
59
8
4
71
Netherlands
67
24
6
97
36
10
5
51
Luxembourg
21
2
2
25
43
4
2
48
Spain
19
13
6
38
13
9
5
27
Rest of Europe
64
19
12
94
62
16
8
86
America
1
1
1
1
Asia
1
Australia
43
15
1
59
29
11
2
42
Total
602
164
79
846
604
119
57
780
The past due but performing consumer lending outstanding increased by \u20ac66 million, mainly due to
increase in 31-60 (+\u20ac45 million) and 61-90 (+\u20ac23 million). The largest increase was observed in the
Netherlands (+\u20ac47 million) and Germany (+\u20ac31 million) mainly in the 1-30-day bucket; the largest decrease
was seen in Belgium (-\u20ac44 million) driven by the decrease in the 1-30 bucket.
Ageing analysis (past due but performing): Business lending portfolio by geographic area, outstandings (*)
in \u20ac million
2023
2022
Region
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Total
Past due for 1\u201330 days
Past due for 31\u201360 days
Past due for 61\u201390 days
Past due for >90 days
Total
Europe
Belgium
929
98
11
1,037
579
49
10
639
United Kingdom
623
659
128
1,410
1,147
77
512
1,736
Luxembourg
577
8
11
596
302
1
303
Netherlands
509
10
12
531
730
30
15
775
Poland
346
26
10
383
279
35
14
329
France
58
132
190
83
6
90
Germany
131
110
1
242
44
16
60
Rest of Europe
972
2
2
977
474
239
1
1
715
America
2,508
101
41
2,650
1,901
67
19
1,986
Asia
284
22
306
553
48
601
Australia
501
1
502
359
61
4
2
426
Total
7,437
1,148
240
8,825
6,452
629
575
4
7,659
Total past due but performing outstanding of business lending increased by \u20ac1.2 billion. Increase is observed
in the 1-30 days (\u20ac1.0 billion) past due bucket and in the 31-60 days (\u20ac0.5 billion), partly offset by a
decrease in the 61\u201390 days past due bucket (-\u20ac336 million), driven by the United Kingdom (-\u20ac383 million).\u00a0
Credit restructuring (*)
Global Credit Restructuring (GCR) is the dedicated and independent department that deals with non-
performing loans and loans that hold a reasonable probability that ING will end up with a loss, if no specific
action is taken. GCR handles accounts or portfolios requiring an active approach, which may include
renegotiation of terms and conditions and business or financial restructuring. The loans are managed by
GCR or by units in the various regions and business units. ING uses three distinct statuses to categorise the
management of clients with (perceived) deteriorating credit risk profiles, i.e. there is increasing doubt as to
the performance and the collectability of the client\u2019s contractual obligations:
\u2022 Watch list: Usually, a client is first classified as watch list when there are concerns of any potential or
material deterioration in credit risk profile that may affect the ability of the client to adhere to its debt
service obligations or to refinance its existing loans. Watch list status requires more than usual attention,
increased monitoring and quarterly reviews. Some clients with a watch list status may develop into a
restructuring status or even a recovery status.
\u2022 Restructuring: A client is classified as restructuring when there are concerns about the client\u2019s financial
stability, credit worthiness, and/or ability to repay, but where the situation does not require the
termination or acceleration of facilities or the liquidation of collateral. ING\u2019s actions aim to maintain the
going concern status of the client by:
\u2022 restoring the client\u2019s financial stability;
\u2022 supporting the client\u2019s turnaround;
\u2022 restoring the balance between debt and equity; and
\u2022 restructuring the debt to a sustainable situation.
\u2022 Recovery: A client is classified as in recovery when ING and/or the client concludes that the client\u2019s
financial situation cannot be restored and a decision is made to terminate the (credit) relationship or
even to enter into bankruptcy. ING prefers an amicable exit, but will enforce and liquidate the collateral
or claim under the guarantees if deemed necessary.
Watch list, restructuring and recovery accounts are reviewed at least quarterly by the front office, GCR and
the relevant credit risk management executives.
Forbearance (*)
Forbearance occurs when a client is unable to meet their financial commitments due to financial difficulties
they face or are about to face and ING grants concessions towards them. Forborne assets are assets in
respect of which forbearance measures have been granted.
Forbearance may enable clients experiencing financial difficulties to continue repaying their debt.
For business clients, ING mainly applies forbearance measures to support clients with fundamentally sound
business models that are experiencing temporary difficulties with the aim of maximising the client\u2019s
repayment ability and therewith avoiding a default situation or helping the client to return to a performing
situation.
For ING retail units, clear criteria have been established to determine whether a client is eligible for the
forbearance process. Specific approval mandates are in place to approve the measures, as well as
procedures to manage, monitor and report the forbearance activities.
ING reviews the performance of forborne exposures at least quarterly, either on a case-by-case (business) or
on a portfolio (retail) basis.
All exposures are eligible for forbearance measures, i.e. both performing (risk ratings 1-19) and non-
performing (risk ratings 20-22) exposures. ING uses specific criteria to move forborne exposures from non-
performing to performing or to remove the forbearance statuses that are consistent with the corresponding
European Banking Authority (EBA) standards. An exposure is reported as forborne for a minimum of two
years. An additional one-year probation period is applied to forborne exposures that move from non-
performing back to performing.
Summary Forborne portfolio (*)
in \u20ac million
2023
2022
Business line
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Outstandings
Of which:
performing
Of which:
non-
performing
% of total
portfolio
Wholesale
Banking
6,063
3,919
2,144
1.8%
8,359
5,880
2,478
2.7%
Retail Banking
7,026
4,128
2,898
1.4%
8,080
4,973
3,107
1.6%
Total
13,089
8,047
5,042
1.5%
16,438
10,853
5,585
2.0%
Summary Forborne portfolio by forbearance type (*)
in \u20ac million
2023
2022
Forbearance
type
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Outstandings
Of which:
performing
Of which:
non-
performing
% of
total
portfolio
Loan
modification
11,881
7,550
4,331
1.4%
15,317
10,428
4,889
1.9%
Refinancing
1,208
497
711
0.1%
1,121
426
695
0.1%
Total
13,089
8,047
5,042
1.5%
16,438
10,853
5,585
2.0%
As of 31 December 2023, ING\u2019s total forborne assets decreased by \u20ac3.3 billion compared to 31 December
2022. WB decreased by \u20ac2.3 billion and Retail Banking decreased by \u20ac1.1 billion. The decreases are mainly
caused by passing the two-year probation period following the Covid-19 pandemic.
Wholesale Banking (*)
As of December 2023, WB forborne assets amounted to \u20ac6.1 billion (2022: \u20ac8.4 billion), which represented
1.8% (2022: 2.7%) of the total WB portfolio.
Wholesale Banking: Forborne portfolio by geographical area (*)
in \u20ac million
2023
2022
Region
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Europe
Netherlands
361
301
60
720
630
90
Belgium
454
446
8
659
651
8
Germany
288
148
139
580
466
115
United Kingdom
583
425
158
1,044
721
323
Italy
54
19
34
205
157
48
Norway
6
0
6
33
0
33
Poland
520
519
0
203
189
14
Rest of Europe
1,421
1,142
279
2,176
1,749
427
America
1,025
532
493
1,353
1,032
321
Asia
1,198
277
921
1,107
143
964
Australia
87
87
0
217
132
85
Africa
68
23
45
61
10
51
Total
6,063
3,919
2,144
8,359
5,880
2,478
Wholesale Banking: Forborne portfolio by economic sector (*)
in \u20ac million
2023
2022
Industry
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Natural Resources
788
321
467
1,239
603
636
Real Estate
1,320
1,254
66
2,000
1,917
84
Transportation & Logistics
315
175
139
1,073
868
205
Food, Beverages & Personal
Care
866
465
401
1,082
543
539
Services
284
254
30
697
665
32
Automotive
138
98
40
172
125
46
Utilities
510
255
255
469
255
214
General Industries
145
74
71
255
176
80
Retail
282
104
178
302
227
76
Chemicals, Health &
Pharmaceuticals
571
559
11
191
168
23
Builders & Contractors
133
72
61
168
94
74
Other
712
287
425
710
240
469
Total
6,063
3,919
2,144
8,359
5,880
2,478
The main concentration of forborne assets in a single country was in United States with 13.6% (2022:
11.5%) of the total WB forborne assets.
WB forborne assets decreased by \u20ac2.3 billion compared to 2022, also driven by passing the two-year
probation period following the Covid-19 pandemic. Decrease is mainly visible in the performing forborne
assets (-\u20ac2.0 billion), mainly in the industries Transportation & Logistics, Real Estate and Services. The
decrease was partial offset by an increase for Chemicals, Health and Pharmaceuticals, driven by a few large
individual clients.
WB's forborne assets are mainly concentrated in Real Estate, Food Beverages & Personal Care, Natural
Resources, Chemicals, Health & Pharmaceuticals, and Utilities. These five economic sectors accounted for
67% of the total WB forborne outstandings.
Retail Banking (*)
As of the end of December 2023, Retail Banking forborne assets totalled \u20ac7.0 billion, which represented 1.4%
of the total Retail Banking portfolio. The majority of forborne exposures were in private individuals with
50.5%.
Retail Banking: Forborne portfolio by geographical area (*)
in \u20ac million
2023
2022
Region
Outstandings
Of which:
performing
Of which: non-
performing
Outstandings
Of which:
performing
Of which: non-
performing
Europe
Netherlands
1,483
981
502
2,832
2,043
789
Belgium
2,153
838
1,315
2,644
1,331
1,314
Germany
1,309
1,064
246
804
610
194
Poland
852
522
330
588
309
279
T\u00fcrkiye
25
15
10
64
31
32
Italy
123
51
71
131
52
79
Romania
135
49
86
124
53
71
Spain
138
118
21
35
15
20
Rest of Europe
88
58
30
73
48
25
America
21
20
13
12
Asia
2
1
1
3
1
1
Australia
697
411
286
768
467
302
Africa
1
Total
7,026
4,128
2,898
8,080
4,973
3,107
The main concentration of forborne assets in a single country was in Belgium with 30.6% (2022: 32.7%) of
total Retail Banking forborne assets and 45.4% (2022: 42.3%) of the non-performing forborne assets. Next to
that, Netherlands had 21.1% (2022: 35.0%) of the total Retail forborne assets and Germany 18.6%
(2022:10.0%). The increase in Germany is driven by mortgages, where clients that choose for a repayment
percentage below a certain threshold, though contractually allowed, are conservatively considered forborn.
Non-performing loans (*)
ING\u2019s loan portfolio is under constant review. Loans to obligors that are considered more than 90 days past
due and above applicable thresholds are reclassified as non-performing. For business lending portfolios,
there generally are reasons for declaring a loan non-performing prior to the obligor being 90 days past due.
These reasons include, but are not limited to, ING\u2019s assessment of the customer\u2019s perceived inability to meet
its financial obligations, or the customer filing for bankruptcy or bankruptcy protection.
The table below represents the breakdown by industry of credit risk outstandings that have been classified
as non-performing.
Non-performing Loans: outstandings by economic sector and business lines (*)1
in \u20ac million
Wholesale Banking
Retail Benelux
Retail Challengers &
Growth Markets
Total
Industry
2023
2022
2023
2022
2023
2022
2023
2022
Private Individuals
4
2,210
2,174
2,206
1,954
4,419
4,129
Natural Resources
669
1,369
60
34
25
17
754
1,421
Food, Beverages & Personal
Care
565
672
363
438
157
122
1,085
1,233
Transportation & Logistics
437
367
69
165
65
51
572
583
Services
101
119
415
448
66
61
582
628
Real Estate
592
172
398
486
64
54
1,053
712
General Industries
111
114
270
268
115
100
497
482
Builders & Contractors
124
139
291
244
162
110
577
493
Retail
207
98
121
107
67
39
395
244
Utilities
331
387
12
7
6
7
348
401
Chemicals,
Health &
Pharmaceuticals
101
175
97
115
35
20
233
310
Telecom
378
288
9
12
3
3
390
303
Other
412
440
270
260
66
52
748
753
Total
4,034
4,340
4,583
4,759
3,036
2,592
11,653
11,691
1 Based on lending and investment outstandings.
Non-performing loans: outstandings by economic sectors and geographical area (*)
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
France
Luxembourg
Rest of Europe
America
Asia
Australia
Africa
2023
Private Individuals
609
1,535
885
225
235
3
8
45
489
2
2
380
1
4,419
Natural Resources
30
60
1
23
55
164
31
369
20
754
Food, Beverages & Personal Care
281
157
1
131
139
7
158
82
128
1,085
Transportation & Logistics
110
50
2
51
47
20
1
168
49
1
2
72
572
Services
121
342
2
55
2
3
8
13
37
582
Real Estate
40
297
53
55
9
36
16
7
519
21
1,053
General Industries
145
127
49
99
2
7
24
42
497
Builders & Contractors
113
181
2
135
22
91
32
577
Retail
51
82
36
52
2
14
149
7
395
Utilities
14
5
21
18
153
138
348
Chemicals, Health & Pharmaceuticals
31
77
13
25
64
11
12
233
Telecom
12
1
28
3
13
56
277
390
Other
28
239
42
55
2
1
6
23
46
128
179
748
Total
1,586
3,153
1,114
929
293
165
124
162
1,193
1,210
1,050
403
272
11,653
Non-performing Loans: outstandings by economic sectors and geographical area (*)
in \u20ac million
Region
Total
Industry
Netherlands
Belgium
Germany
Poland
Spain
United Kingdom
France
Luxembourg
Rest of Europe
America
Asia
Australia
Africa
2022
Private Individuals
574
1,538
739
185
194
4
11
36
470
3
4
370
1
4,129
Natural Resources
57
33
14
53
432
77
649
85
21
1,421
Food, Beverages & Personal Care
310
179
24
109
173
7
228
77
126
1,233
Transportation & Logistics
232
58
1
36
47
20
2
154
24
7
1
583
Services
136
375
2
43
5
3
2
21
40
628
Real Estate
89
376
54
84
25
19
7
47
11
712
General Industries
127
142
17
78
31
2
26
58
482
Builders & Contractors
65
187
2
86
20
101
32
493
Retail
31
85
38
26
18
1
13
22
7
2
244
Utilities
6
6
26
23
17
194
129
401
Chemicals, Health & Pharmaceuticals
51
100
2
15
14
100
28
310
Telecom
24
1
3
5
270
303
Other
40
232
48
38
50
10
79
75
130
51
753
Total
1,742
3,312
899
710
246
344
196
145
1,578
654
1,324
470
72
11,691
In 2023, the NPL portfolio stayed relatively flat at \u20ac11.7 billion. An increase in Challengers & Growth retail (+
\u20ac0.4 billion) was offset by decreases in Wholesale Banking (-\u20ac0.3 billion) and Retail Benelux (-\u20ac0.2 billion).
The increase in Challengers & Growth Markets was mainly witnessed in private individuals. In Wholesale
Banking, the decrease in the Natural Resources sector was partially compensated by an increase in Real
Estate sector, especially in the Americas. The top three countries by NPL outstanding are Belgium, the
Netherlands and the Americas.
Loan loss provisioning (*)
ING recognises loss allowances based on the expected credit loss (ECL) model of IFRS 9, which is designed to
be forward-looking. The IFRS 9 impairment requirements are applicable to on-balance sheet financial assets
measured at amortised cost or fair value through other comprehensive income (FVOCI), such as loans, debt
securities and lease receivables, as well as off-balance-sheet items such as undrawn loan commitments,
financial- and non-financial guarantees issued.
ING distinguishes between two types of calculation methods for credit loss allowances:
\u2022 Collective 12-month ECL (Stage 1) and collective lifetime ECL (Stage 2) for portfolios of financial
instruments, as well as collective lifetime ECL for credit-impaired exposures (Stage 3) below \u20ac1 million;
\u2022 Individual lifetime ECL for credit-impaired (Stage 3) financial instruments with exposures above \u20ac1
million.
IFRS 9 models (*)
ING's IFRS 9 models leverage on the internal rating-based (IRB) models (PD, LGD, EAD), which include certain
required conservatism. To include IFRS 9 requirements, such regulatory conservatism is removed from the
ECL parameters (PD, LGD and EAD). The IFRS 9 models apply two other types of adjustments to the IRB ECL
parameters: (i) to the economic outlook and (ii) for Stage 2 and Stage 3 assets only, to the lifetime horizon.
The IFRS 9 model parameters are estimated based on statistical techniques and supported by expert
judgement.
ING has aligned the definition of default for regulatory purposes with the definition of \u2018credit-impaired\u2019
financial assets under IFRS 9 (Stage 3). ING has also aligned its definition of default between IFRS9 and the
regulatory technical standards (RTS) and EBA guidelines. More information can be found in section 1.5.6 of
the consolidated financial statements.
Climate and environmental risks in IFRS 9 models (*)
Climate risk drivers (physical and transition risks) can reduce the ability of businesses and households to
fulfil their obligations due on existing lending contracts. These may also lead to depreciation/ erosion of
collateral values which would translate into higher credit losses and loan-to-value ratios in the lending
portfolio of ING.
At this point in time it is not yet possible to incorporate climate risk separately into IFRS 9 ECL models given
the lack of sufficient empirical historical data and data limitations in the risk assessments on client level.
Where climate and environmental factors have impacted the economy in the recent past or present, these
impacts will currently be implicitly embedded in ING's IFRS9 ECL models through the projected
macroeconomic indicators (e.g. indirectly via GDP growth and unemployment rates). We note however that
our ECL models are primarily sensitive to the short-term economic outlook as we use a three-year time
horizon for macroeconomic outlook, after which a mean reversion approach is applied.
With regard to our evaluation of climate-related matters, where such events have already occurred (e.g.
floods, stranded assets etc.), the impact of such events is individually assessed in the calculation of Stage 3
Individual provisions or management adjustments to ECL models. For example, we consider whether
affected assets have suffered from a significant increase in credit risk (or are credit impaired) and whether
the ECL is appropriate.
Over the near-term time horizon, ING plans to continue to refine its methodologies to evaluate climate risks.
ING is working on putting into practice quantitative methodologies for climate and environmental (C&E) risk
identification, materiality assessment and risk appetite setting. Refer to ESG risk paragraph for further
details on ESG risk management. Going forward, ING aims to continue to close the gaps on climate risk data,
which will enable us to embed climate risks eventually into the IFRS 9 ECL models.
Portfolio quality (*)
The table below describes the portfolio composition over the different IFRS 9 stages and rating classes. The
Stage 1 portfolio represents 91.5% (2022: 91.5%) of the total gross carrying amounts, mainly composed of
investment grade, while Stage 2 makes up 7.4% (2022: 7.3%) and Stage 3 makes up 1.2% (2022: 1.2%) of
the total gross carrying amounts, respectively.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2, 3
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
87,071
1
439
87,510
1
2-4 (AA)
132,159
8
2,553
2
134,711
9
5-7 (A)
231,018
24
6,188
6
237,206
30
8-10 (BBB)
302,967
85
17,004
24
319,971
108
Non-Investment grade
11-13 (BB)
157,387
226
19,273
93
176,661
319
14-16 (B)
26,414
164
19,336
455
45,750
618
17 (CCC)
617
10
4,125
233
4,742
242
Performing Restructuring
18 (CC)
4,617
402
4,617
402
19 (C)
1,919
221
1,919
221
Non-performing loans
20-22 (D)
11,956
3,887
11,956
3,887
Total
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac151 billion) and other positions (\u20ac9 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac67 billion, mainly pre-settlement exposures) included in credit
outstandings but not in the gross carrying amounts.
2 Includes impact from change in accounting policy as disclosed in table Changes in gross carrying amounts and loan loss provisions.
3 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross Carrying
Amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
100,885
2
284
101,169
2
2-4 (AA)
98,181
5
2,493
1
100,675
6
5-7 (A)
177,617
23
4,596
4
182,214
27
8-10 (BBB)
321,308
98
14,714
29
336,023
127
Non-investment grade
11-13 (BB)
155,910
277
17,365
91
173,275
368
14-16 (B)
23,649
168
19,386
471
43,035
639
17 (CCC)
7,671
8
4,572
194
12,244
202
Performing Restructuring
18 (CC)
5,198
595
5,198
595
19 (C)
2,116
293
2,116
293
Non-performing loans
20-22 (D)
11,708
3,841
11,708
3,841
Total
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac150.1 billion) and other positions (\u20ac4.4 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac116.1 billion, mainly guarantees, letters of credit and pre-
settlement exposures) included in credit outstandings but not in the gross carrying amounts.
2 IAS 37 provisions are established for non-credit replacement guarantees not in the scope of IFRS 9. Total IAS 37 provisions (\u20ac109 million) are excluded.
Changes in gross carrying amounts and loan loss provisions (*)
The table below provides a reconciliation by stage of the gross carrying amount and allowances for loans
and advances to banks and customers, including loan commitments and financial guarantees. The transfers
of financial instruments represent the impact of stage transfers upon the gross carrying/nominal amount
and associated allowance for ECL. This includes the net-remeasurement of ECL arising from stage transfers,
for example, moving from a 12-month (Stage 1) to a lifetime (Stage 2) ECL measurement basis.
The net-remeasurement line represents the changes in provisions for facilities that remain in the same
stage.
Please note the following comments with respect to the movements observed in the table below:
\u2022 The opening balance is impacted by a change in accounting policy following the adoption of IFRS 17,
more specifically for loans with death waivers that no longer meet the \u2018solely payments of principal and
interest\u2019 (SPPI) criterion (\u20ac-55 million loan loss provisions impact) which are no longer recorded at
amortised cost, and a change in policy for non-financial guarantees that are subject to contractual
indemnification rights which led to a reclassification of the existing IAS 37 provision (\u20ac109 million loan
loss provisions impact) and a remeasurement of these non-financial guarantees (\u20ac42 million loan loss
provisions impact). Reference is made to Note 1 'Basis of preparation and significant changes in the
current reporting period'.
\u2022 Stage 3 gross carrying amount increased slightly to \u20ac12.0 billion as at 31 December 2023, as new inflow
into NPL (credit impaired) in 2023 was only partly offset by repayments, derecognitions and write-offs.
Stage 3 provisions remained more or less flat at \u20ac3.9 billion.
\u2022 Stage 2 gross carrying amount increased by \u20ac0.1 billion from \u20ac75.4 billion (after changes in accounting
policies) as at 31 December 2022 to \u20ac75.5 billion as at 31 December 2023. An increase of Stage 2
exposure, driven by the implementation of an updated methodology for interest-only mortgages in the
Netherlands, was offset by outflow due to improved macro economic outlook, decrease of exposure due
to sales and repayments (including Russian exposure), forborne customers returning to Stage 1 after the
probation period has ended and other improved risk drivers. As a result, Stage 2 provisions also
decreased by \u20ac0.3 billion to \u20ac1.4 billion as of 31 December 2023.
Changes in gross carrying amounts and loan loss provisions (*)1, 2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
Impact of changes in accounting policies
37,078
9
4,704
13
158
73
41,939
95
Adjusted opening balance
922,300
590
75,429
1,692
11,866
3,914
1,009,595
6,196
Transfer into 12-month ECL (Stage 1)
11,832
28
-11,583
-239
-249
-36
-247
Transfer into lifetime ECL not credit impaired (Stage 2)
-29,470
-67
30,185
449
-716
-105
277
Transfer into lifetime ECL credit impaired (Stage 3)
-2,053
-10
-1,775
-115
3,828
978
853
Net remeasurement of loan loss provisions
-149
-94
59
-184
New financial assets originated or purchased
195,775
204
195,775
204
Financial assets that have been derecognised
-121,991
-72
-14,239
-215
-1,475
-266
-137,705
-553
Net drawdowns and repayments
-38,758
-2,525
-229
-41,511
Changes in models/risk parameters
8
10
84
102
Increase in loan loss provisions
-58
-204
714
452
Write-offs
-3
-3
-38
-38
-1,070
-1,070
-1,111
-1,111
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-12
-15
258
231
Closing balance
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac520 million of which \u20ac483 million related to IFRS 9 eligible financial assets, -\u20ac31 million related to non-credit replacement guarantees and \u20ac68 million to modification gains and losses
on restructured financial assets.
Changes in gross carrying amounts and loan loss provisions (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
890,386
501
49,476
1,016
12,072
3,851
951,934
5,368
Transfer into 12-month ECL (Stage 1)
8,513
21
-8,105
-142
-408
-47
-168
Transfer into lifetime ECL not credit impaired (Stage 2)
-42,439
-76
43,222
730
-784
-90
564
Transfer into lifetime ECL credit impaired (Stage 3)
-3,524
-8
-1,216
-82
4,740
1,234
1,144
Net remeasurement of loan loss provisions
8
223
199
430
New financial assets originated or purchased
248,443
228
248,443
228
Financial assets that have been derecognised
-138,250
-70
-11,312
-94
-2,805
-215
-152,366
-379
Net drawdowns and repayments
-77,907
-1,340
21
-79,226
Changes in models/risk parameters
-8
13
25
30
Increase in loan loss provisions
95
648
1,106
1,849
Write-offs
-1
-1,129
-1,129
-1,129
-1,130
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-15
16
-58
-57
Closing balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Stage 3 Lifetime credit impaired provision includes \u20ac7 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac1.861 million of which \u20ac1.850 million related to IFRS 9 eligible financial assets, -\u20ac3 million related to non-credit replacement guarantees and \u20ac14 million to modification gains and
losses on restructured financial assets.
Modification of financial assets (*)
The table below provides the following information:
\u2022 Financial assets that were modified during the year (i.e. qualified as forborne) while they had a loss
allowance measured at an amount equal to lifetime ECL.
\u2022 Financial assets that were reclassified to stage 1 during the period.
Financial assets modified (*)
in \u20ac million
2023
2022
Financial assets modified during the period
Amortised cost before modification
1,565
1,304
Net modification results
-75
-124
Financial assets modified since initial recognition
Gross carrying amount at 31 December of financial assets for which loss allowance has
changed to 12-month measurement during the period
2,599
2,382
Macroeconomic scenarios and sensitivity analysis of key sources of estimation
uncertainty (*)
Methodology (*)
Our methodology in relation to the adoption and generation of macroeconomic scenarios is described in
this section. We continue to follow this methodology in generating our probability-weighted ECL, with
consideration of alternative scenarios and management adjustments supplementing this ECL where, in
management's opinion, the consensus forecast does not fully capture the extent of recent credit or
economic events. The macroeconomic scenarios are applicable to the whole ING portfolio in the scope of
IFRS 9 ECLs.
The IFRS 9 standard, with its inherent complexities and potential impact on the carrying amounts of our
assets and liabilities, represents a key source of estimation uncertainty. In particular, ING\u2019s reportable ECL
numbers are sensitive to the forward-looking macroeconomic forecasts used as model inputs, the
probability-weights applied to each of the three scenarios, and the criteria for identifying a significant
increase in credit risk. As such, these crucial components require consultation and management judgement,
and are subject to extensive governance.
Baseline scenario (*)
As a baseline for IFRS 9, ING has adopted a market-neutral view combining consensus forecasts for
economic variables (GDP, unemployment) with market forwards (for interest rates, exchange rates and oil
prices). Input from a leading third-party service provider is used to complement the consensus with
consistent projections for variables for which there are no consensus estimates available (most notably
house prices and \u2013 for some countries - unemployment), to generate alternative scenarios, to convert
annual consensus information to a quarterly frequency and to ensure general consistency of the scenarios.
As the baseline scenario is consistent with the consensus view it can be considered as free from any bias.
The relevance and selection of macroeconomic variables is defined by the ECL models under credit risk
model governance. The scenarios are reviewed and challenged by two panels of ING experts. The first panel
consists of (economic) experts from Global Markets Research, risk and modelling, while the second panel
consists of relevant senior managers in ING.
Alternative scenarios and probability weights (*)
Two alternative scenarios are taken into account: an upside and a downside scenario. The alternative
scenarios have statistical characteristics as they are based on the forecast deviations of the leading third-
party service provider.
To understand the baseline level of uncertainty around any forecast, the leading third-party service provider
keeps track of all its deviations (so called forecast errors) of the past 20 years. The distribution of forecast
errors for GDP, unemployment, house prices and share prices is applied to the baseline forecast creating a
broad range of alternative outcomes. In addition, to understand the balance of risks facing the economy in
an unbiased way, the leading third-party service provider runs a survey with respondents from around the
world and across a broad range of industries. In this survey respondents put forward their views of key risks.
Following the survey results, the distribution of forecast errors (that is being used for determining the
scenarios) may be skewed.
For the downside scenario, ING has chosen for the 90th percentile of that distribution because this
corresponds with the way risk management earnings-at-risk is defined within the Group. The upside
scenario is represented by the 10th percentile of the distribution. The applicable percentiles of the
distribution imply a 20 percent probability for each alternative scenario. Consequently, the baseline scenario
has a 60 percent probability weighting. Please note that, given their technical nature, the downside and
upside scenarios are not based on an explicit specific narrative.
Macroeconomic scenarios applied (*)
The macroeconomic scenarios applied in the calculation of\u00a0 loan loss provisions are based on the consensus
forecasts.
Baseline assumptions (*)
The general picture that the consensus conveys is that global economic growth is going through a weak
spell. Inflation has been coming down as energy prices have moderated, demand has weakened and
pandemic-related supply problems have eased. Higher interest rates play their part in slowing demand.
Although central banks could well be done with hiking interest rates \u2013 as inflation continues to fall \u2013 the
lagged impact of past monetary tightening is still feeding through to the real economy. This is expected to
cause GDP growth to come in even weaker in 2024, but pickup thereafter as the negative effects from tight
monetary policy and high inflation fade. The high-interest rate environment is currently causing corrections
in house prices, especially in markets where prices surged during the pandemic. Housing market corrections
are assumed to gradually decrease in strength.
The December 2023 consensus expects global output (as measured by the weighted average GDP growth
rate of ING's 25 main markets) to slow from 2.6 percent in 2022, to 2.4 percent in 2023 and 1.8 percent in
2024. For 2025-2026, economic growth is expected to pick up again to 2.3 percent and 2.4 percent.
The US economy outperformed expectations in 2023, driven by strong consumer spending and fiscal
support. Still, headwinds have been building up, in part driven by the much higher interest rates currently
experienced. While an outright recession is not expected, the consensus does foresee a marked slowdown in
economic activity in the US in 2024. After this, the US economy is expected to gather strength again in
2025. The consensus expects the growth rate of the US economy to fall from 2.2 percent in 2023 to 0.9
percent in 2024 and to recover to 2 percent on average in 2025-2026.
The eurozone economy is facing broad stagnation as it deals with the impact of the war in Ukraine, energy
crisis, and higher interest rates. While inflation is coming down, the impact of last year\u2019s purchasing power
shock is still being felt. Monetary tightening works with a lag, which will still affect economic activity next
year. Overall, the eurozone economy is forecasted to have grown by just 0.5 percent in 2023, but Germany
has gone through recession reflecting its large (energy-intensive) manufacturing sector, and exposure to a
disappointing Chinese economy. For next year, the recovery is expected to be very modest as consensus
expects the eurozone to grow by only 0.8 percent in 2024, before recovering to 1.4 percent on average in
2025-2026.
Elsewhere in Europe, the outlook is mixed. In Poland, after an expected 0.4 percent growth in 2023, the
economy is expected to recover by 2.5 percent in 2024 led by household consumption growth. Wage
growth is set to remain strong while inflation has subsided substantially. The consensus expectation for
T\u00fcrkiye is to see growth slow substantially in 2024 with unemployment remaining around 10 percent for the
foreseeable future. The consensus sees economic growth in T\u00fcrkiye slowing from 3.5 percent in 2023, to 2.1
percent in 2024 and increasing again to 3.3 percent on average in 2025-2026. The Russian economy has
started to recover from the 2022 recession, but growth is set to moderate after 1.7 percent in 2023 to 1.2
percent on average in 2024-2026.
2023 was supposed to be the year of a strong reopening for China, but growth did not meet expectations.
Weak global demand for goods has resulted in a weaker than expected industrial performance and the real
estate sector continues to be a source of concern. For the 2024-2026 period, economic growth is expected
to come in at only 4.2 percent despite increased stimulus.
The global economic slowdown and tighter monetary policy continue to weigh on economic growth in
Australia. After growing by 1.7 percent in 2023, the outlook sees a growth rate of 1.3 percent for 2024 and
some pick-up to 2.4 percent and 2.5 percent for 2025-2026. Unemployment is expected to run up a little
more, from 4.1 percent in 2023 to 4.4 percent, but decrease again thereafter.
When compared to the December 2022 consensus forecast, used for the 2022 Annual Report, the December
2023 forecast assumes somewhat better economic circumstances in 2023 but weaker for 2024. The
forecast assumes to have Global GDP increased by 2.4 percent in 2023 (compared to 1.3 percent assumed
before) and is expected to grow by 1.8 percent in 2024 (2.4 percent assumed before). The upgrade for 2023
reflects the better than expected economic performance of the US and eurozone as a recession on the back
of the energy crisis was avoided, while the downgrade for 2024 reflects the impact of substantial monetary
tightening.
Alternative scenarios and risks (*)
Because of the possible consequences of geopolitical risks, uncertainty surrounding the forecasts was higher
in 2022. During 2023, the uncertainty level around the forecasts gradually decreased. To take this into
account, ING applies normal levels of dispersion in the alternative scenarios used for year-end 2023
provisioning. For year-end 2022 half-widened dispersion levels were used, by which the near-term
dispersion of the forward-looking distributions (from which the alternative scenarios are derived) was larger
than in normal times.
The baseline scenario assumes a further easing of inflation in 2024 and relatively resilient labour markets.
However, a longer period of weakness, due to even more concerning geopolitical tensions, persistent
elevated inflation and a slowdown in China could lead to a more protracted and deeper economic
slowdown. As such, the balance of risks to the baseline outlook is negative and the alternative scenarios
have a downward skew in line with the outcomes of the Global Risk Survey from a leading third-party
service provider. The downward skew remained stable compared to what has been applied for year-end
2022, continuing to reflect risks related to possible escalation of geopolitical tensions, a prolonged surge in
inflation and tightening monetary policy.
The downside scenario, though technical in nature, sees for most countries a recession in 2024.
Unemployment increases strongly in this scenario and house prices in most countries show outright falls.
The downside scenario captures a possible escalation of geopolitical tensions, a prolonged surge in inflation
and further slowing in China.
The upside scenario \u2013 while equally technical in nature \u2013 reflects the possibility of a better economic outturn
if consumers spend more of their excess savings, geopolitical risks subside and China stimulus works out
more strongly than expected.
Management adjustments applied this year (*)
In times of volatility and uncertainty where portfolio quality and the economic environment are changing
rapidly, models alone may not be able to accurately predict losses. In these cases, management
adjustments can be applied to appropriately reflect ECL. Management adjustments can also be applied
where the impact of the updated macroeconomic scenarios is over- or under-estimated by the IFRS 9
models.
ING has internal governance frameworks and controls in place to assess the appropriateness of all
management adjustments, involving first- and second lines of defence.
Management adjustments to ECL models (*)
in \u20ac million
2023
2022
Economic sector based adjustments
36
71
Inflation and interest rate increases / second-order impact adjustments
351
334
Mortgage portfolio adjustments
126
105
Other post model adjustments
64
-57
Total management adjustments
577
453
The economic sector-based adjustments of \u20ac36 million as of 31 December 2023 (\u20ac71 million as at 31
December 2022) fully relates to Business Banking clients that have benefited from Covid-19-related
government support programmes in the Netherlands. In line with 2022, it became clearer during 2023 that
the Covid-19 pandemic had less impact than expected on the number of defaults in related sectors with
relatively high tax debt to be repaid; the economic sector-based management adjustment has therefore
been partially released. The remaining management adjustment is related to sectors with relatively high tax
debt to be repaid\u00a0 and is expected to materialise with delayed effect. The \u20ac10 million adjustment on the
livestock farming sector in the Netherlands that was also included in December 2022, related to nitrogen
reduction targets has been fully released following improved risk metrics.
ING has performed further assessment for both WB and Retail Banking on the impact of second-order
effects. The second-order adjustments as at December 2022 captured a wider range of indirect effects such
as supply chain issues, staffing shortages and high energy prices. In 2023, the risks from high inflation and
rapidly increasing interest rates became more apparent compared to other indirect effects, causing a shift
in focus of this adjustment. This resulted in an overall adjustment for inflation and interest rate increases of
\u20ac351 million in total as at 31 December 2023, of which \u20ac138 million (31 December 2022: \u20ac164 million)
relates to Retail Banking segments and \u20ac213 million (31 December 2022: \u20ac170 million) to the Wholesale
Banking segment.
As the credit risk models in Retail Banking generally assume that inflation and interest rate increases risks
materialise via other risk drivers such as GDP and unemployment rates with a delay, an overlay approach
was determined. The methodology considers debt-to-income ratios and the percentage of loans that are
expected to reprice within one year to timely estimate the expected credit losses related to reduced
repayment capacity and affordability for private individuals and business clients in the Retail Banking
segment.
In Wholesale Banking, the IFRS 9 credit risk models mostly leverage on GDP growth as a generic
macroeconomic variable. High inflation and rapidly increasing interest rates however trigger economic
heterogeneity (i.e. some businesses benefit, while others suffer), as such the current circumstances are
expected to cause more defaults than normally predicted using GDP growth. A sector-based heatmap
approach was used to adjust the probability of default for clients in sectors that are expected to be
significantly impacted by high inflation and increased interest rates, including refinancing risk. The
adjustment is predominantly visible in the commercial real estate sector and reflected in Stage 1 and Stage
2.
The overall mortgage portfolio adjustment as at 31 December 2023 increased to \u20ac126 million (31 December
2022: \u20ac105 million), as an adjustment of \u20ac115 million has been recognised in 2023 following new insights
from a risk segmentation model that captures affordability, repayment and refinancing risk on performing
mortgage customers with a bullet loan in the Netherlands.
The mortgage portfolio adjustment that relates to significant increase of house prices was reduced to \u20ac11
million as at 31 December 2023, coming from \u20ac105 million as at December 2022. This decrease is reflecting
the decline in house prices in various countries, subsequent materialisation into increased model-based ECL
as well as an improved market outlook on the recovery value of residential real estate. ING still recognises a
management adjustment related to house prices in Stage 2 and Stage 3 on the mortgage portfolios in
Germany to maintain an appropriate level of ECL. The management adjustments are determined by
calculating the impact of lower house prices on loan-to-value (LTV) and loss given default (LGD).
Other post-model adjustments (PMAs) mainly relate to the impact of model redevelopment or recalibration
and periodic model assessment procedures that have not been incorporated in the ECL models yet; the
impact on total ECL can be positive or negative. These can result from both regular model maintenance and
ING\u2019s multi-year programme to update ECL models for the definition of default. These adjustments will be
removed once updates to the specific models have been implemented. The change in balance compared to
the previous reporting date is due to i) released PMAs because of model updates that have been
implemented, and ii) new PMAs recognised for new redevelopments and recalibrations.
Analysis on sensitivity (*)
The table below presents the analysis on the sensitivity of key forward-looking macroeconomic inputs used
in the ECL collective-assessment modelling process and the probability weights applied to each of the three
scenarios. The countries included in the analysis are the most significant geographic regions in ING and for
Wholesale Banking the US is the most significant in terms of both gross contribution to reportable ECL, and
sensitivity of ECL to forward-looking macroeconomics. Accordingly, ING considers these portfolios to present
the most significant risk of resulting in a material adjustment to the carrying amount of financial assets
within the next financial year. ING also observes that, in general, the WB business is more sensitive to the
impact of forward-looking macroeconomic scenarios.
The purpose of the sensitivity analysis is to enable the reader to understand the extent of the impact from
the upside and downside scenario on model-based reportable ECL.
In the table below, the real GDP is presented in percentage year-on-year change, the unemployment in
percentage of total labour force and the house price index (HPI) in percentage year-on-year change.
Sensitivity analysis as at December 2023\u00a0 (*)
2024
2025
2026
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
1.3
3.3
2.8
214
20%
310
Unemployment
3.7
3.3
3.3
HPI
10.4
11.2
4.0
Baseline scenario
Real GDP
0.8
1.6
1.5
282
60%
Unemployment
4.1
4.3
4.5
HPI
0.9
3.0
3.9
Downside scenario
Real GDP
-1.7
-1.2
0.1
487
20%
Unemployment
5.9
7.2
8.1
HPI
-10.9
-7.4
3.7
Germany
Upside scenario
Real GDP
1.4
3.1
1.6
472
20%
525
Unemployment
2.6
2.0
1.7
HPI
0.9
6.6
8.0
Baseline scenario
Real GDP
0.5
1.3
1.2
513
60%
Unemployment
3.0
3.0
3.0
HPI
-1.4
3.4
4.5
Downside scenario
Real GDP
-2.4
-1.4
0.3
615
20%
Unemployment
4.5
5.2
5.5
HPI
-6.0
-0.8
0.4
Belgium
Upside scenario
Real GDP
1.5
2.7
2.3
568
20%
619
Unemployment
5.3
5.0
4.9
HPI
1.3
5.6
4.5
Baseline scenario
Real GDP
0.9
1.5
1.8
604
60%
Unemployment
5.6
5.5
5.4
HPI
0.4
5.2
3.9
Downside scenario
Real GDP
-1.3
-0.2
1.2
713
20%
Unemployment
7.3
8.0
7.9
HPI
-2.2
3.9
2.6
United States
Upside scenario
Real GDP
1.8
3.2
3.4
102
20%
165
Unemployment
4.1
3.3
3.1
HPI
0.6
8.7
8.7
Baseline scenario
Real GDP
0.9
1.9
2.1
144
60%
Unemployment
4.5
4.5
4.4
HPI
-0.7
3.5
3.3
Downside scenario
Real GDP
-1.3
-1.4
-0.1
292
20%
Unemployment
6.6
8.2
8.8
HPI
-4.2
-2.7
-3.0
\u00b9 Excluding management adjustments.
Sensitivity analysis as at December 2022 (*)
2023
2024
2025
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
2.2
2.3
2.9
274
20%
381
Unemployment
4.0
3.9
3.8
HPI
13.0
11.8
2.5
Baseline scenario
Real GDP
0.2
1.4
1.8
349
60%
Unemployment
4.5
4.8
4.9
HPI
3.7
3.7
2.4
Downside scenario
Real GDP
-4.2
0.7
0.9
583
20%
Unemployment
6.4
7.8
8.7
HPI
-8.0
-6.5
2.2
Germany
Upside scenario
Real GDP
1.7
2.3
1.8
606
20%
745
Unemployment
2.6
2.2
1.8
HPI
0.6
3.9
6.2
Baseline scenario
Real GDP
-0.7
1.4
1.5
726
60%
Unemployment
3.2
3.1
3.1
HPI
-1.8
0.9
2.7
Downside scenario
Real GDP
-4.8
0.1
1.0
942
20%
Unemployment
4.8
5.3
5.6
HPI
-6.2
-3.3
-1.4
Belgium
Upside scenario
Real GDP
1.7
2.1
2.1
535
20%
596
Unemployment
5.5
5.5
5.3
HPI
2.3
2.6
3.1
Baseline Scenario
Real GDP
0.0
1.6
1.8
584
60%
Unemployment
6.1
6.3
6.1
HPI
1.4
2.2
2.5
Downside scenario
Real GDP
-3.2
1.0
1.5
692
20%
Unemployment
7.5
8.5
8.4
HPI
-1.2
0.9
1.2
United States
Upside scenario
Real GDP
3.0
1.5
3.4
100
20%
221
Unemployment
3.4
2.8
2.5
HPI
3.7
7.4
8.1
Baseline Scenario
Real GDP
0.2
1.1
2.3
188
60%
Unemployment
4.3
4.4
3.9
HPI
2.5
2.2
2.8
Downside scenario
Real GDP
-4.1
0.2
0.6
442
20%
Unemployment
6.4
7.7
8.2
HPI
-1.2
-3.8
-3.5
\u00b9 Excluding management adjustments.
When compared to the sensitivity analysis of 2022, the macroeconomic inputs for 2023 are somewhat
more favourable and for 2024 less favourable as the lagged impact of monetary tightening is still feeding
through to the real economy. The sensitivities for 2022 contain half-widened dispersion around the upside
and downside scenarios, whereas half-widened dispersion was removed for these scenarios for the 2023
sensitivity analysis following a continued decrease in forecast uncertainty.
On a total ING level, the unweighted model ECL for all collective provisioned clients in the upside scenario
was \u20ac2,510 million, in the baseline scenario \u20ac2,802 million, and in the downside scenario \u20ac3,668 million. This
reconciles as follows to the reported ECLs:
Reconciliation of reportable collective ECL to total ECL (*)
in \u20ac million
2023
2022
Total reportable collective provisions
2,856
3,209
ECL from individually assessed impairments
2,406
2,439
ECL from management adjustments
577
453
Total ECL
5,839
6,101
Criteria for identifying a significant increase in credit risk (SICR) (*)
All assets and off-balance-sheet items that are in scope of IFRS 9 impairment and which are subject to
collective ECL assessment are allocated a 12-month ECL if deemed to belong in Stage 1, or a lifetime ECL if
deemed to belong in Stages 2 or 3. An asset belongs in Stage 2 if it is considered to have experienced a
significant increase in credit risk since initial origination or purchase. ING considers the credit risk of an asset
to have significantly increased when either a threshold for absolute change in lifetime probability of default
(PD) or a relative change in lifetime PD is reached.
It should be noted that the lifetime PD thresholds are not the only drivers of stage allocation. An asset can
also change stages as a result of other triggers, such as having over 30 days arrears, being on a watch list or
being forborne. Refer to section 1.5.6 of Note 1 \u2018Basis of preparation and significant accounting policies\u2019 for
an exhaustive list. Furthermore, this analysis is rudimentary in the sense that other parameters would
change when an asset changes stages.
Absolute lifetime PD threshold
The absolute threshold is a fixed value calibrated per portfolio/segment and provides a fixed threshold that,
if exceeded by the difference between lifetime PD at reporting date and lifetime PD at origination, triggers
Stage 2 classification. The expert-based thresholds for the absolute change in lifetime PD vary between
75bps for Retail portfolios, 100bps for WB and 250bps for SMEs, based on the characteristics of the specific
portfolio. ING is in the process of refining the thresholds on a portfolio level. These have already been
implemented for part of the portfolio, resulting in calibrated instead of expert-based absolute lifetime PD
thresholds.
Relative lifetime PD threshold
The relative threshold defines a relative increase of the lifetime PD beyond which a given facility is classified
in Stage 2 because of significant increase in credit risk. The relative threshold is dependent on the individual
PD assigned to each facility at the moment of origination and a scaling factor calibrated in the model
development phase that is optimised depending on the observed default rates and overall average riskiness
of the portfolio. While the scaling factor is associated with a whole portfolio/segment, the PD at origination
is facility-specific and, in this sense, the relative threshold may differ facility by facility.
Ultimately the relative threshold provides a criterion to assess whether the ratio (i.e. increase) between
lifetime PD at reporting date and lifetime PD at origination date is deemed a significant increase in credit
risk. If the threshold is breached, SICR is identified and Stage 2 is assigned to the given facility.
The threshold for the relative change in lifetime PD is inversely correlated with the PD at origination; the
higher the PD at origination, the lower the threshold. The logic behind this is to allow facilities originated in
very favourable ratings to downgrade for longer without the need of a Stage 2 classification. In fact, it is
likely that such facilities will still be in favourable ratings even after a downgrade of a few notches. On the
contrary, facilities originated in already unfavourable ratings grades are riskier and even a single-notch
downgrade might represent a significant increase in credit risk and thus a tighter threshold will be in place.
Still, the relative threshold is relatively sensitive for investment grade assets while the absolute threshold
primarily affects non-investment grade assets.
Average threshold ratio
In the table below the average increase in PD at origination needed to be classified in Stage 2 is reported,
taking into account the PD at origination of the facilities included in each combination of asset class and
rating quality. In terms of rating quality, assets are divided into 'investment grade' and 'non-investment
grade' facilities. Rating 18 and 19 are not included in the table since facilities are not originated in these
ratings and they constitute a staging trigger of their own (i.e. if a facility is ever to reach rating 18 or 19 at
reporting date, it is classified in Stage 2). In the table, values are weighted by IFRS 9 exposure and shown for
both year-end 2022 and year-end 2023.
To represent the thresholds as a ratio (i.e. how much should the PD at origination increase in relative terms
to trigger Stage 2 classification) the absolute threshold is recalculated as a relative threshold for disclosure
purposes. Since breaching only relative or absolute threshold triggers Stage 2 classification, the minimum
between the relative and recalculated absolute threshold is taken as value of reference for each facility.
Quantitative SICR thresholds (*)
2023
2022
Average threshold ratio
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Asset class category
Mortgages
2.5
2.3
2.7
2.3
Consumer lending
2.9
2.1
2.8
1.8
Business lending
2.7
2.1
2.8
2.1
Governments and financial institutions
3.0
1.9
3.0
1.9
Other Wholesale Banking
2.8
1.8
2.8
1.9
As it is apparent from the disclosures above, as per ING\u2019s methodology, the threshold is tighter the higher
the riskiness at origination of the assets, illustrated by the difference between the average threshold applied
to investment grade facilities and non-investment grade facilities.
Sensitivity of ECL to PD lifetime PD thresholds
The setting of PD threshold bands requires management judgement and is a key source of estimation
uncertainty. On Group level, the total model ECL on performing assets, which is the ECL collective-
assessment without taking management adjustments into account, is \u20ac1,412 million. To demonstrate the
sensitivity of the ECL to these PD thresholds bands, hypothetically solely applying the upside scenario would
result in total model ECL on performing assets of \u20ac1,054 million and a decrease in the Stage 2 ratio by -0.5
percentage point, while solely applying the downside scenario in our models would result in total model ECL
on performing assets of \u20ac2,290 million and an increase in the Stage 2 ratio by 3.8 percentage-point.", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-4": { "value": "
Loan loss provisioning (*)
ING recognises loss allowances based on the expected credit loss (ECL) model of IFRS 9, which is designed to
be forward-looking. The IFRS 9 impairment requirements are applicable to on-balance sheet financial assets
measured at amortised cost or fair value through other comprehensive income (FVOCI), such as loans, debt
securities and lease receivables, as well as off-balance-sheet items such as undrawn loan commitments,
financial- and non-financial guarantees issued.
ING distinguishes between two types of calculation methods for credit loss allowances:
\u2022 Collective 12-month ECL (Stage 1) and collective lifetime ECL (Stage 2) for portfolios of financial
instruments, as well as collective lifetime ECL for credit-impaired exposures (Stage 3) below \u20ac1 million;
\u2022 Individual lifetime ECL for credit-impaired (Stage 3) financial instruments with exposures above \u20ac1
million.
IFRS 9 models (*)
ING's IFRS 9 models leverage on the internal rating-based (IRB) models (PD, LGD, EAD), which include certain
required conservatism. To include IFRS 9 requirements, such regulatory conservatism is removed from the
ECL parameters (PD, LGD and EAD). The IFRS 9 models apply two other types of adjustments to the IRB ECL
parameters: (i) to the economic outlook and (ii) for Stage 2 and Stage 3 assets only, to the lifetime horizon.
The IFRS 9 model parameters are estimated based on statistical techniques and supported by expert
judgement.
ING has aligned the definition of default for regulatory purposes with the definition of \u2018credit-impaired\u2019
financial assets under IFRS 9 (Stage 3). ING has also aligned its definition of default between IFRS9 and the
regulatory technical standards (RTS) and EBA guidelines. More information can be found in section 1.5.6 of
the consolidated financial statements.
Climate and environmental risks in IFRS 9 models (*)
Climate risk drivers (physical and transition risks) can reduce the ability of businesses and households to
fulfil their obligations due on existing lending contracts. These may also lead to depreciation/ erosion of
collateral values which would translate into higher credit losses and loan-to-value ratios in the lending
portfolio of ING.
At this point in time it is not yet possible to incorporate climate risk separately into IFRS 9 ECL models given
the lack of sufficient empirical historical data and data limitations in the risk assessments on client level.
Where climate and environmental factors have impacted the economy in the recent past or present, these
impacts will currently be implicitly embedded in ING's IFRS9 ECL models through the projected
macroeconomic indicators (e.g. indirectly via GDP growth and unemployment rates). We note however that
our ECL models are primarily sensitive to the short-term economic outlook as we use a three-year time
horizon for macroeconomic outlook, after which a mean reversion approach is applied.
With regard to our evaluation of climate-related matters, where such events have already occurred (e.g.
floods, stranded assets etc.), the impact of such events is individually assessed in the calculation of Stage 3
Individual provisions or management adjustments to ECL models. For example, we consider whether
affected assets have suffered from a significant increase in credit risk (or are credit impaired) and whether
the ECL is appropriate.
Over the near-term time horizon, ING plans to continue to refine its methodologies to evaluate climate risks.
ING is working on putting into practice quantitative methodologies for climate and environmental (C&E) risk
identification, materiality assessment and risk appetite setting. Refer to ESG risk paragraph for further
details on ESG risk management. Going forward, ING aims to continue to close the gaps on climate risk data,
which will enable us to embed climate risks eventually into the IFRS 9 ECL models.
Portfolio quality (*)
The table below describes the portfolio composition over the different IFRS 9 stages and rating classes. The
Stage 1 portfolio represents 91.5% (2022: 91.5%) of the total gross carrying amounts, mainly composed of
investment grade, while Stage 2 makes up 7.4% (2022: 7.3%) and Stage 3 makes up 1.2% (2022: 1.2%) of
the total gross carrying amounts, respectively.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2, 3
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
87,071
1
439
87,510
1
2-4 (AA)
132,159
8
2,553
2
134,711
9
5-7 (A)
231,018
24
6,188
6
237,206
30
8-10 (BBB)
302,967
85
17,004
24
319,971
108
Non-Investment grade
11-13 (BB)
157,387
226
19,273
93
176,661
319
14-16 (B)
26,414
164
19,336
455
45,750
618
17 (CCC)
617
10
4,125
233
4,742
242
Performing Restructuring
18 (CC)
4,617
402
4,617
402
19 (C)
1,919
221
1,919
221
Non-performing loans
20-22 (D)
11,956
3,887
11,956
3,887
Total
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac151 billion) and other positions (\u20ac9 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac67 billion, mainly pre-settlement exposures) included in credit
outstandings but not in the gross carrying amounts.
2 Includes impact from change in accounting policy as disclosed in table Changes in gross carrying amounts and loan loss provisions.
3 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
Gross carrying amount per IFRS 9 stage and rating class (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Rating class
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross Carrying
Amount
Provisions
Gross carrying
amount
Provisions
Investment grade
1 (AAA)
100,885
2
284
101,169
2
2-4 (AA)
98,181
5
2,493
1
100,675
6
5-7 (A)
177,617
23
4,596
4
182,214
27
8-10 (BBB)
321,308
98
14,714
29
336,023
127
Non-investment grade
11-13 (BB)
155,910
277
17,365
91
173,275
368
14-16 (B)
23,649
168
19,386
471
43,035
639
17 (CCC)
7,671
8
4,572
194
12,244
202
Performing Restructuring
18 (CC)
5,198
595
5,198
595
19 (C)
2,116
293
2,116
293
Non-performing loans
20-22 (D)
11,708
3,841
11,708
3,841
Total
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (\u20ac150.1 billion) and other positions (\u20ac4.4 billion) not included in credit outstandings and non-IFRS 9 eligible assets (\u20ac116.1 billion, mainly guarantees, letters of credit and pre-
settlement exposures) included in credit outstandings but not in the gross carrying amounts.
2 IAS 37 provisions are established for non-credit replacement guarantees not in the scope of IFRS 9. Total IAS 37 provisions (\u20ac109 million) are excluded.
Changes in gross carrying amounts and loan loss provisions (*)
The table below provides a reconciliation by stage of the gross carrying amount and allowances for loans
and advances to banks and customers, including loan commitments and financial guarantees. The transfers
of financial instruments represent the impact of stage transfers upon the gross carrying/nominal amount
and associated allowance for ECL. This includes the net-remeasurement of ECL arising from stage transfers,
for example, moving from a 12-month (Stage 1) to a lifetime (Stage 2) ECL measurement basis.
The net-remeasurement line represents the changes in provisions for facilities that remain in the same
stage.
Please note the following comments with respect to the movements observed in the table below:
\u2022 The opening balance is impacted by a change in accounting policy following the adoption of IFRS 17,
more specifically for loans with death waivers that no longer meet the \u2018solely payments of principal and
interest\u2019 (SPPI) criterion (\u20ac-55 million loan loss provisions impact) which are no longer recorded at
amortised cost, and a change in policy for non-financial guarantees that are subject to contractual
indemnification rights which led to a reclassification of the existing IAS 37 provision (\u20ac109 million loan
loss provisions impact) and a remeasurement of these non-financial guarantees (\u20ac42 million loan loss
provisions impact). Reference is made to Note 1 'Basis of preparation and significant changes in the
current reporting period'.
\u2022 Stage 3 gross carrying amount increased slightly to \u20ac12.0 billion as at 31 December 2023, as new inflow
into NPL (credit impaired) in 2023 was only partly offset by repayments, derecognitions and write-offs.
Stage 3 provisions remained more or less flat at \u20ac3.9 billion.
\u2022 Stage 2 gross carrying amount increased by \u20ac0.1 billion from \u20ac75.4 billion (after changes in accounting
policies) as at 31 December 2022 to \u20ac75.5 billion as at 31 December 2023. An increase of Stage 2
exposure, driven by the implementation of an updated methodology for interest-only mortgages in the
Netherlands, was offset by outflow due to improved macro economic outlook, decrease of exposure due
to sales and repayments (including Russian exposure), forborne customers returning to Stage 1 after the
probation period has ended and other improved risk drivers. As a result, Stage 2 provisions also
decreased by \u20ac0.3 billion to \u20ac1.4 billion as of 31 December 2023.
Changes in gross carrying amounts and loan loss provisions (*)1, 2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2023
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
Impact of changes in accounting policies
37,078
9
4,704
13
158
73
41,939
95
Adjusted opening balance
922,300
590
75,429
1,692
11,866
3,914
1,009,595
6,196
Transfer into 12-month ECL (Stage 1)
11,832
28
-11,583
-239
-249
-36
-247
Transfer into lifetime ECL not credit impaired (Stage 2)
-29,470
-67
30,185
449
-716
-105
277
Transfer into lifetime ECL credit impaired (Stage 3)
-2,053
-10
-1,775
-115
3,828
978
853
Net remeasurement of loan loss provisions
-149
-94
59
-184
New financial assets originated or purchased
195,775
204
195,775
204
Financial assets that have been derecognised
-121,991
-72
-14,239
-215
-1,475
-266
-137,705
-553
Net drawdowns and repayments
-38,758
-2,525
-229
-41,511
Changes in models/risk parameters
8
10
84
102
Increase in loan loss provisions
-58
-204
714
452
Write-offs
-3
-3
-38
-38
-1,070
-1,070
-1,111
-1,111
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-12
-15
258
231
Closing balance
937,633
517
75,454
1,435
11,956
3,887
1,025,043
5,839
1 Stage 3 lifetime credit impaired provision includes \u20ac11 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac520 million of which \u20ac483 million related to IFRS 9 eligible financial assets, -\u20ac31 million related to non-credit replacement guarantees and \u20ac68 million to modification gains and losses
on restructured financial assets.
Changes in gross carrying amounts and loan loss provisions (*)1,2
in \u20ac million
12-month ECL\u00a0 (Stage 1)
Lifetime ECL not credit impaired (Stage 2)
Lifetime ECL credit impaired (Stage 3)
Total
2022
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Gross carrying
amount
Provisions
Opening balance
890,386
501
49,476
1,016
12,072
3,851
951,934
5,368
Transfer into 12-month ECL (Stage 1)
8,513
21
-8,105
-142
-408
-47
-168
Transfer into lifetime ECL not credit impaired (Stage 2)
-42,439
-76
43,222
730
-784
-90
564
Transfer into lifetime ECL credit impaired (Stage 3)
-3,524
-8
-1,216
-82
4,740
1,234
1,144
Net remeasurement of loan loss provisions
8
223
199
430
New financial assets originated or purchased
248,443
228
248,443
228
Financial assets that have been derecognised
-138,250
-70
-11,312
-94
-2,805
-215
-152,366
-379
Net drawdowns and repayments
-77,907
-1,340
21
-79,226
Changes in models/risk parameters
-8
13
25
30
Increase in loan loss provisions
95
648
1,106
1,849
Write-offs
-1
-1,129
-1,129
-1,129
-1,130
Recoveries of amounts previously written off
71
71
Foreign exchange and other movements
-15
16
-58
-57
Closing balance
885,222
581
70,725
1,679
11,708
3,841
967,655
6,101
1 Stage 3 Lifetime credit impaired provision includes \u20ac7 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to \u20ac1.861 million of which \u20ac1.850 million related to IFRS 9 eligible financial assets, -\u20ac3 million related to non-credit replacement guarantees and \u20ac14 million to modification gains and
losses on restructured financial assets.
Modification of financial assets (*)
The table below provides the following information:
\u2022 Financial assets that were modified during the year (i.e. qualified as forborne) while they had a loss
allowance measured at an amount equal to lifetime ECL.
\u2022 Financial assets that were reclassified to stage 1 during the period.
Financial assets modified (*)
in \u20ac million
2023
2022
Financial assets modified during the period
Amortised cost before modification
1,565
1,304
Net modification results
-75
-124
Financial assets modified since initial recognition
Gross carrying amount at 31 December of financial assets for which loss allowance has
changed to 12-month measurement during the period
2,599
2,382
Macroeconomic scenarios and sensitivity analysis of key sources of estimation
uncertainty (*)
Methodology (*)
Our methodology in relation to the adoption and generation of macroeconomic scenarios is described in
this section. We continue to follow this methodology in generating our probability-weighted ECL, with
consideration of alternative scenarios and management adjustments supplementing this ECL where, in
management's opinion, the consensus forecast does not fully capture the extent of recent credit or
economic events. The macroeconomic scenarios are applicable to the whole ING portfolio in the scope of
IFRS 9 ECLs.
The IFRS 9 standard, with its inherent complexities and potential impact on the carrying amounts of our
assets and liabilities, represents a key source of estimation uncertainty. In particular, ING\u2019s reportable ECL
numbers are sensitive to the forward-looking macroeconomic forecasts used as model inputs, the
probability-weights applied to each of the three scenarios, and the criteria for identifying a significant
increase in credit risk. As such, these crucial components require consultation and management judgement,
and are subject to extensive governance.
Baseline scenario (*)
As a baseline for IFRS 9, ING has adopted a market-neutral view combining consensus forecasts for
economic variables (GDP, unemployment) with market forwards (for interest rates, exchange rates and oil
prices). Input from a leading third-party service provider is used to complement the consensus with
consistent projections for variables for which there are no consensus estimates available (most notably
house prices and \u2013 for some countries - unemployment), to generate alternative scenarios, to convert
annual consensus information to a quarterly frequency and to ensure general consistency of the scenarios.
As the baseline scenario is consistent with the consensus view it can be considered as free from any bias.
The relevance and selection of macroeconomic variables is defined by the ECL models under credit risk
model governance. The scenarios are reviewed and challenged by two panels of ING experts. The first panel
consists of (economic) experts from Global Markets Research, risk and modelling, while the second panel
consists of relevant senior managers in ING.
Alternative scenarios and probability weights (*)
Two alternative scenarios are taken into account: an upside and a downside scenario. The alternative
scenarios have statistical characteristics as they are based on the forecast deviations of the leading third-
party service provider.
To understand the baseline level of uncertainty around any forecast, the leading third-party service provider
keeps track of all its deviations (so called forecast errors) of the past 20 years. The distribution of forecast
errors for GDP, unemployment, house prices and share prices is applied to the baseline forecast creating a
broad range of alternative outcomes. In addition, to understand the balance of risks facing the economy in
an unbiased way, the leading third-party service provider runs a survey with respondents from around the
world and across a broad range of industries. In this survey respondents put forward their views of key risks.
Following the survey results, the distribution of forecast errors (that is being used for determining the
scenarios) may be skewed.
For the downside scenario, ING has chosen for the 90th percentile of that distribution because this
corresponds with the way risk management earnings-at-risk is defined within the Group. The upside
scenario is represented by the 10th percentile of the distribution. The applicable percentiles of the
distribution imply a 20 percent probability for each alternative scenario. Consequently, the baseline scenario
has a 60 percent probability weighting. Please note that, given their technical nature, the downside and
upside scenarios are not based on an explicit specific narrative.
Macroeconomic scenarios applied (*)
The macroeconomic scenarios applied in the calculation of\u00a0 loan loss provisions are based on the consensus
forecasts.
Baseline assumptions (*)
The general picture that the consensus conveys is that global economic growth is going through a weak
spell. Inflation has been coming down as energy prices have moderated, demand has weakened and
pandemic-related supply problems have eased. Higher interest rates play their part in slowing demand.
Although central banks could well be done with hiking interest rates \u2013 as inflation continues to fall \u2013 the
lagged impact of past monetary tightening is still feeding through to the real economy. This is expected to
cause GDP growth to come in even weaker in 2024, but pickup thereafter as the negative effects from tight
monetary policy and high inflation fade. The high-interest rate environment is currently causing corrections
in house prices, especially in markets where prices surged during the pandemic. Housing market corrections
are assumed to gradually decrease in strength.
The December 2023 consensus expects global output (as measured by the weighted average GDP growth
rate of ING's 25 main markets) to slow from 2.6 percent in 2022, to 2.4 percent in 2023 and 1.8 percent in
2024. For 2025-2026, economic growth is expected to pick up again to 2.3 percent and 2.4 percent.
The US economy outperformed expectations in 2023, driven by strong consumer spending and fiscal
support. Still, headwinds have been building up, in part driven by the much higher interest rates currently
experienced. While an outright recession is not expected, the consensus does foresee a marked slowdown in
economic activity in the US in 2024. After this, the US economy is expected to gather strength again in
2025. The consensus expects the growth rate of the US economy to fall from 2.2 percent in 2023 to 0.9
percent in 2024 and to recover to 2 percent on average in 2025-2026.
The eurozone economy is facing broad stagnation as it deals with the impact of the war in Ukraine, energy
crisis, and higher interest rates. While inflation is coming down, the impact of last year\u2019s purchasing power
shock is still being felt. Monetary tightening works with a lag, which will still affect economic activity next
year. Overall, the eurozone economy is forecasted to have grown by just 0.5 percent in 2023, but Germany
has gone through recession reflecting its large (energy-intensive) manufacturing sector, and exposure to a
disappointing Chinese economy. For next year, the recovery is expected to be very modest as consensus
expects the eurozone to grow by only 0.8 percent in 2024, before recovering to 1.4 percent on average in
2025-2026.
Elsewhere in Europe, the outlook is mixed. In Poland, after an expected 0.4 percent growth in 2023, the
economy is expected to recover by 2.5 percent in 2024 led by household consumption growth. Wage
growth is set to remain strong while inflation has subsided substantially. The consensus expectation for
T\u00fcrkiye is to see growth slow substantially in 2024 with unemployment remaining around 10 percent for the
foreseeable future. The consensus sees economic growth in T\u00fcrkiye slowing from 3.5 percent in 2023, to 2.1
percent in 2024 and increasing again to 3.3 percent on average in 2025-2026. The Russian economy has
started to recover from the 2022 recession, but growth is set to moderate after 1.7 percent in 2023 to 1.2
percent on average in 2024-2026.
2023 was supposed to be the year of a strong reopening for China, but growth did not meet expectations.
Weak global demand for goods has resulted in a weaker than expected industrial performance and the real
estate sector continues to be a source of concern. For the 2024-2026 period, economic growth is expected
to come in at only 4.2 percent despite increased stimulus.
The global economic slowdown and tighter monetary policy continue to weigh on economic growth in
Australia. After growing by 1.7 percent in 2023, the outlook sees a growth rate of 1.3 percent for 2024 and
some pick-up to 2.4 percent and 2.5 percent for 2025-2026. Unemployment is expected to run up a little
more, from 4.1 percent in 2023 to 4.4 percent, but decrease again thereafter.
When compared to the December 2022 consensus forecast, used for the 2022 Annual Report, the December
2023 forecast assumes somewhat better economic circumstances in 2023 but weaker for 2024. The
forecast assumes to have Global GDP increased by 2.4 percent in 2023 (compared to 1.3 percent assumed
before) and is expected to grow by 1.8 percent in 2024 (2.4 percent assumed before). The upgrade for 2023
reflects the better than expected economic performance of the US and eurozone as a recession on the back
of the energy crisis was avoided, while the downgrade for 2024 reflects the impact of substantial monetary
tightening.
Alternative scenarios and risks (*)
Because of the possible consequences of geopolitical risks, uncertainty surrounding the forecasts was higher
in 2022. During 2023, the uncertainty level around the forecasts gradually decreased. To take this into
account, ING applies normal levels of dispersion in the alternative scenarios used for year-end 2023
provisioning. For year-end 2022 half-widened dispersion levels were used, by which the near-term
dispersion of the forward-looking distributions (from which the alternative scenarios are derived) was larger
than in normal times.
The baseline scenario assumes a further easing of inflation in 2024 and relatively resilient labour markets.
However, a longer period of weakness, due to even more concerning geopolitical tensions, persistent
elevated inflation and a slowdown in China could lead to a more protracted and deeper economic
slowdown. As such, the balance of risks to the baseline outlook is negative and the alternative scenarios
have a downward skew in line with the outcomes of the Global Risk Survey from a leading third-party
service provider. The downward skew remained stable compared to what has been applied for year-end
2022, continuing to reflect risks related to possible escalation of geopolitical tensions, a prolonged surge in
inflation and tightening monetary policy.
The downside scenario, though technical in nature, sees for most countries a recession in 2024.
Unemployment increases strongly in this scenario and house prices in most countries show outright falls.
The downside scenario captures a possible escalation of geopolitical tensions, a prolonged surge in inflation
and further slowing in China.
The upside scenario \u2013 while equally technical in nature \u2013 reflects the possibility of a better economic outturn
if consumers spend more of their excess savings, geopolitical risks subside and China stimulus works out
more strongly than expected.
Management adjustments applied this year (*)
In times of volatility and uncertainty where portfolio quality and the economic environment are changing
rapidly, models alone may not be able to accurately predict losses. In these cases, management
adjustments can be applied to appropriately reflect ECL. Management adjustments can also be applied
where the impact of the updated macroeconomic scenarios is over- or under-estimated by the IFRS 9
models.
ING has internal governance frameworks and controls in place to assess the appropriateness of all
management adjustments, involving first- and second lines of defence.
Management adjustments to ECL models (*)
in \u20ac million
2023
2022
Economic sector based adjustments
36
71
Inflation and interest rate increases / second-order impact adjustments
351
334
Mortgage portfolio adjustments
126
105
Other post model adjustments
64
-57
Total management adjustments
577
453
The economic sector-based adjustments of \u20ac36 million as of 31 December 2023 (\u20ac71 million as at 31
December 2022) fully relates to Business Banking clients that have benefited from Covid-19-related
government support programmes in the Netherlands. In line with 2022, it became clearer during 2023 that
the Covid-19 pandemic had less impact than expected on the number of defaults in related sectors with
relatively high tax debt to be repaid; the economic sector-based management adjustment has therefore
been partially released. The remaining management adjustment is related to sectors with relatively high tax
debt to be repaid\u00a0 and is expected to materialise with delayed effect. The \u20ac10 million adjustment on the
livestock farming sector in the Netherlands that was also included in December 2022, related to nitrogen
reduction targets has been fully released following improved risk metrics.
ING has performed further assessment for both WB and Retail Banking on the impact of second-order
effects. The second-order adjustments as at December 2022 captured a wider range of indirect effects such
as supply chain issues, staffing shortages and high energy prices. In 2023, the risks from high inflation and
rapidly increasing interest rates became more apparent compared to other indirect effects, causing a shift
in focus of this adjustment. This resulted in an overall adjustment for inflation and interest rate increases of
\u20ac351 million in total as at 31 December 2023, of which \u20ac138 million (31 December 2022: \u20ac164 million)
relates to Retail Banking segments and \u20ac213 million (31 December 2022: \u20ac170 million) to the Wholesale
Banking segment.
As the credit risk models in Retail Banking generally assume that inflation and interest rate increases risks
materialise via other risk drivers such as GDP and unemployment rates with a delay, an overlay approach
was determined. The methodology considers debt-to-income ratios and the percentage of loans that are
expected to reprice within one year to timely estimate the expected credit losses related to reduced
repayment capacity and affordability for private individuals and business clients in the Retail Banking
segment.
In Wholesale Banking, the IFRS 9 credit risk models mostly leverage on GDP growth as a generic
macroeconomic variable. High inflation and rapidly increasing interest rates however trigger economic
heterogeneity (i.e. some businesses benefit, while others suffer), as such the current circumstances are
expected to cause more defaults than normally predicted using GDP growth. A sector-based heatmap
approach was used to adjust the probability of default for clients in sectors that are expected to be
significantly impacted by high inflation and increased interest rates, including refinancing risk. The
adjustment is predominantly visible in the commercial real estate sector and reflected in Stage 1 and Stage
2.
The overall mortgage portfolio adjustment as at 31 December 2023 increased to \u20ac126 million (31 December
2022: \u20ac105 million), as an adjustment of \u20ac115 million has been recognised in 2023 following new insights
from a risk segmentation model that captures affordability, repayment and refinancing risk on performing
mortgage customers with a bullet loan in the Netherlands.
The mortgage portfolio adjustment that relates to significant increase of house prices was reduced to \u20ac11
million as at 31 December 2023, coming from \u20ac105 million as at December 2022. This decrease is reflecting
the decline in house prices in various countries, subsequent materialisation into increased model-based ECL
as well as an improved market outlook on the recovery value of residential real estate. ING still recognises a
management adjustment related to house prices in Stage 2 and Stage 3 on the mortgage portfolios in
Germany to maintain an appropriate level of ECL. The management adjustments are determined by
calculating the impact of lower house prices on loan-to-value (LTV) and loss given default (LGD).
Other post-model adjustments (PMAs) mainly relate to the impact of model redevelopment or recalibration
and periodic model assessment procedures that have not been incorporated in the ECL models yet; the
impact on total ECL can be positive or negative. These can result from both regular model maintenance and
ING\u2019s multi-year programme to update ECL models for the definition of default. These adjustments will be
removed once updates to the specific models have been implemented. The change in balance compared to
the previous reporting date is due to i) released PMAs because of model updates that have been
implemented, and ii) new PMAs recognised for new redevelopments and recalibrations.
Analysis on sensitivity (*)
The table below presents the analysis on the sensitivity of key forward-looking macroeconomic inputs used
in the ECL collective-assessment modelling process and the probability weights applied to each of the three
scenarios. The countries included in the analysis are the most significant geographic regions in ING and for
Wholesale Banking the US is the most significant in terms of both gross contribution to reportable ECL, and
sensitivity of ECL to forward-looking macroeconomics. Accordingly, ING considers these portfolios to present
the most significant risk of resulting in a material adjustment to the carrying amount of financial assets
within the next financial year. ING also observes that, in general, the WB business is more sensitive to the
impact of forward-looking macroeconomic scenarios.
The purpose of the sensitivity analysis is to enable the reader to understand the extent of the impact from
the upside and downside scenario on model-based reportable ECL.
In the table below, the real GDP is presented in percentage year-on-year change, the unemployment in
percentage of total labour force and the house price index (HPI) in percentage year-on-year change.
Sensitivity analysis as at December 2023\u00a0 (*)
2024
2025
2026
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
1.3
3.3
2.8
214
20%
310
Unemployment
3.7
3.3
3.3
HPI
10.4
11.2
4.0
Baseline scenario
Real GDP
0.8
1.6
1.5
282
60%
Unemployment
4.1
4.3
4.5
HPI
0.9
3.0
3.9
Downside scenario
Real GDP
-1.7
-1.2
0.1
487
20%
Unemployment
5.9
7.2
8.1
HPI
-10.9
-7.4
3.7
Germany
Upside scenario
Real GDP
1.4
3.1
1.6
472
20%
525
Unemployment
2.6
2.0
1.7
HPI
0.9
6.6
8.0
Baseline scenario
Real GDP
0.5
1.3
1.2
513
60%
Unemployment
3.0
3.0
3.0
HPI
-1.4
3.4
4.5
Downside scenario
Real GDP
-2.4
-1.4
0.3
615
20%
Unemployment
4.5
5.2
5.5
HPI
-6.0
-0.8
0.4
Belgium
Upside scenario
Real GDP
1.5
2.7
2.3
568
20%
619
Unemployment
5.3
5.0
4.9
HPI
1.3
5.6
4.5
Baseline scenario
Real GDP
0.9
1.5
1.8
604
60%
Unemployment
5.6
5.5
5.4
HPI
0.4
5.2
3.9
Downside scenario
Real GDP
-1.3
-0.2
1.2
713
20%
Unemployment
7.3
8.0
7.9
HPI
-2.2
3.9
2.6
United States
Upside scenario
Real GDP
1.8
3.2
3.4
102
20%
165
Unemployment
4.1
3.3
3.1
HPI
0.6
8.7
8.7
Baseline scenario
Real GDP
0.9
1.9
2.1
144
60%
Unemployment
4.5
4.5
4.4
HPI
-0.7
3.5
3.3
Downside scenario
Real GDP
-1.3
-1.4
-0.1
292
20%
Unemployment
6.6
8.2
8.8
HPI
-4.2
-2.7
-3.0
\u00b9 Excluding management adjustments.
Sensitivity analysis as at December 2022 (*)
2023
2024
2025
Un-weighted
ECL (\u20ac mln)
Probability-
weighting
Reportable
ECL (\u20ac mln)1
Netherlands
Upside scenario
Real GDP
2.2
2.3
2.9
274
20%
381
Unemployment
4.0
3.9
3.8
HPI
13.0
11.8
2.5
Baseline scenario
Real GDP
0.2
1.4
1.8
349
60%
Unemployment
4.5
4.8
4.9
HPI
3.7
3.7
2.4
Downside scenario
Real GDP
-4.2
0.7
0.9
583
20%
Unemployment
6.4
7.8
8.7
HPI
-8.0
-6.5
2.2
Germany
Upside scenario
Real GDP
1.7
2.3
1.8
606
20%
745
Unemployment
2.6
2.2
1.8
HPI
0.6
3.9
6.2
Baseline scenario
Real GDP
-0.7
1.4
1.5
726
60%
Unemployment
3.2
3.1
3.1
HPI
-1.8
0.9
2.7
Downside scenario
Real GDP
-4.8
0.1
1.0
942
20%
Unemployment
4.8
5.3
5.6
HPI
-6.2
-3.3
-1.4
Belgium
Upside scenario
Real GDP
1.7
2.1
2.1
535
20%
596
Unemployment
5.5
5.5
5.3
HPI
2.3
2.6
3.1
Baseline Scenario
Real GDP
0.0
1.6
1.8
584
60%
Unemployment
6.1
6.3
6.1
HPI
1.4
2.2
2.5
Downside scenario
Real GDP
-3.2
1.0
1.5
692
20%
Unemployment
7.5
8.5
8.4
HPI
-1.2
0.9
1.2
United States
Upside scenario
Real GDP
3.0
1.5
3.4
100
20%
221
Unemployment
3.4
2.8
2.5
HPI
3.7
7.4
8.1
Baseline Scenario
Real GDP
0.2
1.1
2.3
188
60%
Unemployment
4.3
4.4
3.9
HPI
2.5
2.2
2.8
Downside scenario
Real GDP
-4.1
0.2
0.6
442
20%
Unemployment
6.4
7.7
8.2
HPI
-1.2
-3.8
-3.5
\u00b9 Excluding management adjustments.
When compared to the sensitivity analysis of 2022, the macroeconomic inputs for 2023 are somewhat
more favourable and for 2024 less favourable as the lagged impact of monetary tightening is still feeding
through to the real economy. The sensitivities for 2022 contain half-widened dispersion around the upside
and downside scenarios, whereas half-widened dispersion was removed for these scenarios for the 2023
sensitivity analysis following a continued decrease in forecast uncertainty.
On a total ING level, the unweighted model ECL for all collective provisioned clients in the upside scenario
was \u20ac2,510 million, in the baseline scenario \u20ac2,802 million, and in the downside scenario \u20ac3,668 million. This
reconciles as follows to the reported ECLs:
Reconciliation of reportable collective ECL to total ECL (*)
in \u20ac million
2023
2022
Total reportable collective provisions
2,856
3,209
ECL from individually assessed impairments
2,406
2,439
ECL from management adjustments
577
453
Total ECL
5,839
6,101
Criteria for identifying a significant increase in credit risk (SICR) (*)
All assets and off-balance-sheet items that are in scope of IFRS 9 impairment and which are subject to
collective ECL assessment are allocated a 12-month ECL if deemed to belong in Stage 1, or a lifetime ECL if
deemed to belong in Stages 2 or 3. An asset belongs in Stage 2 if it is considered to have experienced a
significant increase in credit risk since initial origination or purchase. ING considers the credit risk of an asset
to have significantly increased when either a threshold for absolute change in lifetime probability of default
(PD) or a relative change in lifetime PD is reached.
It should be noted that the lifetime PD thresholds are not the only drivers of stage allocation. An asset can
also change stages as a result of other triggers, such as having over 30 days arrears, being on a watch list or
being forborne. Refer to section 1.5.6 of Note 1 \u2018Basis of preparation and significant accounting policies\u2019 for
an exhaustive list. Furthermore, this analysis is rudimentary in the sense that other parameters would
change when an asset changes stages.
Absolute lifetime PD threshold
The absolute threshold is a fixed value calibrated per portfolio/segment and provides a fixed threshold that,
if exceeded by the difference between lifetime PD at reporting date and lifetime PD at origination, triggers
Stage 2 classification. The expert-based thresholds for the absolute change in lifetime PD vary between
75bps for Retail portfolios, 100bps for WB and 250bps for SMEs, based on the characteristics of the specific
portfolio. ING is in the process of refining the thresholds on a portfolio level. These have already been
implemented for part of the portfolio, resulting in calibrated instead of expert-based absolute lifetime PD
thresholds.
Relative lifetime PD threshold
The relative threshold defines a relative increase of the lifetime PD beyond which a given facility is classified
in Stage 2 because of significant increase in credit risk. The relative threshold is dependent on the individual
PD assigned to each facility at the moment of origination and a scaling factor calibrated in the model
development phase that is optimised depending on the observed default rates and overall average riskiness
of the portfolio. While the scaling factor is associated with a whole portfolio/segment, the PD at origination
is facility-specific and, in this sense, the relative threshold may differ facility by facility.
Ultimately the relative threshold provides a criterion to assess whether the ratio (i.e. increase) between
lifetime PD at reporting date and lifetime PD at origination date is deemed a significant increase in credit
risk. If the threshold is breached, SICR is identified and Stage 2 is assigned to the given facility.
The threshold for the relative change in lifetime PD is inversely correlated with the PD at origination; the
higher the PD at origination, the lower the threshold. The logic behind this is to allow facilities originated in
very favourable ratings to downgrade for longer without the need of a Stage 2 classification. In fact, it is
likely that such facilities will still be in favourable ratings even after a downgrade of a few notches. On the
contrary, facilities originated in already unfavourable ratings grades are riskier and even a single-notch
downgrade might represent a significant increase in credit risk and thus a tighter threshold will be in place.
Still, the relative threshold is relatively sensitive for investment grade assets while the absolute threshold
primarily affects non-investment grade assets.
Average threshold ratio
In the table below the average increase in PD at origination needed to be classified in Stage 2 is reported,
taking into account the PD at origination of the facilities included in each combination of asset class and
rating quality. In terms of rating quality, assets are divided into 'investment grade' and 'non-investment
grade' facilities. Rating 18 and 19 are not included in the table since facilities are not originated in these
ratings and they constitute a staging trigger of their own (i.e. if a facility is ever to reach rating 18 or 19 at
reporting date, it is classified in Stage 2). In the table, values are weighted by IFRS 9 exposure and shown for
both year-end 2022 and year-end 2023.
To represent the thresholds as a ratio (i.e. how much should the PD at origination increase in relative terms
to trigger Stage 2 classification) the absolute threshold is recalculated as a relative threshold for disclosure
purposes. Since breaching only relative or absolute threshold triggers Stage 2 classification, the minimum
between the relative and recalculated absolute threshold is taken as value of reference for each facility.
Quantitative SICR thresholds (*)
2023
2022
Average threshold ratio
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Investment
grade (rating
grade 1-10)
Non-investment
grade (rating
grade 11-17)
Asset class category
Mortgages
2.5
2.3
2.7
2.3
Consumer lending
2.9
2.1
2.8
1.8
Business lending
2.7
2.1
2.8
2.1
Governments and financial institutions
3.0
1.9
3.0
1.9
Other Wholesale Banking
2.8
1.8
2.8
1.9
As it is apparent from the disclosures above, as per ING\u2019s methodology, the threshold is tighter the higher
the riskiness at origination of the assets, illustrated by the difference between the average threshold applied
to investment grade facilities and non-investment grade facilities.
Sensitivity of ECL to PD lifetime PD thresholds
The setting of PD threshold bands requires management judgement and is a key source of estimation
uncertainty. On Group level, the total model ECL on performing assets, which is the ECL collective-
assessment without taking management adjustments into account, is \u20ac1,412 million. To demonstrate the
sensitivity of the ECL to these PD thresholds bands, hypothetically solely applying the upside scenario would
result in total model ECL on performing assets of \u20ac1,054 million and a decrease in the Stage 2 ratio by -0.5
percentage point, while solely applying the downside scenario in our models would result in total model ECL
on performing assets of \u20ac2,290 million and an increase in the Stage 2 ratio by 3.8 percentage-point.", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-5": { "value": "
Market risk
Introduction (*)
Market risk is the risk that movements in market variables, such as interest rates, equity prices, foreign
exchange rates, credit spreads and real estate prices negatively impact the bank\u2019s earnings, capital, market
value or liquidity position. Market risk either arises through positions in banking books or trading books. The
banking book positions are intended to be held for the long term (or until maturity) or for the purpose of
hedging other banking book positions. The trading book positions are typically held with the intention of
short-term trading or to hedge other positions in the trading book. This means that financial instruments in
the trading books should be free of trade restrictions. Policies and processes are in place to monitor the
inclusion of positions in either the trading or banking book as well as to monitor the transfer of risk between
the trading and banking books.
ING recognises the importance of sound market risk management and bases its market risk management
framework on the need to identify, assess, control and manage market risks. The approach consists of five
recurring activities: risk identification, risk assessment, risk control, risk monitoring and risk reporting.
Governance (*)
A governance framework has been established defining specific roles and responsibilities of business
management units, market risk management units, and internal approval bodies per activity.
Supervision of market risk falls under the responsibility of the EB/MBB and is delegated to the ALCO function,
where ALCO Bank is the highest approval authority and sets the market risk appetite. ALCO Bank monitors
ING\u2019s adherence to the risk appetite for market risk and sets additional limits where appropriate. These limits
are cascaded through the organisation through lower level ALCOs. This ALCO structure facilitates top-down
risk management, limit setting, limit monitoring and control of market risk.\u00a0
FR maintains a limit framework in line with ING\u2019s Risk Appetite Framework. The businesses are responsible
for adhering to the limits which are reviewed on an annual basis and are ultimately approved by the ALCO
Bank. Limit excesses are reported to senior management in line with the ALM Risk Appetite Statement
Setting procedure and Market Risk in the Trading Book Framework, upon which the business needs to act
accordingly. To adhere to the established limit framework, ING implements hedging and risk mitigation
strategies that range from the use of traditional market instruments, such as interest rate swaps, to more
sophisticated hedging strategies.
The organisational structure facilitates top-down risk management by recognising that risk taking and risk
management occur to a large extent at the regional/local level. Bottom-up reporting from regional/local
units to head office units allows each management level to assess the market risks relevant at the
respective levels.
Several committees govern communication between the parties involved in market risk management:
\u2022 The Market Risk Model Committee (MRMC), is the dedicated authority for the approval of all funding &
liquidity risk, market risk (includes banking and trading risk), counterparty credit risk and business risk
models and parameters for ING Bank within its mandate delegated by ALCO Bank.
\u2022 The Valuation Model Committee approves pricing models for trading and banking books.
Financial Risk provides risk reporting to the EB and MBB, the ALCO Bank and the senior executive
management of related business functions.
The following sections elaborate on the various elements of the risk management framework for:
\u2022 Market risk economic capital;
\u2022 Market risk in banking books;
\u2022 Market risk in trading books.
Market risk in banking books (*)
ING makes a distinction between the trading and banking (non-trading) books. Positions in banking books
originate from the market risks inherent in commercial products that are sold to clients, Group Treasury
exposures, and from the investment of our own funds (core capital). Both the commercial products and the
products used to hedge related market risk exposures are intended to be held until maturity, or at least for
the long term.
Risk transfer (*)
Market risks in the banking book are managed via the risk transfer process. In this process the interest rate,
FX, funding and liquidity risks are transferred from the commercial books through matched funding or
replication to Group Treasury, where centrally managed. The scheme below presents the transfer and
management process of market risks in the banking books.
Risk measurement (*)
The main concepts and metrics used for measuring market risk in the banking book are described below per
risk type.
Interest rate risk in banking book (*)
Interest rate risk in the banking book is defined as the exposure of a bank\u2019s earnings, capital, and market
value to adverse movements in interest rates originated from positions in the banking book.
Governance (*)
The management of interest rate risk follows the Interest Rate Risk in the Banking Book (IRRBB) framework
as approved by ALCO Bank. This framework describes roles, responsibilities, risk metrics, and the policies and
procedures related to interest rate risk management. Furthermore, ALCO Bank reviews and sets the risk
appetite for interest rate risk on an annual basis. The risk appetite is translated into limits for the interest
rate risk metrics.
As a result of this framework, ING centralises interest rate risk management from commercial books (that
capture the products sold to clients) to globally managed interest rate risk books. This enables a clear
demarcation between commercial business results and results based on unhedged interest rate positions.
ING distinguishes between three types of activities that generate interest rate risk in the banking book:
\u2022 Investment of own funds;
\u2022 Commercial business;
\u2022 Group Treasury exposures including strategic interest rate positions.
Group Treasury is responsible for managing the investment of own funds (core capital). Capital is invested
for longer periods to contribute to stable earnings within the risk appetite boundaries set by ALCO Bank. The
main objective is to maximise the economic value of the capital investment book while having stable
earnings.
Commercial activities can result in linear interest rate risk, for example, tenors and duration of new
production and re-pricing of assets differ from those of liabilities. Also, interest rate risk can arise from
customer behaviour and/or convexity risk, depending on the nature of the underlying product
characteristics.
Customer behaviour risk is defined as the potential future (value) loss due to deviations in the actual
behaviour of clients versus the modelled behaviour with respect to the embedded options in commercial
products. General sources of customer behaviour risk, among other things, include the state of the
economy, competition, changes in regulation, legislation and tax regime, developments in the housing
market and interest rate developments.
From an interest rate risk perspective, commercial activities can typically be divided into the following main
product types: savings and current accounts (funds entrusted), demand deposits, mortgages and loans.
Savings and demand deposits are generally invested in such a way that both the value is hedged and the
sensitivity of the margin to market interest rates is minimised. The contractual nature of investments
(assets) implies that the adjustment to market rates (repricing of assets) is not immediate, therefore the
interest rate risk can arise with either positive or negative impact on the income. Interest rate risk is
modelled based on the stability of deposits and the pass-through rate. This takes account of different
elements, such as pricing strategies, volume developments and the level and shape of the yield curve.
Savings volumes are typically assumed to be relatively stable and less sensitive to rate changes.
Interest rate risk for mortgages arises due to prepayment or other embedded optionalities. In modelling this
risk, both interest-rate-dependent pre-payments and constant prepayments, are considered. Next to a
dependence on interest rates, modelled prepayments may include other effects such as loan-to-value,
seasonality and the reset date of the loan. In addition, the interest sensitivity of embedded offered rate
options may be considered.\u00a0
Wholesale Banking loans typically do not experience interest-rate-dependent prepayment behaviour. These
portfolios are match-funded taking the constant prepayment model into account and typically do not
contain significant convexity risk. Wholesale Banking loans can have an all-in rate floor or a floor on a
reference rate.
Customer behaviour in relation to mortgages, loans, savings and demand deposits is modelled, based on
extensive research. However, the substantial change in the interest rate environment makes extensive
research more challenging than before and may increase model risk. Models are backtested and updated
when deemed necessary in an annual procedure. Model parameters and the resulting risk measures are
approved by (local) ALCO and are closely monitored on a monthly basis.
Linear risk transfers take place from commercial business books to the treasury book (Group Treasury), if
necessary, by using estimations of customer behaviour. The originating commercial business is ultimately
responsible for estimating customer behaviour, leaving convexity risk and (unexpected) customer behaviour
risk with the commercial business. Risk measurement and the risk transfer process take place at least
monthly. However, if deemed necessary, additional risk transfers can take place.
The commercial business manages the convexity risk that is the result of products that contain embedded
options, like mortgages. Here the convexity risk is defined as the optionality effects in the value due to
interest rate changes, excluding the first-order effects. In some cases, convexity risk is transferred from the
commercial books to treasury books using cap/floor contracts and swaptions.
In the following sections, the interest rate risk exposures in the banking books are presented. ING quantifies
risk measures from both earnings and value perspectives. Net interest income (NII)-at-Risk is used to provide
the earnings perspective and the net present value (NPV)-at-Risk figures provide the value perspective.
Please note that the interest rate risk that stems from the commercial business is assumed to be linearly
hedged but no additional corrective management actions are taken into account in the NPV-at-Risk
measure. In the NII-at-Risk measure, a more dynamic hedging process is taken into account.
During 2023, the following activities related to the risk measurement for IRRBB were performed:
\u2022 Annual review of the risk appetite for market risks in the banking book including further enhancements;
\u2022 Further assessment and development of sub-risk types, such as tenor basis risk, vega optionality risk and
client behaviour risk;
\u2022 Set up of standardised risk measurement related to global crisis risk;
\u2022 Annual review of the interest rates scenarios used for calculating NII-at-Risk and NPV-at-Risk;
\u2022 Annual savings/current account model updates;
\u2022 Annual update of parameters of prepayment models for market developments;
\u2022 Further enhancement of the IRRBB framework in relation to upcoming regulatory requirements (e.g.
anticipation on implementation and measurement of the upcoming regulatory metric NII SOT,
development of additional requirements coming forward from latest EBA guidelines);
\u2022 Further strengthening of customer behaviour risk and model risk frameworks
Net interest income (NII) at Risk (*)
The NII-at-Risk measures the impact of changing interest rates on the forecasted net interest income
(before tax) of the banking book, excluding the impacts of credit spread sensitivity, fees and fair value
impact. Future projected balance sheet developments are included in this risk metric. NII-at-Risk is a metric
that helps provide insight as to what extent ING's NII under alternative interest rates developments deviates
from what was assumed in our dynamic plan projections.
In its risk management, ING monitors the NII-at-Risk under a three-year timeframe. Interest rates are
stressed during the first year versus the prevailing curve, taking gradual changes over the first year. The rate
changes considered comprise both upward and downward scenarios, as well as parallel (equal movements
across the yield curve) and non-parallel scenarios.
The impact of changing interest rates on ING\u2019s NII is predominantly caused by the following factors:
\u2022 Change in returns of (re-)investments of client deposits;
\u2022 Change in client deposit rates (mainly savings), (partially) tracking changes in market interest rates;
\u2022 Change in the amortization profile of mortgages, due to an increase or decrease in expected
prepayments;
\u2022 Higher/lower returns of (re-)investments of capital investment;
\u2022 Open interest rate positions, leading to changes in return because of different market rates;
\u2022 Assumed volume development of the balance sheet in line with ING's dynamic plan.
For projecting the change in client deposit rates, ING uses a client rate model that describes the relation to
market interest rates and client deposit rates. The model is calibrated under a range of interest rate
scenarios. Per scenario the actual change in client deposit rates may deviate from this calibrated model. The
actual NII development of customer deposits may, indeed, differ from the provided scenarios, depending on,
amongst others, actual interest rate and savings client rate evolution, as well as changes to ING\u2019s balance
sheet composition such as net deposit growth and relative share of savings deposits and non-remunerated
current accounts.
The NII-at-Risk figures in the table below reflect a parallel, linear interest rate movement during a year
('ramped') under the assumption of balance sheet developments in line with the ING's dynamic plan with a
time horizon of one year. The majority of the risk comes from fixed-rate positions, most notably non-
remunerated current accounts and variable-rate savings accounts.
The NII-at-Risk is primarily driven by the difference in sensitivity of client liabilities, mainly savings, versus
the sensitivity of client assets and investments to rate changes. The investment of own funds only impacts
the earnings sensitivity marginally, as only a relatively small part has to be (re)invested within the one-year
horizon.
NII-at-Risk banking book per currency - year one (*)
in \u20ac million
2023
2022
Ramped, unfloored
Ramped, unfloored
parallel \u25bc
parallel \u25b2
parallel \u25bc
parallel \u25b2
By currency
Euro
-165
155
-119
114
US dollar
-12
12
-1
2
Other
-62
69
-23
27
Total
-239
236
-142
142
EUR ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-120bps)
The change in NII under a declining and upward interest rate scenarios may not be equal. This is due to
different expected reactions in prepayment behaviour of mortgages and different pricing developments of
commercial loans and deposits products (mainly savings). This is caused by embedded options, explicit or
implicit pricing floors and other (assumed) pricing factors.
Year-on-year variance analysis (*)
In our customer deposit composition current accounts decreased and term deposits increased. Over 2023
the one-year asset repricing versus liability repricing increased, leading to a higher NII-at-Risk.
In 2023 central banks tightened monetary conditions, a continuation of a trend started in 2022 to counter
high inflation. The interest rates, however, stabilised in the second half of the year as inflation started to
ease. ING applied a dynamic hedging process, by which interest rate risk was transferred from the business
to Group Treasury and subsequently hedged in the markets. This process mitigates interest rate risk
resulting in a lower sensitivity for rate changes of ING's NII. However, the main drivers of a potential change
of NII sensitivity are balance sheet developments, specifically relating to mortgages, loans and savings. In
the eurozone, mortgage production was impacted by an increase in interest rates. Next to the impact on
new production, the prepayment incentive generally decreased due to the increase in interest rates. The
funds entrusted volume did not change significantly. The impact of explicit and implicit floors on both rates
of client assets and savings phased out in the course of the year on the back of the interest rate increases.
Pre-existing hedges, as executed by Group Treasury, were also adjusted continuously throughout the year
to hedge any interest rate risk coming from higher interest rates. Furthermore, ING\u2019s investment of own
funds took place against a lower duration reducing sensitivity. Excluding Model Risk, the total NII-at-Risk
remains relatively limited in comparison to ING\u2019s total interest income.
Net Present Value (NPV) at Risk (*)
NPV-at-Risk measures the impact of changing interest rates on the value of the positions in the banking
book. The NPV-at-Risk is defined as the outcome of an instantaneous increase or decrease in interest rates
from applying currency-specific scenarios. The NPV-at-Risk asymmetry between the downward and upward
shock is mainly caused by convexity risk in the mortgage and savings portfolio.
The full value impact cannot be directly linked to the financial position or profit or loss account, as fair value
movements in banking books are not necessarily reported through the profit or loss account or through
other comprehensive income (OCI). The changes in value are expected to materialise over time in the profit
and loss account if interest rates develop according to forward rates throughout the remaining maturity of
the portfolio. The majority of the risk comes from the investments of own funds and from positions
exhibiting negative convexity due to embedded optionality (most notably variable rate savings rate and
fixed rate mortgages).
NPV-at-Risk banking books per currency (*)
in \u20ac million
2023
2022
unfloored
unfloored
parallel \u25bc
parallel \u25b2
parallel \u25bc
parallel \u25b2
By currency
Euro
-291
-645
392
-926
US dollar
186
-178
137
-147
Other
131
-146
66
-79
Total
27
-969
594
-1,153
EUR ramped (unfloored) is at +/- 110bps (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps (2022: +/-120bps)
Year-on-year variance analysis (*)
The overall NPV sensitivity remained limited in 2023, reflecting of proper risk transfer and hedging process.
The worst case scenario, parallel up, remained relatively unchanged. Most of the year-to-year move is
coming from mortgages, partly offset by savings and derivatives from hedging activities.
IBOR transition (*)
In line with the recommendations of the Financial Stability Board, a fundamental review of important
interest rates benchmarks has been undertaken. Some interest benchmarks have been reformed, while
others have or will be replaced by risk-free rates (RFR) and discontinued. USD LIBOR in its current form
ceased on 30 June 2023, whereas the cessation of GBP, CHF, JPY, and EUR LIBOR rates occurred on 31
December 2021.
To support these changes, the financial sector has issued several guidance papers and other initiatives to
help phase the transition.
To facilitate the transition away from USD LIBOR, for new USD contracts, ING started using the
recommended alternative rates based on SOFR in 2022. Also, during 2022 and 2023, ING sought to ensure
that existing loan and derivative contracts were either transitioned to alternative rates or transition
arrangements agreed, such as taking steps to ensure a large portion of the derivative portfolio was covered
by ISDA fallbacks. Despite extensive and timely communication on the desirability of fully agreeing
transition arrangements before 30 June 2023, some clients have agreed to complete the required work
before the first interest reset date after cessation. A limited number of clients in restructuring or those
subject to sanctions need to rely on existing fallback language or synthetic LIBOR.
Due to the discontinuation of this important rate, ING, its customers, and the financial services industry have
faced and continue to face a number of risks. These risks include legal, financial, operational, reputational
and conduct risk. Legal risks are related to any required changes to existing transactions. Financial risks may
arise due to declining liquidity and may impact a contract directly or the ability to hedge the risks in that
contract. Operational risks arise due to the requirement to adapt IT systems, trade reporting infrastructure
and operational processes. Conduct risk also plays a role, as renegotiation of loan contracts requires active
engagement from all parties to a contract and may lead to negotiations concentrated in a period close to
actual cessation. ING continues to work with the very limited number of clients that are yet to complete the
USD LIBOR transition.
The progress of the IBOR transitioning between 2018 and 2023 was tracked in the global ING IBOR
programme, governed by business line steering committees, which reported to a central IBOR steering
committee. The programme coordinated the actions necessary to manage the required changes to internal
processes and systems, including pricing, risk management, legal documentation, hedge arrangements, as
well as the impact on customers. The limited amount of remaining USD LIBOR contracts continues to be
monitored within the commercial business lines following the closure of the bank-wide IBOR programme in
November 2023. The ING Benchmark Committee continues to monitor market developments and reform
plans for other rates, to anticipate the impact on any related risks.
One such development concerns the plans published by the Polish National Working Group, which advises
the market to be ready for a cessation of WIBOR and WIBID reference rates at the end of 2027 (originally
expected in 2025, but in the last quarter of 2023 the cessation date was postponed to the end of 2027) with
the offering of financial products using the new benchmark (Warsaw Interest Rate Overnight or WIRON) to
progress gradually and no new products using WIBOR and WIBID beyond 1 July 2024. The WIBOR rates are
used in several of our lending and derivative products, and hence a project team has been established to
manage the transition. WIBOR transition is especially important for our Polish subsidiary ING Bank Slaski S.A.
with a significant amount of Polish zloty-denominated assets and liabilities including derivatives that are
continuously rebalanced to hedge the risk exposures.
The tables below summarise the approximate gross exposures of ING that have yet to transition related to
USD LIBOR and WIBOR. For WIBOR, as of 31 December 2023, they exclude exposures expiring before the
transition date 31 December 2027 and of 31 December 2022 they exclude exposures expiring before the
previously expected transition date 1 January 2025. Therefore, WIBOR exposures are not directly
comparable between 31 December 2023 and 31 December 2022 as a consequence of the recent
developments in the Polish National Working Group.
Non-derivative financial instruments to transition to alternative benchmarks (*)
in \u20ac million at 31 December 2023
Financial assets non-
derivative
Financial liabilities\u00a0
non-derivative
Off balance sheet
commitments
Carrying value
Carrying value
Nominal value
By benchmark rate
USD LIBOR
915
16
9
WIBOR
18,064
1,021
Total
18,979
16
1,030
Non-derivative financial instruments to transition to alternative benchmarks (*)
in \u20ac million at 31 December 2022
Financial assets non-
derivative
Financial liabilities\u00a0
non-derivative
Off balance sheet
commitments
Carrying value
Carrying value
Nominal value
By benchmark rate
USD LIBOR
30,040
1,637
7,644
WIBOR
22,154
1,411
Total
52,194
1,637
9,055
The total of non-derivative financial assets linked to USD LIBOR is reduced from \u20ac30,040\u00a0million on 31
December 2022 to \u20ac915\u00a0million on 31 December 2023. The majority of the non-derivative financial assets
exposure on 31 December 2023 are related to contracts using synthetic USD LIBOR up until the transition to
SOFR is complete during 2024. In addition, ING reduced its committed undrawn credit facilities linked to USD
LIBOR from \u20ac7,644\u00a0million on 31 December 2022 to \u20ac9\u00a0million on 31 December 2023. The total of non-
derivative financial liabilities linked to USD LIBOR is reduced from \u20ac1,637\u00a0million on 31 December 2022 to
\u20ac16\u00a0million on 31 December 2023. The remaining non-derivative financial instruments linked to USD LIBOR
are expected to transition before the next interest rate reset date. Therefore, the remaining exposure to USD
LIBOR is expected to reduce further during the first half of 2024.
Derivative financial instruments to transition to alternative benchmarks (*)
31 December 2023
31 December 2022
in \u20ac million
Nominal value
Nominal value
By benchmark rate1
USD LIBOR
151
495,318
WIBOR
77,238
136,318
Total
77,388
631,636
1 For cross-currency swaps all legs of the swap are included that are linked to a main IBOR that is significant to ING.
In addition to the amounts in the table above, ING transitioned the interest rate swaptions that referred to
the USD LIBOR ICE swap rate (nominal value on 31 December 2022: \u20ac10,810\u00a0million). The transition of these
contracts was in general governed by a specific ISDA protocol.
Derivative financial instruments linked to USD LIBOR were reduced from \u20ac495,318\u00a0million on 31 December
2022 to only \u20ac151\u00a0million on 31 December 2023. The majority of derivatives linked to USD LIBOR rates were
transacted with clearing houses and transitioned through a standardised exercise during the second quarter
of 2023. For non-centrally cleared derivatives, the main transition occurred using the ISDA IBOR fallback
arrangements. The majority of the remaining derivative financial instruments linked to USD LIBOR are
related to contracts using synthetic USD LIBOR and linked to non-derivative financial assets that are
expected to transition before the next interest rate reset date during 2024. Therefore, a steady reduction of
these last few USD LIBOR contracts is expected during the first half of 2024.
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project:
\u2022 Phase 1 addresses those issues that affect financial reporting before the replacement of an existing
benchmark. This allows ING to apply a set of temporary exceptions to continue hedge accounting even
when there is uncertainty about contractual cash flows arising from the reform. Under these temporary
exceptions, interbank offered rates are assumed to continue unaltered for the purposes of hedge
accounting until such time as the uncertainty is resolved.
\u2022 Phase 2 focuses on issues that may affect financial reporting when the existing benchmark rate is
reformed or replaced. Phase 2 amendments to IFRS relate mainly to accounting for changes in the basis for
determining the contractual cash flows of financial assets and liabilities due to the IBOR reform and impact
on hedge accounting when an existing benchmark rate is reformed or replaced with an alternative risk-free
rate.
Specifically, Phase 2 amendments require that the effective interest rate on debt financial instruments is
adjusted, and hedge accounting continues on transition to risk free rates, but only to the extent that the
modifications made to financial instruments are those necessary to implement the IBOR reform and that
the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. By applying these
mandatory amendments, ING Group avoids recognising modification gains and losses on debt instruments
that would otherwise be required in the absence of Phase 2 amendments (changes to debt instruments
resulting from IBOR reform are treated as a reset to the instrument\u2019s variable interest rate). In addition, ING
Group avoids hedge accounting discontinuations when modifying both hedged items and hedging
instruments (and related hedge documentation) as a consequence of IBOR reform that would otherwise be
required in the absence of Phase 2 amendments.\u00a0
As explained above, Phase 1 and Phase 2 IBOR amendments to IFRS, amongst other changes, provide
specific hedge accounting reliefs that allow hedge accounting relationships to continue when IBOR Reform is
ongoing. Phase 1 reliefs cease to apply when uncertainty arising from IBOR reform is no longer present with
respect to the timing and amount of the IBOR-based cash flows of the relevant instruments. It is ING Group\u2019s
policy to cease to apply Phase 1 reliefs when the applicable contract (either hedging instrument or hedged
item) is actually modified. As a result, for these hedge accounting relationships the applicable Phase 1 reliefs
ceased to apply and Phase 2 became applicable. Refer to section 1.5.4 of Note 1 \u2018Basis of preparation and
material accounting policy information\u2019 for more information on the Phase 1 and Phase 2 amendments.
Furthermore, hedging relationships are being amended to incorporate the new benchmark rates. During
2023, ING focused on USD LIBOR contracts and all hedging relationships have been amended to incorporate
the new benchmark rates and do no longer reference USD LIBOR rates.
On 31 December 2023, Phase 1 reliefs are applicable to WIBOR indexed fair value and cash flow hedge
accounting relationships as there is uncertainty arising from the WIBOR reform with respect to the timing
and the amount of the underlying cash flows that the Group is exposed to. Therefore, for WIBOR financial
instruments designated in hedge accounting the applicable Phase 1 reliefs will continue to apply until the
relevant contract is modified. At that point in time, Phase 2 reliefs will become applicable. For these affected
fair value and cash flow hedge relationships ING assumes that the WIBOR based cash flows from the
hedging instrument and hedged item will remain unaffected.
The same assumption is used to assess the likelihood of occurrence of the forecast transactions that are
subject to cash flow hedges. The hedged cash flows in cash flow hedges directly impacted by the WIBOR
reform still meet the highly probable requirement, assuming the WIBOR benchmark on which the hedged
cash flows are based is not altered as a result of the reform.
The total gross notional amounts of hedging instruments that are used in the ING's hedge accounting
relationships for which the Phase 1 amendments to IAS39 were applied are:
Notional amounts of Hedging instruments (*)
31 December 2023
31 December 2022
in \u20ac million
Nominal value
Nominal value
By benchmark rate
USD LIBOR
28,316
WIBOR
89,338
57,774
As at 31 December 2023, all USD LIBOR hedging relationships have been amended to incorporate the new
benchmark rates and do no longer reference USD LIBOR rates. At 31 December 2022 approximately 89% of
the notional amounts for USD LIBOR had a maturity date beyond the transition date 30 June 2023.
Approximately 29% of the notional amounts for WIBOR have a maturity date beyond the new transition
date 31 December 2027. At 31 December 2022, approximately 71% of the notional amounts for WIBOR had
a maturity date beyond the previously expected transition date of 1 January 2025. The WIBOR amounts are
not directly comparable between 31 December 2023 and 31 December 2022 as a consequence of the
recent postponement of the cessation of WIBOR by the Polish National Working Group.
The notional amounts of the derivative hedging instruments provide a close approximation of the extent of
the risk exposure ING manages through these hedging relationships.
Credit spread risk in banking books (*)
Credit spread risk is defined as risk driven by the changes of the market price for credit risk, for liquidity and
potentially other characteristics of credit-risky instruments, which is not captured by another existing
prudential framework such as IRRBB or by expected credit/(jump-to-) default risk.
Foreign exchange (FX) risk in banking books (*)
FX exposures in banking books result from core banking business activities (business units doing business in
currencies other than their base currency), foreign currency investments in subsidiaries (including realised
net profit and loss), and strategic equity stakes in foreign currencies. The policy regarding these exposures is
briefly explained below.
Governance \u2013 Core banking business (*)
Every business unit hedges the FX risk resulting from core banking business activities into its base currency
to prevent volatility in profit and loss. Consequently, assets and liabilities are matched in terms of currency,
within certain friction limits.
Governance \u2013 FX translation result (*)
ING\u2019s strategy is to protect the CET1 ratio against adverse impact from FX rate fluctuations, while limiting
the volatility in the profit and loss account due to this CET1 hedging and limiting the RWA impact under the
regulatory framework. Hedge accounting is applied to the largest extent possible. Taking this into account,
the CET1 ratio hedge can be achieved by deliberately taking foreign currency positions equal to certain
target positions, such that the CET1 capital and risk-weighted assets are equally sensitive in relative terms
to changing FX rates.
Risk profile \u2013 FX translation result (*)
The following table presents the currency exposures in the banking books for the most important currencies
for the FX translation result. Positive figures indicate long positions in the respective currency. As a result of
the strategy to hedge the CET1 ratio an open structural FX exposure exists.
To measure the volatility of the CET1 ratio from FX rate fluctuations, different metrics are used including the
CET1 Ratio-at-Risk. The impact is controlled via the Solvency and Market Risk Banking Book RAS.
Foreign currency exposures banking books (*)
in \u20ac million
Foreign Investments
Hedges
Net exposures
2023
2022
2023
2022
2023
2022
US Dollar
10,337
10,470
-3,416
-2,376
6,921
8,093
Pound Sterling
1,659
1,364
-156
-58
1,503
1,306
Polish Zloty
3,976
2,714
-1,254
-321
2,722
2,393
Australian Dollar
3,620
3,781
-2,273
-2,673
1,346
1,108
Turkish Lira
517
750
0
0
517
750
Chinese Yuan
1,815
1,871
-348
0
1,466
1,871
Russian Rouble
375
391
0
0
375
392
Romanian Leu
895
860
-134
-154
761
706
Thai Baht
1,128
1,109
-697
-699
431
410
Other currency
3,704
3,771
-2,897
-2,908
806
863
Total
28,024
27,081
-11,175
-9,189
16,849
17,892
*The FX sensitivity is expressed as the FX spot equivalent position.
Equity price risk in banking books (*)
Governance (*)
ING maintains a portfolio with substantial equity exposure in its banking books. Local offices are responsible
for the management of the equity investment positions. Financial Risk is responsible for monitoring the
regulatory capital for equity investments on a monthly basis and acts independently from ING/local
management when monitoring these positions.
Risk profile (*)
Equity price risk arises from the possibility that an equity security\u2019s price will fluctuate, affecting the values
of the equity security itself as well as other instruments whose values react similarly to the particular
security, a defined basket of securities, or a securities index. ING\u2019s equity exposure mainly consists of the
investments in associates and joint ventures of \u20ac1,509 million (2022: \u20ac1,500 million) and equity securities
held at fair value through other comprehensive income (FVOCI) of \u20ac1,885 million (2022: \u20ac1,887 million). The
value of equity securities held at FVOCI is directly linked to equity security prices with increases/decreases
being recognised in the revaluation reserve. Investments in associates and joint ventures are measured in
accordance with the equity method of accounting and the balance sheet value is therefore not directly
linked to equity security prices. The equity sensitivity is expressed as the equity position.
Year-on-year variance analysis (*)
In 2023, the revaluation reserve equity securities decreased by \u20ac34 million from \u20ac1,187 million to \u20ac1,152
million mainly due to revaluation of the shares in Bank of Beijing with \u20ac -24 million. In 2023, the equity
securities at fair value through OCI decreased slightly by \u20ac2 million.
Revaluation reserve equity securities at fair value through other comprehensive income (*)
in \u20ac million
2023
2022
Positive re-measurement
1,158
1,190
Negative re-measurement
-6
-4
Total
1,152
1,187
Market risk in trading books (*)
Within the trading portfolios, the positions are maintained in the financial markets. These positions are often
a result of transactions with clients and may benefit from short-term price movements. In 2023, ING
continued its strategy of undertaking trading activities to develop its client-driven franchise and deliver a
differentiating experience by offering multiple market and trading products.
Governance (*)
The Financial Markets Risk Committee (FMRC) is the market risk committee that, within the risk appetite set
by the ALCO Bank, sets the market risk limits both on an aggregated level and on a desk level. The FMRC has
delegated authority from ALCO Bank for the management of market risk related to all trading and banking
book activities within Financial Markets (FM). Financial Risk/ Trading Risk Management (FR/ TRM) advises both
FMRC and ALCO Bank on the market risk appetite of the trading activities.
With respect to the trading portfolios, TRM focuses on the management of market risks of Wholesale
Banking (mainly Financial Markets) as this is the only business line within ING where trading activities take
place. Trading activities include facilitation of client business and market making. TRM is responsible for the
development and implementation of trading risk policies and risk measurement methodologies, and for
reporting and monitoring risk exposures against approved trading limits. TRM also reviews trading mandates
and global limits, and performs the gatekeeper role in the product review process (PARP).
Risk measurement (*)
ING uses a comprehensive set of methodologies and techniques to measure market risk in trading books:
Value at Risk (VaR) and Stressed Value at Risk (SVaR), Incremental Risk Charge (IRC), and stress testing.
Systematic validation processes are in place to validate the accuracy and internal consistency of data and
parameters used for the internal models and modelling processes.
Value at Risk (*)
TRM uses the historical simulation VaR methodology (HVaR) as its primary risk measure. The HVaR for
market risk quantifies, with a one-sided confidence level of 99 percent, the maximum overnight loss that
could occur in the trading portfolio of ING due to changes in risk factors (e.g. interest rates, equity prices,
foreign exchange rates, credit spreads, implied volatilities) considering the positions remains unchanged for
a time period of one day.
Next to general market movements in these risk factors, HVaR also takes into account market data
movements for specific moves in, for example, the underlying issuer or securities. A single model which
diversifies general and specific risk is used. In general, a full revaluation approach is applied, while for a
limited number of linear trading positions and risk factors in commodity and equity risk classes a sensitivity-
based approach is applied. The potential impact of historical market movements on today\u2019s portfolio is
estimated, based on equally weighted observed market movements of the previous year (260 business
days). When simulating potential movements in risk factors, depending on the risk factor type, either an
absolute or a relative shift is used.
The data used in the computations is updated daily. ING uses HVaR with a one-day horizon for internal risk
measurement, management control, and backtesting, and HVaR with a 10-day horizon for determining
regulatory capital. To compute HVaR with a 10-day horizon, the one-day risk factor shifts are scaled by the
square root of 10 and then used as an input for the revaluation. The same model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Limitations (*)
HVaR has some limitations: HVaR uses historical data to forecast future price behaviour, but future price
behaviour could differ substantially from past behaviour. Moreover, the use of a one-day holding period (or
10 days for regulatory capital calculations) assumes that all positions in the portfolio can be liquidated or
hedged in one day. In periods of illiquidity or market events, this assumption may not hold. Also, the use of
a 99 percent confidence level means that HVaR does not take into account any losses that occur beyond
this confidence level.
Backtesting (*)
Backtesting is a technique for the ongoing monitoring of the plausibility of the HVaR model in use. Although
HVaR models estimate potential future trading results, estimates are based on historical market data. In a
backtest, the actual daily trading result (excluding fees and commissions) is compared with the one-day
HVaR.
In addition to using actual results for backtesting, ING also uses hypothetical results, which exclude the
effects of intraday trading, fees, and commissions. When an actual or a hypothetical loss exceeds the HVaR,
an \u2018outlier\u2019 occurs. Based on ING\u2019s one-sided confidence level of 99 percent, an outlier is expected once in
every 100 business days.
On an overall level in 2023, there was one outlier for hypothetical P&L and zero outliers for actual P&L. The
hypothetical outliers occurred during the past year concentrated in the first quarter of 2023, mainly due to
the increased market volatility arising from major American banks being collapsed.
Stressed HVaR (*)
The stressed HVaR (SVaR) is intended to replicate the HVaR calculation that would be generated on the
bank\u2019s current portfolio with inputs calibrated to the historical data from a continuous 12-month period of
significant financial stress relevant to the bank\u2019s portfolio.
To calculate SVaR, ING uses the same model that is used for 1DHVaR, with a 10-day horizon. The data for
the historical stress period used currently includes the height of the credit crisis around the fall of Lehman
Brothers (2008-2009), and this choice is reviewed regularly. The historical data period is chosen so that it
gives the worst scenario loss estimates for the current portfolio. The same SVaR model is used for
management purposes and for regulatory purposes. The same SVaR model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Incremental risk charge (*)
The incremental risk charge (IRC) for ING is an estimate of the default and migration risks for credit products
(excluding securitisations) in the trading book, over a one-year capital horizon, with a 99.9% confidence
level. Trading positions (excluding securitisations) of ING, which are subject to specific interest rate risk
included in the internal model approach for market risk regulatory capital, are in scope of the IRC model. By
model choice, equity is excluded from the model. For the calculation of IRC, ING performs a Monte Carlo
simulation based on a multi-factor t-copula. In the multi-factor IRC model the supervisory asset correlations
are no longer applicable and the calibration of the correlations is based on historical market data. The rating
change is simulated for all issuers over the different liquidity horizons (i.e. time required to liquidate the
position or hedge all significant risks) within one year. Movements across different rating categories and
probabilities of default are governed by a credit-rating transition matrix. An internal transition matrix along
with internal LGDs is used, to comply with the consistency requirement. The financial impact is then
determined for the simulated migration to default, or for the simulated migration to a different rating
category, based on LGD or credit spread changes, respectively.
The liquidity horizon has been set to the regulatory minimum of three months for all positions in scope. ING
reviews the liquidity horizons on a yearly basis, based on a structured assessment of the time it takes to
liquidate the positions in the trading portfolio.
Stress testing and event risk (*)
Stress testing is a valuable risk management tool. In addition to the bank-wide stress test framework as
described in the stress-testing section, Trading Risk Management performs stress tests specific to the
trading book with various frequencies. ING went live with a new Trading Book Stress Testing model in 2023,
replacing the previously used Event Risk model. With the new model, the trading book stress tests evaluate
the impact on the bank\u2019s trading book under severe but plausible stress scenarios, using full revaluation
approach. The framework is based on historical as well as hypothetical scenarios. The stress result is an
estimate of the profit and loss caused by a potential event and its worldwide impact for ING. The results of
the stress tests are used for decision-making aimed at maintaining a financially healthy going-concern
institution after a severe event occurs.
In stress scenarios, shocks are applied to prices (credit spreads, interest rates, equity, commodities, and FX
rates) and volatilities. Depending on the type of the stress test, additional scenario assumptions can be
made, for example on correlations, dividends, or recovery rates. The structural scenarios are defined to
cover market moves in various directions and capture different asset class correlations. Scenarios are
calculated using full revaluation approach. The worst scenarios are determined for each product line,
business line and super business line, and compared against limits.
Sensitivities (*)
As part of the risk monitoring framework, TRM actively monitors the sensitivities of the trading portfolios.
Sensitivities measure the impact of movements in individual market risk factors (foreign exchange rates,
interest rates, credit spreads, equity and commodity prices) on profit and loss results of the trading
positions and portfolios.
The following tables show the five largest trading positions in terms of sensitivities to foreign exchange,
interest rate and credit spread risk factor movements. These largest exposures also reflect concentrations of
risk in FX risk per currency, interest rate risk per currency, and credit spread risk per country, rating and
sector. Due to the nature of the trading portfolios, positions in the portfolios can change significantly from
day to day, and sensitivities of the portfolios can change daily accordingly.
Most important foreign exchange year-end trading positions (*)
in \u20ac million
2023
2022
Foreign exchange
Foreign exchange
Japanese Yen
61
US Dollar
-187
Taiwan Dollar
-58
Romanian Leu
88
Romanian Leu
58
Japanese Yen
86
Chinese Yuan
49
Chinese Yuan
32
Hong Kong Dollar
-38
South Korean Won
28
Most important interest rate and credit spread sensitivities at year-end (*)
in \u20ac thousand
2023
2022
Interest rate (BPV) 1
Interest rate (BPV) 1
Euro
-309
Euro
-334
Czech koruna
71
British Pound
-95
Korean Won
-41
US Dollar
-79
US Dollar
-40
Taiwan Dollar
67
British Pound
-35
Japanese Yen
63
Credit spread (CSO1) 2
Credit spread (CSO1) 2
Germany
405
Netherlands
162
Netherlands
120
United States
151
Korea
-111
Japan
102
Japan
106
France
88
United Kingdom
101
Germany
87
1 Basis point value (BPV) measures the impact on value of a one basis point increase in interest rates.
2 Credit spread sensitivity (CS01) measures the impact on value of a one basis point increase in credit spreads. Exposures to
supranational institutions are not assigned to a specific country.
Credit spread sensitivities per risk class and sector at year-end (*)
2023
2022
in \u20ac thousand
Corporate
Financial
institutions
Corporate
Financial
institutions
Credit spread (CSO1) 1
Risk classes
1 (AAA)
2
-1
2\u20134 (AA)
12
50
-1
-7
5\u20137 (A)
57
50
154
-13
8\u201310 (BBB)
106
13
249
-11
11\u201313 (BB)
25
-25
7
7
14\u201316 (B)
17
-4
23
-4
17\u201322 (CCC and NPL)
-8
-20
3
-7
Not rated
Total
208
65
437
-36
1 Credit spread sensitivity (CS01) measures the impact on value of a one basis point increase in credit spreads.
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Funding and liquidity risk (*)
Introduction (*)
Funding and liquidity (F&L) risk is the risk that ING or one of its subsidiaries cannot meet their financial
liabilities upon their maturity date at a reasonable cost and in a timely manner. ING incorporates funding
and liquidity risk management in its business strategy, and has established a funding and liquidity risk
framework to manage these risks within predefined boundaries.
A high-level overview of the F&L framework is provided in the next figure.
Governance (*)
Funding and liquidity risk management within ING falls under the supervision of the ALCO Bank function,
which approves the funding and liquidity risk appetite and subsequently cascades it throughout the
organisation. ALCO Bank has delegated the responsibilities of the Internal Capital and Liquidity Adequacy
Assessment Process (ICLAAP) and documents, as per the ICLAAP framework of ING, to the ICLAAP
Committee. The ICLAAP Committee therefore focuses on technical liquidity documents and oversees
business processes and deliverables concerning the Internal Liquidity Adequacy Assessment Process
(ILAAP). The EB, MBB, and staff departments from the CRO and CFO domains, as well as Group Treasury,
have oversight of, and are responsible for, managing funding and liquidity risks.
ING\u2019s funding and liquidity risk governance is based on the three-lines-of-defence structure. This sets a clear
division of responsibilities as well as an independent risk control challenge process. Group Treasury and the
business lines have the first-line-of-defence functions, which include management of ING\u2019s (regulatory)
liquidity and funding position, maintaining access to the professional funding markets, and managing the
liquidity buffer. Financial Risk, as the second line of defence, is responsible for developing and maintaining
ING\u2019s policies, standards and guidelines on F&L risk management, as well as for setting the F&L risk appetite
through stress testing and other risk measurement activities. The Finance function is responsible for
management information and regulatory reporting related to funding and liquidity risk management. As
the third line of defence, Corporate Audit Services is responsible for independently assessing the design,
effectiveness, and implementation of the Funding & Liquidity framework.
Funding and liquidity management strategy and objectives (*)
The main objective of ING\u2019s funding and liquidity risk management is to maintain sufficient liquidity to fund
the commercial activities of ING, both under normal and stressed market circumstances across various
locations, currencies, and tenors.
ING\u2019s funding consists mainly of retail and corporate deposits contributing around 50 percent and 25
percent of total funding, respectively. These funding sources provide a relatively stable funding base. The
remainder of the required funding is attracted primarily through a combination of long-term and short-term
professional funding. Group Treasury manages the professional funding in line with the F&L risk appetite,
with the aim of ensuring a sufficiently diversified and stable funding base.
Funding and liquidity adequacy and risk appetite (*)
ING identifies key drivers of short-term and future liquidity and funding needs on an ongoing basis through
the periodic risk identification process. Taking into consideration the identified risk drivers, ING regularly
assesses its current and future liquidity adequacy and, if deemed necessary, takes action to further improve
ING\u2019s liquidity position and maintain sufficient counterbalancing capacity. A liquidity adequacy statement is
formulated on a quarterly basis to substantiate and reflect the management view on the current funding
and liquidity position as well as the potential future challenges. The quarterly liquidity adequacy statement
is an important part of ING\u2019s ILAAP process.
Additionally, ING completes ad-hoc funding and liquidity assessments if deemed necessary. Following the
banking turmoil in March 2023, ING completed a lessons-learned deep-dive. This deep-dive included peer
and internal analysis of deposit structures and liquidity buffers, and a review of the influence of mobile
banking apps and social media on financial institutions. The F&L risk appetite subsequently incorporated
elements of this analysis, as well as the impacts of quantitative tightening, TLTRO III redemptions, increased
competition for savings in the higher-interest-rate-environment and potentially higher deposit outflows in
certain countries, in the 2023 review.
ING assesses its F&L adequacy through three lenses \u2013 stress, economic and normative:
\u2022 Through the stress lens, ING evaluates its ability to withstand periods of prolonged F&L stress for both
normative and economic requirements or limits under idiosyncratic, market-related, a combination of
idiosyncratic and market-related and climate risk scenarios, which lead to customer deposit outflows,
deterioration of access to funding markets, and lower liquidity value of counterbalancing capacity.
\u2022 Through the economic lens, ING assesses the extent to which its customers, professional counterparties
and investors are comfortable to provide deposits and funding in the tenors, currencies, and instruments
necessary to sustainably fund the business (intraday, short-term and long-term) in a going-concern
situation.
\u2022 Through the normative lens, ING ascertains that the bank is in the position to meet current and future
home and host regulatory requirements.
For each lens, ING has established a related set of risk appetite statements, which define ING\u2019s risk appetite
commensurate with the principles of liquidity adequacy. These risk appetite statements are summarised in
the following illustration:
The F&L risk appetite statements are translated into a number of metrics with appropriate boundaries and
instruments, which are used to regularly measure and manage ING\u2019s funding and liquidity risk. The risk
appetite with respect to the stress lens aims to have sufficient counterbalancing capacity under various
internally defined stress scenarios. Regarding the economic perspective, an internally defined stable funding
to loans (SFtL) ratio and stable funding surplus metric (supplemented by other metrics) is used to stimulate
a diversified funding base and to prevent overreliance on professional funding. Finally, the liquidity coverage
ratio (LCR) and the net stable funding ratio (NSFR) regulatory metrics are monitored in terms of both ING\u2019s
risk appetite and normative requirements.
The macroeconomic and market environment are also important considerations in ING\u2019s funding and
liquidity framework. The macroeconomic environment comprises various exogenous factors over which ING
has no control, but which may have a material impact on ING\u2019s F&L position. The main macroeconomic
factors analysed on a regular basis include:
\u2022 Performance of global and local economic performance e.g. shifts in GDP, inflation rates, unemployment
rates, and public deficit/surplus;
\u2022 Developments and risks arising from geopolitical tensions and related trends;
\u2022 Monetary policy with a focus on the alternative monetary measures employed by central banks in
recent years as a result of the global energy crisis and the recent period of high inflation;
\u2022 Regulatory requirements; e.g. understanding the changing regulatory landscape as well as the impact of
ING\u2019s actions on existing regulatory boundaries.
The strategic ambitions of ING, together with the design and execution of the funding plan, are assessed
under both current and projected market conditions. An emphasis is placed on understanding overall
market trends and developments, credit rating changes, and peer comparisons.
Liquidity stress-testing (*)
Funding and liquidity stress-testing forms part of the overall F&L framework. It allows ING to examine the
effects of exceptional but plausible future events on ING\u2019s funding and liquidity position. It also provides
insight into which entities, business lines or portfolios are vulnerable to which types of risk drivers or
scenarios.
The stress-testing framework encompasses the funding and liquidity risks of the consolidated balance sheet
of ING Group, including all entities, business lines as well as on-, and off-balance-sheet positions. The net
liquidity position (NLP) is the main stress-testing measure and is measured at different time buckets.
The stress-testing framework considers idiosyncratic, market-wide, combined (idiosyncratic and market-
wide), and climate and environmental stress scenarios. The design of the framework is based on empirical
evidence supplemented by expert judgement. The framework can be extended to additional ad-hoc
scenarios. For example, it can be used as input for firm-wide stress testing and reverse stress testing.
Outcomes of the stress tests are considered in the key aspects of ING\u2019s F&L risk framework and F&L risk
management, including:
\u2022 Risk Appetite Framework (through risk appetite statements);
\u2022 Risk identification and assessment;
\u2022 Monitoring of the liquidity and funding position;
\u2022 Business actions (if needed);
\u2022 Contingency funding plan;
\u2022 Early-warning indicators.
The funding and liquidity stress-testing framework is also subject to regular internal validation by model
validation.
In line with supervisory expectations, ING\u2019s liquidity position is stress tested on at least a monthly basis
using scenarios that form part of the F&L risk appetite statement. The results of all internal stress scenarios
are monitored and assessed on a regular basis. In addition, ad-hoc scenarios based on current economic
and market developments are run to determine their potential impacts on the funding and liquidity position
of ING. In 2023, this included stress test scenarios dedicated to the impact of rapid deposit outflows on the
bank, as well as a shutdown of short and long-term funding markets. The internal stress scenarios also serve
as input in the decision on additional contingency measures.
Contingent F&L risks are addressed in the contingency capital and funding plan with a focus on early-
warning indicators as well as organisation and planning of liquidity management in times of stress. The
contingency funding measures are developed in conjunction with the ING recovery plan and are reviewed
and tested on a regular basis.
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"dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfSubordinatedLiabilities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-577": { "value": "3163000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfSubordinatedLiabilities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-578": { "value": "2894000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:RepaymentsOfSubordinatedLiabilities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-579": { "value": "1090000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:RepaymentsOfSubordinatedLiabilities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-580": { "value": "2449000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:RepaymentsOfSubordinatedLiabilities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-581": { "value": "291000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-582": { "value": "296000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-583": { "value": "301000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:PaymentsOfLeaseLiabilitiesClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-584": { "value": "-3531000000", "decimals": -6, "dimensions": { "concept": "ing:ProceedsFromSaleIssuePurchaseOfTreasuryShares", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-585": { "value": "-1717000000", "decimals": -6, "dimensions": { "concept": "ing:ProceedsFromSaleIssuePurchaseOfTreasuryShares", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-586": { "value": "-1608000000", "decimals": -6, "dimensions": { "concept": "ing:ProceedsFromSaleIssuePurchaseOfTreasuryShares", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-587": { "value": "2967000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-588": { "value": "3093000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-589": { "value": "2382000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-590": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherInflowsOutflowsOfCashClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-591": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherInflowsOutflowsOfCashClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-592": { "value": "1000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:OtherInflowsOutflowsOfCashClassifiedAsFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-593": { "value": "18404000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-594": { "value": "4649000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-595": { "value": "5387000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-596": { "value": "-1481000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-597": { "value": "-11770000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-598": { "value": "-3335000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-599": { "value": "95391000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-600": { "value": "107665000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-601": { "value": "111566000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-602": { "value": "-898000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-603": { "value": "-504000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-604": { "value": "-565000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-605": { "value": "93012000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-606": { "value": "95391000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-607": { "value": "107665000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-608": { "value": "
Cash and cash equivalents
in EUR million
2023
2022
2021
Treasury bills and other eligible bills included in securities at AC
0
1
23
Deposits from banks
-5,132
-6,172
-7,059
Loans and advances to banks
7,931
13,948
8,181
Cash and balances with central banks
90,214
87,614
106,520
Cash and cash equivalents at end of year
93,012
95,391
107,665
Cash and cash equivalents includes deposits from banks and loans and advances to banks that are payable
on demand.
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.
References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements.
The table below presents the Interest and dividend received and paid.
in EUR million
2023
2022
2021
Interest received
51,029
28,105
21,496
Interest paid
-33,734
-14,193
-8,705
17,295
13,911
12,791
Dividend received 1
205
229
172
Dividend paid
-2,967
-3,093
-2,382
1 Includes dividends received as recognised within Investment Income, from equity securities included in the Financial assets at fair
value through profit or loss, Financial assets at fair value through OCI, and from Investments in associates and joint ventures. Dividends
paid and received from trading positions have been included.
Dividends received from associates and joint ventures are included in investing activities, interest received,
interest paid and other dividends received are included in operating activities and dividend paid is included
in financing activities in the Consolidated statement of cash flows.
32\u00a0 Changes in liabilities arising from financing activities
Changes in liabilities arising from financing activities
Debt securities in
issue
Subordinated
Loans
Lease liabilities
Total Liabilities from
financing activities
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance
95,918
91,784
15,786
16,715
1,174
1,220
112,878
109,719
Cashflows:
Additions
116,436
92,707
2,225
983
118,661
93,690
Redemptions / Disposals
-90,574
-82,844
-2,894
-1,090
-291
-296
-93,758
-84,230
Non cash changes:
Amortisation
764
312
34
30
28
15
826
357
Other
502
39
12
7
256
239
769
285
Changes in unrealised
revaluations
2,680
-7,658
473
-1,470
3,153
-9,127
Foreign exchange movement
-1,057
1,577
-235
611
-4
-4
-1,296
2,185
Closing balance
124,670
95,918
15,401
15,786
1,162
1,174
141,233
112,878
Part of Debt securities in issue and subordinated loans are subject to fair value hedge accounting. Hence,
changes in unrealised revaluations represent fair value adjustments to the hedged item attributable to the
hedged interest rate risk. Reference is made to the paragraph 'fair value hedge accounting' in Note 36
'Derivatives and hedge accounting'.", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-609": { "value": "
Cash and cash equivalents
in EUR million
2023
2022
2021
Treasury bills and other eligible bills included in securities at AC
0
1
23
Deposits from banks
-5,132
-6,172
-7,059
Loans and advances to banks
7,931
13,948
8,181
Cash and balances with central banks
90,214
87,614
106,520
Cash and cash equivalents at end of year
93,012
95,391
107,665
Cash and cash equivalents includes deposits from banks and loans and advances to banks that are payable
on demand.
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.
References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-610": { "value": "0", "decimals": -6, "dimensions": { "concept": "ing:TreasuryBillsAndOtherEligibleBills", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-611": { "value": "1000000", "decimals": -6, "dimensions": { "concept": "ing:TreasuryBillsAndOtherEligibleBills", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-612": { "value": "23000000", "decimals": -6, "dimensions": { "concept": "ing:TreasuryBillsAndOtherEligibleBills", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-613": { "value": "5132000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsDepositsFromBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-614": { "value": "6172000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsDepositsFromBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-615": { "value": "7059000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsDepositsFromBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-616": { "value": "7931000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsLoansAndAdvancesToBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-617": { "value": "13948000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsLoansAndAdvancesToBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-618": { "value": "8181000000", "decimals": -6, "dimensions": { "concept": "ing:CashAndCashEquivalentsLoansAndAdvancesToBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-619": { "value": "90214000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndBankBalancesAtCentralBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-620": { "value": "87614000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndBankBalancesAtCentralBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-621": { "value": "106520000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndBankBalancesAtCentralBanks", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-622": { "value": "93012000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-623": { "value": "95391000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-624": { "value": "107665000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-626": { "value": "
Cash and cash equivalents includes deposits from banks and loans and advances to banks that are payable
on demand.
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.
1\u00a0 Basis of preparation and material accounting policy information
1.1\u00a0 Reporting entity and authorisation of the Consolidated financial statements
ING Groep N.V. (Naamloze vennootschap) is a company domiciled in Amsterdam, the Netherlands.
Commercial Register of Amsterdam, number 33231073. These Consolidated financial statements, as at and
for the year ended 31\u00a0December 2023, comprise ING Groep N.V. (the Parent company) and its subsidiaries,
together referred to as ING Group. ING Group is a global financial institution with a strong European base,
offering a wide range of retail and wholesale banking services to customers in over 40 countries. \u00a0
The ING Group Consolidated financial statements, as at and for the year ended 31\u00a0December 2023, were
authorised for issue in accordance with a resolution of the Executive Board on 4 March 2024. The Executive
Board has the power to amend the financial statements as long as these are not adopted by the General
Meeting of Shareholders. The General Meeting of the Shareholders may decide not to adopt the financial
statements, but may not amend these.
1.2\u00a0 Basis of preparation of the Consolidated financial statements
The ING Group Consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the relevant articles of Part
9 of Book 2 of the Dutch Civil Code.
IFRS as adopted by the EU are IFRS Standards and IFRS Interpretations as issued by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) with some limited
modifications such as the temporary \u2018carve-out\u2019 from IAS 39 \u2018Financial Instruments: Recognition and
Measurement\u2019 (herein, referred to as IFRS).
Under the EU carve-out, ING Group applies fair value hedge accounting to portfolio hedges of interest rate
risk (macro hedging). For further information, reference is made to paragraph 1.5.4 \u2018Derivatives and hedge
accounting\u2019 of this note and to Note 36\u00a0 Derivatives and hedge accounting.
The ING Group Consolidated financial statements have been prepared on a going concern basis and there
are no significant doubts about the ability of ING Group to continue as a going concern.
The Consolidated financial statements are presented in euros and rounded to the nearest million, unless
stated otherwise. Amounts may not add up due to rounding.
1.2.1\u00a0 Presentation of Risk management disclosures
To improve transparency, reduce duplication and present related information in one place, certain
disclosures of the nature and extent of risks related to financial instruments required by IFRS 7 \u2018Financial
instruments: Disclosures\u2019 are included in the \u2018Risk management\u2019 section of the Annual Report.
These disclosures are an integral part of ING Group Consolidated financial statements and are indicated in
the \u2018Risk management\u2019 section by the symbol (*). Chapters, paragraphs, graphs or tables within the 'Risk
management' section that are indicated with this symbol in the respective headings or table header are
considered to be an integral part of the Consolidated financial statements.
1.3\u00a0 Changes to accounting policies and presentation
ING Group has consistently applied its accounting policies to all periods presented in these Consolidated
financial statements.
In 2023, ING Group updated the presentation in Note 13 'Customer deposits' to improve consistency and
comparability. Comparative figures for 2022 have been updated accordingly.
1.3.1\u00a0 Changes in IFRS effective in 2023
ING Group had the following changes in accounting policies in the current reporting period:
IFRS 17 \u2018Insurance Contracts\u2019
IFRS 17, a new accounting standard for insurance contracts covering recognition and measurement,
presentation and disclosure requirements, became effective on 1 January 2023. IFRS 17 replaces IFRS 4
\u2018Insurance Contracts\u2019, which allowed diversity in accounting practices for insurance contracts. IFRS 17
includes an optional scope exclusion for loans with death waivers.
ING Group does not have an insurance business, but on a limited basis sells insurance products as a broker
where it does not run the insurance risk, hence such contracts are not in scope of IFRS 17. However, ING
Group has a portfolio of loans with death waivers in the Netherlands with a net carrying amount of EUR 743
million at 1 January 2023. While IFRS 4 allowed separation of such contracts into two components in the
past (a loan in scope of IFRS 9 \u2018Financial Instruments\u2019 measured at amortised cost and an insurance contract
for the death waiver feature in scope of IFRS 4), IFRS 17 no longer allows such separation and requires such
instruments to be accounted for in their entirety using either IFRS 9 or IFRS 17.
ING Group chooses to apply IFRS 9 \u2019Financial Instruments\u2019 to such loans with death waivers. As a result, this
portfolio no longer meets the \u2018solely payments of principal and interest\u2019 (SPPI) criterion. This causes the
portfolio to be measured at fair value through profit or loss instead of amortised cost from 1 January 2023.
This reclassification led to EUR -13 million impact on the opening total equity at 1 January 2023. Therefore,
the financial impact of IFRS 17 on ING Group is limited.
Accounting treatment of non-financial guarantees
ING Group changed its accounting policy for non-financial guarantees that are subject to contractual
indemnification rights (such as performance and other non-financial guarantees as well as letters of credit)
from IAS 37 principles to loan commitment accounting under IFRS 9. The re-scoping was triggered by the
introduction of IFRS 17 Insurance contracts and results in reliable and more relevant information,
particularly when credit risk is elevated as IFRS 9 expected credit losses model captures that risk earlier than
IAS 37. This voluntary policy change had a limited impact on ING\u2019s opening total equity of EUR -33 million.
Other changes in IFRS effective in 2023 (endorsed by the EU):
The following amendments to IFRS became effective in the current reporting period with no significant
impact for ING:
\u2022 Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019: Disclosure of Accounting Policies (issued in
February 2021).
\u2022 Amendments to IAS 8 \u2018Accounting Policies, Changes in Accounting Estimates and Errors\u2019: Definition of
Accounting Estimates (issued in February 2021).
\u2022 Amendments to IAS 12 \u2018Income Taxes\u2019: Deferred Tax Related to Assets and Liabilities Arising From a
Single Transaction (issued in May 2021).
\u2022 Amendments to IAS 12 'Income Taxes': International Tax Reform - Pillar Two Model Rules. These
amendments allow ING Group to scope out Pillar Two model rules from the deferred tax recognition and
related disclosure requirements. More information on ING Group\u2019s exposure to Pillar Two model rules is
included in Note 31 'Information on geographical areas'.
1.3.2\u00a0 Upcoming changes in IFRS after 2023
The following published amendments are not mandatory for 2023 and have not been early adopted by ING
Group. The implementation of these amendments is expected to have no significant impact on ING Group's
Consolidated financial statements when they become effective.
Effective in 2024 (endorsed by the EU):
\u2022 Amendments to IFRS 16 'Leases': Lease Liability in a Sale and Leaseback (issued in September 2022).
\u2022 Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019: Classification of Liabilities as Current or
Non-current (issued in January 2020).
Effective in 2024 (not yet endorsed by the EU):
\u2022 Amendments to IAS 7 'Statement of Cash flows' and IFRS 7 'Financial Instruments: Disclosures': Supplier
Finance Arrangements (issued in May 2023).
Effective in 2025 (not yet endorsed by the EU):
\u2022 Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates': Lack of Exchangeability
(issued in August 2023).
1.4\u00a0 Significant judgements and critical accounting estimates and assumptions
The preparation of the Consolidated financial statements requires management to make judgements in the
process of applying its accounting policies and to use estimates and assumptions. The estimates and
assumptions affect the reported amounts of the assets and liabilities and the amounts of the contingent
assets and contingent liabilities at the balance sheet date, as well as reported income and expenses for the
year. The actual outcome may differ from these estimates. The process of setting assumptions is subject to
internal control procedures and approvals.
ING Group has identified areas that require management to make significant judgements and use critical
accounting estimates and assumptions based on the information and financial data that may or may not
change in future periods. These areas are:
\u2022 Loan loss provisions (financial assets) (refer to Note 1.5.6 \u2018Impairment of financial assets');
\u2022 The determination of the fair values of financial assets and liabilities (refer to Note 1.5.3 for \u2018Fair values of
financial assets and liabilities\u2019);
\u2022 Investment in associate - assessment of additional impairment losses or reversal of previous impairment
losses (refer to Note 1.10 \u2018Investments in associates and joint ventures);
\u2022 Provisions (refer to Note 1.15 \u2018Provisions, contingent liabilities and contingent assets\u2019); and
\u2022 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO) (refer to Note 1.5.8 \u2018Accounting for
Targeted Longer-Term Refinancing Operations (TLTRO)').
1.5\u00a0 Financial instruments
ING Group applies IFRS 9 \u2018Financial Instruments\u2019 to the recognition, classification and measurement, and
derecognition of financial assets and financial liabilities and the impairment of financial assets. ING Group
applies the requirements of IAS 39 \u2018Financial Instruments: Recognition and Measurement\u2019 for hedge
accounting purposes.
1.5.1\u00a0 Recognition and derecognition of financial instruments
Recognition of financial assets
Financial assets are recognised in the balance sheet when ING Group becomes a party to the contractual
provisions of the instrument. For a regular way purchase or sale of a financial asset, trade date and
settlement date accounting is applied depending on the classification of the financial asset.
Derecognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where ING Group has transferred the rights to receive the cash flows from the financial asset or
assumed an obligation to pass on the cash flows and has transferred substantially all the risks and rewards
of the asset. If ING Group neither transfers nor retains substantially all the risks and rewards of ownership of
a financial asset, it derecognises the financial asset if it no longer has control over the asset. The difference
between the carrying amount of a financial asset that has been derecognised and the consideration
received is recognised in profit or loss.
Recognition of financial liabilities
Financial liabilities are recognised on the date that the entity becomes a party to the contractual provisions
of the instrument.
Derecognition of financial liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished and
the consideration paid is recognised in profit or loss.
1.5.2\u00a0 Classification and measurement of financial instruments
Financial assets
ING Group classifies its financial assets in the following measurement categories:
\u2022 those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
\u2022 those to be measured at amortised cost (AC).
At initial recognition, ING Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss (FVPL) are expensed in the
statement of profit or loss.
Financial assets \u2013 Debt instruments
The classification depends on the entity\u2019s business model for managing the financial assets and the
contractual terms of the cash flows at initial recognition.
Business models
Business models are classified as Hold to Collect (HtC), Hold to Collect and Sell (HtC&S) or Other depending
on how a portfolio of financial instruments as a whole is managed. ING Group\u2019s business models are based
on the existing management structure of the bank, and refined based on an analysis of how businesses are
evaluated and reported, how their specific business risks are managed and on historic and expected future
sales. Sales are permissible in a HtC business model when these are due to an increase in credit risk, take
place close to the maturity date (where the proceeds from the sales approximate the collection of the
remaining contractual cash flows), are insignificant in value (both individually and in aggregate) or are
infrequent.
Contractual cash flows Solely Payments of Principal and Interest (SPPI)
The contractual cash flows of a financial asset are assessed to determine whether they represent SPPI.
Interest includes consideration for the time value of money, credit risk and for other basic lending risks such
as consideration for liquidity risk and costs associated with holding the financial asset for a particular period
of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are SPPI.
In assessing whether the contractual cash flows are SPPI, ING Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition.
Based on the entity\u2019s business model for managing the financial assets and the contractual terms of the
cash flows, there are three measurement categories into which ING Group classifies its debt instruments:
\u2022 Amortised Cost (AC):
Debt instruments that are held for collection of contractual cash flows under a HtC business model where
those cash flows represent SPPI are measured at AC. Interest income from these financial assets is
included in Interest income using the Effective Interest Rate (EIR) method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVOCI:
Debt instruments that are held for collection of contractual cash flows and for selling the financial assets
under a HtC&S business model, where the assets\u2019 cash flows represent SPPI, are measured at FVOCI.
Movements in the carrying amount are recognised in OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and presented in Investment income or Other net income, based
on the specific characteristics of the business model. Interest income from these financial assets is
included in Interest income using the EIR method. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Group may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo\u2019s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
ING Group reclassifies debt instruments if, and only if, its business model for managing those financial
assets changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
Repurchase transactions and reverse repurchase transactions
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the Consolidated statement of financial position. The counterparty liability is
measured at FVPL (designated) and included in Other financial liabilities at FVPL if the asset is measured at
FVPL. Otherwise, the counterparty liability is included in Deposits from banks, Customer deposits, or Trading,
as appropriate.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the Consolidated statement of financial position. The consideration paid
to purchase securities is recognised as Loans and advances to customers, Loans and advances to banks,
Other financial assets at FVPL or Trading assets, as appropriate. The difference between the sale and
repurchase price is treated as interest and amortised over the life of the agreement using the effective
interest method for instruments that are not measured at FVPL.
1.5.3\u00a0 Fair values of financial assets and liabilities
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a \u2018Day One Profit or Loss\u2019) is deferred. ING Group defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Group recognises the difference as a
gain or loss at inception.
Subsequently, except for financial assets and financial liabilities measured at amortised cost, all the other
financial assets and liabilities are measured at fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. It assumes that market
participants would use and take into account the characteristics of the asset or liability when pricing the
asset or liability. Fair values of financial assets and liabilities are based on unadjusted quoted market prices
where available. Such quoted market prices are primarily obtained from exchange prices for listed financial
instruments. Where an exchange price is not available, quoted prices in an active market may be obtained
from independent market vendors, brokers, or market makers. In general, positions are valued at the bid
price for a long position and at the offer price for a short position or are valued at the price within the bid-
offer spread that is most representative of fair value in the circumstances. In some cases where positions
are marked at mid-market prices, a fair value adjustment is calculated.
For certain financial assets and liabilities, quoted market prices are not available. For such instruments, fair
value is determined using valuation techniques. These range from discounting of cash flows to various
valuation models, where relevant pricing factors including the market price of underlying reference
instruments, market parameters (volatilities, correlations and credit ratings), and customer behaviour are
taken into account. ING Group maximises the use of market observable inputs and minimises the use of
unobservable inputs in determining the fair value. It can be subjective dependent on the significance of the
unobservable input to the overall valuation. All valuation techniques used are subject to internal review and
approval. Most data used in these valuation techniques are validated on a daily basis when possible.
When a group of financial assets and liabilities are managed on the basis of their net risk exposures, the fair
value of a group of financial assets and liabilities are measured on a net portfolio level.
To include credit risk in fair value, ING Group applies both Credit and Debit Valuation Adjustments (CVA, DVA,
also known as Bilateral Valuation Adjustments or BVA). Own issued debt and structured notes that are
designated at FVPL are adjusted for ING Group\u2019s own credit risk by means of a DVA. To include the funding
risk, ING Group applies an additional \u2018Funding Valuation Adjustment\u2019 (FVA) to the uncollateralised derivatives
based on the market price of funding liquidity.ING Group also applies to certain positions other valuation
adjustments to arrive at the fair value: Bid-Offer adjustments, Model Risk Adjustments and Collateral
Valuation Adjustments (CollVA).
Significant judgements and critical accounting estimates and assumptions:
\u2022 Even if market prices are available, when markets are less liquid there may be a range of prices for the
same security from different price sources. Selecting the most appropriate price requires judgement
and could result in different estimates of fair value.\u00a0
\u2022 Valuation techniques are subjective in nature and significant judgement is involved in establishing fair
values for certain financial assets and liabilities. Valuation techniques involve various assumptions
regarding pricing factors. The use of different valuation techniques and assumptions could produce
significantly different estimates of fair value.\u00a0
\u2022 Price testing is performed to assess whether the process of valuation has led to an appropriate fair
value of the position and to minimise the potential risks of economic losses due to incorrect or misused
models.
\u2022 Assessing whether a market is active, and whether an input is observable and significant, requires
judgement. ING Group categorises its financial instruments that are either measured in the statement
of financial position at fair value or of which the fair value is disclosed, into a three-level hierarchy
based on the observability and significance of the valuation inputs. The use of different approaches to
assess whether a market is active, whether an input is observable, and whether an unobservable input
is significant could produce different classification within the fair value hierarchy as well as potentially
different deferral of the Day One Profit or Loss.
\u2022 Reference is made to Note 35 'Fair value of assets and liabilities ' and to the \u2018Market risk\u2019 paragraph in
the \u2018Risk management\u2019 section of the Annual Report for the basis of the determination of the fair value
of financial instruments and related sensitivities.
1.5.4\u00a0 Derivatives and hedge accounting
IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to
continue with hedge accounting under IAS 39. ING Group decided to exercise this accounting policy choice
and did not adopt IFRS 9 hedge accounting as of 1 January 2018. Furthermore, ING Group applies fair value
hedge accounting for portfolio hedges of interest rate risk (macro fair value hedges) in accordance with the
EU carve-out version of IAS 39.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently measured at fair value. Fair values are obtained from quoted market prices in active
markets, including market transactions and valuation techniques (such as discounted cash flow models and
option pricing models), as appropriate. All derivatives are carried as assets when their fair value is positive
and as liabilities when their fair value is negative. Fair value movements on derivatives are presented in
profit or loss in Valuation result and net trading income, except for derivatives in either a formal hedge
relationship and so-called economic hedges that are not in a formal hedge accounting relationship where a
component is presented separately in interest result in line with ING Group\u2019s risk management strategy.
Embedded derivatives are separated from financial liabilities and other non-financial contracts and
accounted for as a derivative if, and only if:
1. the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
2. a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and
3. the combined instrument is not measured at fair value with changes in fair value reported in profit or
loss.
If an embedded derivative is separated, the host contract is accounted for as a similar free-standing
contract.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. ING Group designates
certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair
value hedge), hedges of highly probable future cash flows attributable to a recognised asset or liability or a
forecast transaction (cash flow hedge), or hedges of a net investment in a foreign operation. Hedge
accounting is used for derivatives designated in this way provided certain criteria are met.
At the inception of the transaction, ING Group documents the relationship between hedging instruments
and hedged items, its risk management objective, together with the methods selected to assess hedge
effectiveness. ING Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition \u2013 specific policies for hedges directly affected by IBOR reform
As explained in the \u2018IBOR Transition\u2019 paragraph of the \u2018Risk management\u2019 section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Group to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
\u2022 Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
\u2022 Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
\u2022 Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
\u2022 Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Group hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Group hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Group as at 31 December 2023 (mainly for WIBOR hedges).
ING Group will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note \u2018Risk management/ IBOR Transition\u2019 for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Group\u2019s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. Particularly,\u00a0
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2023, Phase 2
continued to be relevant for ING Group when ING actually transitioned its financial instruments (designated
in hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
\u2022 Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,
the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
\u2022 When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
\u2022 When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
\u2022 For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
\u2022 Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
Non-trading derivatives that do not qualify for hedge accounting
Derivative instruments that are used by ING Group as part of its risk management strategies, but which do
not qualify for hedge accounting under ING Group\u2019s accounting policies, are presented as non-trading
derivatives. Non-trading derivatives are measured at fair value with changes in the fair value taken to the
statement of profit or loss.
1.5.5\u00a0 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the statement of
financial position when ING Group has a current legally enforceable right to set off the recognised amounts
and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.
Offsetting is applied to certain derivatives for which the services of a central clearing house or broker are
used.
1.5.6\u00a0 Impairment of financial assets
An Expected Credit Loss (ECL) model is applied to financial assets accounted for at AC or FVOCI such as
loans, debt securities and lease receivables, as well as off-balance sheet items such as undrawn loan
commitments, certain financial guarantees issued, and undrawn committed revolving credit facilities. Under
the ECL model, ING Group calculates the expected credit losses (ECL) by considering on a discounted basis
the cash shortfall it would incur in case of a default and multiplying the shortfall by the probability of a
default occurring. The ECL is the sum of the probability-weighted outcomes. The ECL estimates are unbiased
and include reasonable and supportable information about past events, current conditions, and forecasts of
future economic conditions. ING Group\u2019s approach leverages the Advanced Internal Ratings Based (AIRB)
models that are used for regulatory purposes. Adjustments are applied to make these models suitable for
determining ECL. ECL is recognised on the balance sheet as loan loss provisions (LLP).
Three-stage approach
Financial assets are classified in one of the below three stages at each reporting date. A financial asset can
move between stages during its lifetime. The stages are based on changes in credit quality since initial
recognition and defined as follows:
\u2022 Stage 1
Financial assets that have not had a significant increase in credit risk since initial recognition (i.e. no
Stage 2 or 3 triggers apply). Assets are classified as Stage 1 upon initial recognition (with the exception of
purchased or originated credit impaired (POCI) assets) and ECL is determined by the probability that a
default occurs in the next 12 months (12 months ECL);
\u2022 Stage 2
Financial assets showing a significant increase in credit risk since initial recognition. For assets in Stage 2
ECL reflects an estimate on the credit losses over the remaining maturity of the asset (lifetime ECL); or
\u2022 Stage 3
Financial assets that are credit-impaired. Also for these assets ECL is determined over the remaining
maturity of the asset.
Significant increase in credit risk
ING Group established a framework, incorporating quantitative and qualitative indicators, to identify and
assess significant increases in credit risk (SICR). This is used to determine the appropriate ECL Stage for each
financial asset.
The main determinate of SICR is a quantitative test, whereby the lifetime Probability of Default (PD) of an
asset at each reporting date is compared against its lifetime PD determined at the date of initial recognition.
If the delta is above pre-defined absolute or relative thresholds the item is considered to have experienced a
SICR. Furthermore, any facility which shows an increase of 200% between the PD at the date of initial
recognition and the lifetime PD at the reporting date (i.e. threefold increase in PD) must be classified as
Stage 2. This is considered a backstop within the quantitative assessment of SICR. Refer to \u2018Criteria for
identifying a significant increase in credit risk\u2019 in the \u2018Risk Management\u2019 section of the Annual Report for
more details on relative and absolute PD thresholds, including quantitative disclosures on those thresholds.
Consequently, if the above quantitative SICR thresholds are exceeded, the item moves from Stage 1 to Stage
2 (unless the item is credit-impaired). In these instances, items are no longer assigned a 12-month ECL and
instead are assigned a lifetime ECL. Items can return to Stage 1 if there is sufficient evidence that there is no
longer a significant increase in credit risk.
ING Group also relies on a number of qualitative indicators to identify and assess SICR. These include:
\u2022 Forbearance status;
\u2022 Watch List status;
\u2022 Intensive care management;
\u2022 Collective SICR assessment;
\u2022 Substandard Internal rating; and
\u2022 Arrears status (including 30 days past due used as a backstop).
An asset that is in Stage 2 will move back to Stage 1 when none of the above criteria are in place anymore.
However, if the asset was moved to Stage 2 based on the forbearance status, then the asset stays in Stage
2 for at least 24 months. If the asset was classified as Stage 2 due to 30 days past due trigger, then the
asset is moved back to Stage 1 only after three months from when the trigger no longer applies.
Credit-impaired financial assets (Stage 3)
Financial assets are assessed for credit-impairment at each reporting date and more frequently when
circumstances warrant further assessment. Evidence of credit-impairment includes arrears of over 90 days
on any material credit obligation, indications that the borrower is experiencing significant financial difficulty,
a breach of contract, bankruptcy or distressed restructuring. The definition of credit-impaired under IFRS 9
(Stage 3) is aligned with the definition of default used by ING Group for internal risk management purposes,
which is also the definition used for regulatory purposes.
An asset (other than a POCI asset) that is in Stage 3 will move back to Stage 2 when, as at the reporting
date, it is no longer considered to be credit-impaired subject to certain probation periods. The asset will
migrate back to Stage 1 when its credit risk at the reporting date is no longer considered to have increased
significantly since initial recognition.
Macroeconomic scenarios
ING Group has established a quarterly process whereby forward-looking macroeconomics scenarios and
probability weightings are developed for the purpose of ECL. ING Group applies data predominantly from a
leading service provider enriched with the internal ING Group view. A baseline, up-scenario and a down-
scenario are determined to reflect an unbiased and probability-weighted ECL amount. As a baseline
scenario, ING Group applies the market-neutral view combining consensus forecasts for economic variables
such as unemployment rates, GDP growth, house prices, commodity prices, and short-term interest rates.
Applying market consensus in the baseline scenario ensures unbiased estimates of the expected credit
losses.
The alternative scenarios are based on observed forecast errors in the past, adjusted for the risks affecting
the economy today and the forecast horizon. The probabilities assigned are based on the likelihoods of
observing the three scenarios and are derived from confidence intervals on a probability distribution. The
forecasts for the economic variables are adjusted on a quarterly basis.
The probability weights applied to each of the three scenarios
ING Group uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and
downside). Management approach used to determine the weights of each scenario and in selecting the
parts of the distribution of forecast errors from which the weights are derived and disclosed in the
\u2018Alternative scenarios and probability weights\u2019 and the sensitivity analysis in the \u2018Risk Management\u2019 section
of the Annual Report.
Measurement of ECL
ING Group applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Group applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors\u2019 ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.
For the purpose of ECL, ING Group\u2019s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Group estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Group\u2019s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
Purchased or Originated Credit Impaired (POCI) assets
POCI assets are financial assets that are credit-impaired on initial recognition. Impairment on a POCI asset is
determined based on lifetime ECL from initial recognition. POCI assets are recognised initially at an amount
net of ECL and are measured at AC using a credit-adjusted effective interest rate. In subsequent periods any
changes to the estimated lifetime ECL are recognised in profit or loss. Favourable changes are recognised as
an impairment gain even if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at
origination.
Write-off and debt forgiveness
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovery and/or collectability of amounts due. The following events can lead to a write-off:
\u2022 After a restructuring has been completed and there is a high improbability of recovery of part of the
remaining loan exposure (including partial debt forgiveness);
\u2022 In a bankruptcy liquidation scenario;
\u2022 After divestment or sale of a credit facility at a discount; and
\u2022 Specific fraud cases with no recourse options.
When a loan is uncollectable, it is written off against the related loan loss provision. Subsequent recoveries
of amounts previously written off are recognised in \u2018Addition to loan loss provisions\u2019 in the Consolidated
statement of profit or loss.
Debt forgiveness (or debt settlement) involves write-off but additionally involves the forgiveness of a legal
obligation, in whole or in part. This means that ING Group forfeits the legal right to recover the debt. As a
result, the financial asset needs to be derecognised.
Presentation of ECL
ECL for financial assets measured at AC are deducted from the gross carrying amount of the assets. For
debt instruments at FVOCI, the ECL is recognised in OCI, instead of deducted the carrying amount of the
asset. ECL also reflects any credit losses related to the portion of the loan commitment that is expected to
be drawn down over the remaining life of the instrument. The ECL on issued financial guarantee contracts,
in scope of IFRS 9 and not measured at FVPL, are recognised as liabilities and presented in Other provisions.
ECL are presented in profit or loss in Addition to loan loss provision.
Significant judgements and critical accounting estimates and assumptions:
The calculation of ECL requires a number of judgements and estimates. In particular:
\u2022 ING Group makes various assumptions about the risk of default, the credit loss rates in case of a
default and expected future cash flows. For collective provisions, ING Group applies significant
judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection
and calibration of relevant models. For Stage 3 individual provisioning, the determination and
probabilities of restructuring and recovery scenarios as well as the amount and timing of expected
future cash flows may be particularly subjective.
\u2022 Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature.
The use of alternate forward-looking macroeconomic scenarios can produce significantly different
estimates of ECL. This is demonstrated in the sensitivity analysis in the \u2018Risk Management\u2019 section of
the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant
portfolios is disclosed.
\u2022 When determining whether the credit risk on a financial asset has increased significantly (criteria for
identifying a significant increase in credit risk), ING Group considers reasonable and supportable
information to compare the risk of default occurring at reporting date with the risk of a default
occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD
rating to each financial asset, there is significant judgement used in determining the Stage allocation
PD banding thresholds. The process of comparing a financial asset\u2019s PD with the PD banding thresholds
determines its ECL Stage. Assets in Stage 1 are allocated a 12-month ECL, and those in Stage 2 are
allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in
assigning financial asset PDs and the PD banding thresholds constitute a significant judgement.
Analysis of the sensitivity associated with the assessment of significant increase in credit risk is
presented in the \u2018Risk Management\u2019 section of the Annual Report.
\u2022 Judgement is exercised in management\u2019s evaluation of whether there is objective evidence that
exposures are credit-impaired.
\u2022 To reflect the risks that are not properly captured by the ECL models, a number of management
adjustments to the model-based ECL were necessary as at 31 December 2023, which required
significant judgement. Reference is made to the \u2018Management adjustments applied this year\u2019
paragraph in the \u2018Risk management\u2019 section of the Annual Report.
1.5.7\u00a0 Modification of financial instruments
In certain circumstances ING Group grants borrowers postponement, reduction of loan principal and/or
interest payments on a temporary period of time to maximise collection opportunities, and if possible, avoid
default, foreclosure, or repossession. When such postponement, reduction of loan principal and/or interest
payments is executed based on credit concerns it is also referred to as forbearance (refer to the \u2018Risk
Management\u2019 section of the Annual Report for more details) and requires analysis on whether the
contractual terms have been substantially modified or not. A similar assessment is needed when
contractual terms are modified for other reasons than forbearance.
ING Group determines whether there has been a substantial modification using both quantitative and
qualitative factors. If the modification results in a substantial modification of the terms of the loan, the
original loan is derecognised and a new loan is recognised at fair value at the modification date. In case of a
non-substantial modification, a modification gain or loss is recognised in profit or loss.
1.5.8\u00a0 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO)
ING Group participates in Targeted Longer-Term Refinancing Operations (TLTRO III). ING Group considers
TLTRO funding provided by the ECB to banks to be on market terms on the basis that the ECB has
established a separate market with TLTRO programmes. They have specific terms which are different from
other sources of funding available to banks, including those provided by the ECB. Consequently, the rate
under TLTRO is considered to be a market conforming rate and TLTRO funding is recognised fully as a
financial liability.
ING Group interprets the whole rate set by the ECB under TLTRO as a floating rate on the financial liability,
being the market rate for each specific period in time. This results in discrete rates for discrete interest
periods over the life of TLTRO. The change in the applicable rate between interest periods is seen as a
change in the floating rate and is accounted for prospectively. Similarly, if the ECB announces changes in
the rate for the amounts already drawn under the existing TLTRO, then such changes also represent a
change in a floating rate. Following this, such changes lead to the recognition of an increased/decreased
interest in the relevant period of life of the exposure, rather than by the recognition of an immediate
modification gain or loss at the moment of the change of terms by the ECB. If the change relates to the
periods already passed, the impact for those past periods is recognised in profit or loss immediately.
Furthermore, the change in the TLTRO rate driven by changes in expectations of meeting the targets
impacts interest income. As a result, interest income which relates to the period that already passed until
the moment when the change in expectations occurs, is recognised as a catch up adjustment in
Consolidated statement of profit or loss. This change occurs only when ING Group has a reasonable
expectation that the lending targets will be met.
ING Group views \u2018reasonable expectation\u2019 in case of TLTRO funding as a high hurdle. This is the moment
when it becomes highly probable, i.e. the probability of meeting the lending targets is substantially greater
than the probability that it will not. As a result, if interest income is recognised during the period based on
the expectation of meeting the targets, there should only be a limited possibility that the interest may need
to be reversed in future reporting periods. Reference is made to note 12 \u2018Deposits from banks\u2019 and to note
20 \u2018Net interest income\u2019 for the presentation of ING Group\u2019s participation in TLTRO programmes.
Significant judgements:
Significant management judgement is exercised in determining the accounting treatment of TLTRO
transactions. In particular, ING Group applied judgement in:
\u2022 assessing and concluding that in ING Group\u2019s view the rate under TLTRO is considered to be a market
conforming rate and, hence, accounting for TLTRO in accordance with IFRS 9;
\u2022 selecting accounting policies regarding the calculation of the effective interest rate under TLTRO.
1.6\u00a0 Consolidation
ING Group comprises ING Groep N.V. (the Parent Company), ING Bank N.V. and all other subsidiaries.
Subsidiaries are entities controlled by ING Groep N.V. Control exists if ING Groep N.V. is exposed to or has
rights to variable returns and has the ability to affect those returns through the power over the subsidiary.
For interests in structured entities, the existence of control requires judgement as these entities are
designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. This
judgement includes, for example, the involvement in the design of the structured entity, contractual
arrangements that give rights to direct the structured entities relevant activities and commitment to ensure
that the structured entity operates as designed.
Transactions between ING Groep N.V. and its subsidiaries are eliminated on consolidation. Reference is
made to Note 44 'Principal subsidiaries, investments in associates and joint ventures' for a list of principal
subsidiaries and their statutory place of incorporation and a description of ING's activities involving
structured entities is included in Note 45 'Structured entities'.
A list containing the information referred to in Section 379 (1), Book 2 of the Dutch Civil Code has been filed
with the office of the Commercial Register of Amsterdam, in accordance with Section 379 (5), Book 2 of the
Dutch Civil Code.
ING Groep N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company\u2019s own funds over the sum of the
paid-up capital and reserves required by law. Certain Group companies are also subject to other restrictions
in certain countries, in addition to the restrictions on the amount of funds that may be transferred in the
form of dividends, or otherwise, to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which the subsidiaries operate, other limitations exist in certain
countries.
1.7\u00a0 Segment reporting
An operating segment is a distinguishable component of ING Group, engaged in providing products or
services, whose operating results are regularly reviewed by the Executive Board of ING Group and the
Management Board Banking (together the Chief Operating Decision Maker (CODM)) to make decisions about
resources to be allocated to the segments and assess its performance. A geographical area is a
distinguishable component of ING Group engaged in providing products or services within a particular
economic environment that is subject to risks and returns that differ from those of segments operating in
other economic environments.
The CODM reviews and assesses ING Group's performance primarily by line of business. As a result, ING
identified five operating segments which are also disclosed as reportable segments. Additionally, the CODM
receives information by geographical area based on the location of the office from which transactions are
originated.
1.8\u00a0 Hyperinflation accounting
Since the second quarter of 2022, T\u00fcrkiye has been considered a hyperinflationary economy for accounting
purposes. As ING Group has a subsidiary in T\u00fcrkiye, ING Group has applied IAS 29 \u2018Financial Reporting in
Hyperinflationary Economies\u2019 to its operations since 2022 as if the economy in T\u00fcrkiye had always been
hyperinflationary. Given that ING Group presents its results in EUR, comparatives do not get restated. As a
result, 2021 comparatives were not impacted by IAS 29, while 2022 comparatives show the impact of the
first-time application of IAS 29, as well as the effect for 2022. IAS 29 continued to be relevant for ING\u2019s
operations in T\u00fcrkiye in 2023. Under IAS 29, the results of the operations in T\u00fcrkiye should be stated in
terms of the current purchasing power at the reporting date. For that, the consumer price index (CPI) as
determined by the Turkish Statistical Institute was used. The CPI for T\u00fcrkiye (2003=100) at 31 December
2023 was 1,859.38 and at 31 December 2022 was 1,128.45 (movement 2023: 64.77%; movement 2022:
64.27%). The effect of such restatement for inflation in the current period of the statement of
comprehensive income and the balance sheet has been recognised in the statement of profit or loss within
\u2018Other net income\u2019 as a \u2018Net monetary gain or loss\u2019. The net monetary loss for the period represents the loss
of purchasing power by the net monetary position (monetary assets exceeding monetary liabilities) of ING
T\u00fcrkiye.
After the application of the above restatement procedures in Turkish Lira under IAS 29, the financial position
and the results for the period of ING T\u00fcrkiye are translated and presented in EUR at the exchange rate on 31
December 2023. For the statement of comprehensive income this is in contrast with the usual translation
procedures where items of comprehensive income are translated at the exchange rate at the date of
transaction. Furthermore, ING Group selected to present both the restatement effect resulting from
restating ING Group\u2019s interest in the equity of ING T\u00fcrkiye as required by IAS 29, and the translation effect
from translating at a closing rate that differs from the previous closing rate, in the Currency translation
reserve.
1.9\u00a0 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of ING Group\u2019s entities are measured using the currency
of the primary economic environment in which the entity operates (the functional currency). The
Consolidated financial statements are presented in euros, which is ING Group\u2019s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing
at the date of the transactions. Exchange rate differences resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement of profit or loss, except when deferred in
equity as part of qualifying cash flow hedges or qualifying net investment hedges.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
Exchange rate differences on non-monetary items, measured at fair value through profit or loss, are
reported as part of the fair value gain or loss. Non-monetary items are retranslated at the date the fair
value is determined. Exchange rate differences on non-monetary items measured at fair value through
other comprehensive income are included in other comprehensive income and get accumulated in the
revaluation reserve in equity.
Exchange rate differences in the statement of profit or loss are generally included in \u2018Valuation results and
net trading income\u2019. Reference is made to Note 22 \u2018Valuation results and net trading income\u2019, which
discloses the amounts included in the statement of profit or loss. Exchange rate differences relating to the
disposal of debt and FVPL equity securities are considered to be an inherent part of the capital gains and
losses recognised in Investment income. As mentioned below, in Group companies relating to the disposals
of group companies, any exchange rate difference deferred in equity is recognised in the statement of profit
or loss in \u2018Result on disposal of group companies\u2019. Reference is also made to Note 19 \u2018Equity\u2019, which discloses
the amounts included in the statement of profit or loss.
Group companies
The results and financial positions of all group companies that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
\u2022 Assets and liabilities are translated at the closing rate at the date of the statement of financial position;\u00a0
\u2022 Income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions). However, under hyperinflation
accounting, income and expenses of ING T\u00fcrkiye are translated at the closing rate; and
\u2022 All resulting exchange rate differences are recognised in a separate component of equity.\u00a0
On consolidation, exchange rate differences arising from the translation of a monetary item that forms part
of the net investment in a foreign operation, and of borrowings and other instruments designated as
hedges of such investments, are taken to shareholders\u2019 equity. When a foreign operation is sold, the
corresponding exchange rate differences are recognised in the statement of profit or loss as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at the exchange rate prevailing at the balance sheet
date.
1.10\u00a0 Investments in associates and joint ventures
Associates are all entities over which ING Group has significant influence but not control. Significant
influence is the ability to participate in the financial and operating policies of the investee. It generally
results from a shareholding of between 20% and 50% of the voting rights or through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;\u00a0
\u2022 Participation in the policymaking process; and\u00a0
\u2022 Interchange of managerial personnel.\u00a0
Joint ventures are entities over which ING Group has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Group\u2019s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Group\u2019s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Group\u2019s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Group and its associates and joint ventures are eliminated to
the extent of ING Group\u2019s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Group.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
1.11\u00a0 Property and equipment
Property in own use
Land and buildings held for own use are stated at fair value at the balance sheet date. Depreciation is
recognised on a straight-line basis over the estimated useful life (in general 20\u201350 years). On disposal, the
related revaluation reserve is transferred to retained earnings.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the
assets is depreciated on a straight line basis over their estimated useful lives, which are generally as follows:
for data processing equipment two to five years, and four to ten years for fixtures and fittings.
Disposals of property and equipment
The difference between the proceeds on disposal and net carrying value is recognised in the statement of
profit or loss under Other net income.
Right-of-use assets
ING Group as the lessee
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a corresponding liability representing its obligation to make lease payments at the date at which the
leased asset is available for use by ING Group. Each lease payment is allocated between the repayment of
the liability and finance cost. The finance costs are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
\u2022 Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
\u2022 Variable lease payments that are based on an index or a rate;
\u2022 Amounts expected to be payable by the lessee under residual value guarantees;
\u2022 The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
\u2022 Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date less any lease incentives received
and any initial direct costs and restoration costs.
The right-of-use asset is included in the statement of financial position line-item \u2018Property and equipment\u2019,
the lease liability is included in the statement of financial position line-item \u2018Other liabilities\u2019. Refer to Note 9
\u2018Property and equipment\u2019 and to Note 16 \u2018Other liabilities\u2019.
Subsequent to initial recognition, the right-of-use asset amortises using a straight-line method to the
income statement over the life of the lease. The lease liability increases for the accrual of interest and
decrease when payments are made. Any remeasurement of the lease liability due to a lease modification
or other reassessment results in a corresponding adjustment to the carrying amount of the right-of-use
asset.
1.12\u00a0 ING Group as lessor
When ING Group acts as a lessor, a distinction should be made between finance leases and operating leases.
For ING Group as a lessor these are mainly finance leases and are therefore not included in 'Property and
equipment'. Instead, the present value of the lease payments is recognised as a receivable under Loans and
advances to customers or Loans and advances to banks. The difference between the gross receivable and
the present value of the receivable is unearned finance lease income. Lease income is recognised over the
term of the lease using the net investment method (before tax), which reflects a constant periodic rate of
return.
1.13\u00a0 Goodwill and other intangible assets
Impairment of goodwill and other non-financial assets
ING Group assesses at each reporting period, whether there is an indication that a non-financial asset may
be impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.
Computer software
Computer software that has been purchased or generated internally for own use is stated at cost less
amortisation and any impairment losses. Amortisation is calculated on a straight-line basis over its useful
life which generally does not exceed five years. Amortisation is included in Other operating expenses.
1.14\u00a0 Taxation
Income tax on the result for the year consists of current and deferred tax. Income tax is recognised in the
statement of profit or loss but it is recognised directly in equity if the tax relates to items that are recognised
directly in equity.
Uncertain tax positions are assessed continually by ING Group and in case it is probable that there will be a
cash outflow, a current tax liability is recognised.
Deferred income tax
Deferred income tax is provided in full, using the liability method, for temporary differences arising between
the tax basis of assets and liabilities and their carrying amounts in the Consolidated statement of financial
position. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted at the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities
are not discounted.
Deferred tax assets are recognised when it is probable that future taxable profit will be available against
which the temporary differences can be utilised. Deferred income tax is provided for temporary differences
arising from investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by ING Group and it is probable that the difference will not reverse in the
foreseeable future. The tax effects of income tax losses available for carry forward are recognised as an
asset where it is probable that future taxable profits will be available against which these losses can be
utilised.
Fair value remeasurements of debt and equity instruments measured at FVOCI and cash flow hedges are
recognised directly in equity. Deferred tax related to this fair value remeasurement is also recognised
directly in equity and is subsequently recognised in the statement of profit or loss together with the
deferred gain or loss.
1.15\u00a0 Provisions, contingent liabilities and contingent assets
A provision is a present obligation arising from past events, the settlement of which is expected to result in
an outflow of resources embodying economic benefits, however the timing or the amount is uncertain.
Provisions are discounted when the effect of the time value of money is significant using a pre-tax discount
rate.
Reorganisation provisions include employee termination benefits when ING Group is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.
A liability is recognised for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the liability is recognised
only upon reaching the specified minimum threshold.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of ING Group; or a present obligation that arises from past events but is not recognised
because it is either not probable that an outflow of economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility
of the outflow of economic benefits is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of ING Group. Contingent assets are recognised in the statement of financial position only when
realisation of the income that arises from such an asset is virtually certain. Contingent assets are disclosed
in the notes when an inflow of economic benefits is probable.
Significant judgements and critical accounting estimates and assumptions:
The recognition and measurement of provisions is an inherently uncertain process involving using
judgement to determine when a present obligation exists and estimates regarding probability, amounts
and timing of cash flows.
ING Group may become involved in governmental, regulatory, arbitration and legal proceedings and
investigations and may be subject to third party claims. With or without reference to the above, ING Group
may also offer compensation to certain of its customers. Judgement is required to assess whether a
present obligation exists and to estimate the probability of an unfavourable outcome and the amount of
potential loss. The degree of uncertainty and the method of making the accounting estimate depends on
the individual case, its nature and complexity. Such cases are usually one of a kind. For the assessment of
related provisions ING Group consults with internal and external legal experts. Even taking into
consideration legal experts\u2019 advice, the probability of an outflow of economic benefits can still be uncertain
and the provision recognised can remain sensitive to the assumptions used. Reference is made to Note 15
'Provisions'. For proceedings where it is not possible to make a reliable estimate of the expected financial
effect, that could result from the ultimate resolution of the proceedings, no provision is recognised,
however disclosure is included in the financial statements, where relevant. Reference is made to Note 42
'Legal proceedings'.
Critical accounting estimates and assumptions for the reorganisation provision are in estimating the
amounts and timing of cash flows as the announced transformation initiatives are implemented over a
period of several years. Reference is made to Note 15 'Provisions'.
1.16\u00a0 Irrevocable Payment Commitments on contributions to SRF and DGS
ING makes contributions to the Single Resolution Fund (SRF) and Deposit Guarantee Schemes (DGS). The
annual contributions are paid in cash or, in some cases, partly using Irrevocable Payment Commitments
(IPCs) that become payable if and when called. Cash contributions are accounted for as levies as described
in section 1.15 above while IPCs are disclosed as contingent liabilities in Note 41 'Contingent liabilities and
commitments'. Cash collateral posted on IPCs to the SRF is accounted for as an interest bearing financial
asset at amortised cost. Government bonds posted as collateral on IPCs to DGS continue to be recognised as
assets of ING as securities at amortised cost.
1.17\u00a0 Other liabilities
Defined benefit plans
The net defined benefit asset or liability recognised in the statement of financial position in respect of
defined benefit pension plans is the fair value of the plan assets less the present value of the defined benefit
obligation at the balance sheet date.
Changes in plan assets include mainly:
\u2022 Return on plan assets are recognised as staff costs in the statement of profit or loss. It is determined
using a high quality corporate bond rate (identical to the discount rate used in determining the defined
benefit obligation) at the start of the reporting period; and\u00a0
\u2022 Remeasurements which are recognised in Other comprehensive income.\u00a0
The defined benefit obligation is calculated by internal and external independent qualified actuaries through
actuarial models and calculations using the projected unit credit method. This method considers expected
future payments required to settle the obligation resulting from employee service in the current and prior
periods, discounted using a high quality corporate bond rate. Inherent in these actuarial models are
assumptions including discount rates, rates of increase in future salary and benefit levels, mortality rates,
consumer price index and the expected level of indexation. The assumptions are based on available market
data as well as management expectations and are updated regularly.\u00a0
Changes in the defined benefit obligation include mainly:
\u2022 Service cost which is recognised as staff costs in the statement of profit or loss;\u00a0
\u2022 Interest expenses are recognised as staff costs in the Statement of profit or loss. It is determined using a
high quality corporate bond rate at the start of the period;
\u2022 Remeasurements which are recognised in Other comprehensive income (equity) and not recycled to the
Statement of profit or loss;
\u2022 Any past service cost relating to a plan amendment is recognised in profit or loss in the period of the plan
amendment; and
\u2022 Gains and losses on curtailments and settlements are recognised in the Statement of profit or loss when
the curtailment or settlement occurs.
The recognition of a net defined benefit asset in the Consolidated statement of financial position is limited
to the present value of any economic benefits available in the form of refunds from the plans or reductions
in future contributions to the plans.
Defined contribution plans
For defined contribution plans, ING Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. ING Group has no further payment
obligations once the contributions have been paid. The contributions are recognised as staff expenses in the
profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Other post-employment obligations
Some group companies provide other post-employment benefits to former employees. The entitlement to
these benefits is usually conditional on the employee remaining in service up to retirement age and the
completion of a minimum service period. The expected costs of these benefits are accrued over the period
of employment using an accounting methodology similar to that for defined benefit pension plans.
1.18\u00a0 Treasury shares
Treasury shares (own equity instruments bought back by ING Group or its subsidiaries) are deducted from
Equity (Other reserves). No gain or loss is recognised in the statement of profit or loss when purchasing,
selling or cancelling these shares. Treasury shares are not taken into account when calculating earnings per
ordinary share or dividend per ordinary share as they are not considered to be outstanding.
Treasury shares can be purchased by ING as part of a share buyback programme. If a share buyback is
executed by a broker and the agreement with the broker is irrevocable, ING has a contractual obligation to
purchase its own shares that is unavoidable once it signs the agreement with the broker. This is the moment
when ING recognises a financial liability measured at the present value of the redemption amount with a
corresponding reduction in equity (Retained earnings). During the share buyback programme, ING settles
this liability for the actual purchase price paid for the shares bought on a daily basis. Actual shares bought
back and held by ING are presented as Treasury shares within Other reserves in equity.
1.19\u00a0 Income recognition
Interest
Interest income and expense are recognised in the statement of profit or loss using the effective interest
method. The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset or financial liability. When calculating the effective interest rate, ING Group
estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment
options) but does not consider future credit losses.
The calculation includes all fees and points paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs and all other premiums or discounts. Once a
financial asset or a group of similar financial assets has been written down as a result of an impairment loss,
interest income is recognised using the rate of interest used to discount the future cash flows for the
purpose of measuring the impairment loss.
Interest results on instruments classified at Amortised Cost, assets measured at FVOCI and derivatives in a
formal hedge accounting relationship is presented in \u2018Interest income (expense) using effective interest rate
method\u2019. Interest result on financial assets and liabilities voluntarily designated as at FVPL and derivatives in
so called economic hedges and instruments designated at fair value are presented in \u2018Other interest income
(expense)\u2019. Interest result on all other financial assets and liabilities at FVTPL is recognised in \u2018Valuation
results and net trading income\u2019.
Fees and commissions
Fees and commissions are generally recognised as the service is provided. Loan commitment fees for loans
that are likely to be drawn down are deferred (together with related direct costs) and recognised as an
adjustment to the effective interest rate on the loan. Loan syndication fees are recognised as income when
the performance obligation has been satisfied based on the particular contract and ING Group has retained
no part of the loan package for itself or has retained a part at the same effective interest rate as the other
participants. Commission and fees arising from negotiating, or participating in the negotiation of, a
transaction for a third party \u2013 such as the arrangement of the acquisition of shares or other securities or the
purchase or sale of businesses \u2013 are recognised on completion of the underlying transaction. Portfolio and
other management advisory and service fees are recognised based on the applicable service contracts as
the service is provided. Asset management fees related to investment funds and investment contract fees
are recognised on a pro-rata basis over the period the service is provided. The same principle is applied for
wealth management, financial planning and custody services that are continuously provided over an
extended period of time. Fees received and paid between banks for payment services are classified as
commission income and expenses.
Lease income
The proceeds from leasing out assets under operating leases are recognised on a straight-line basis over the
life of the lease agreement. Lease payments received in respect of finance leases when ING Group is the
lessor are divided into an interest component (recognised as interest income) and a repayment component
based on a pattern reflecting a constant periodic rate of return on the lessor\u2019s net investment in the lease.
1.20\u00a0 Expense recognition
Expenses are recognised in the statement of profit or loss as incurred or when a decrease in future
economic benefits related to a decrease in an asset or an increase in a liability has arisen that can be
measured reliably. Fee and commission expenses are generally a result from a contract with ING service
providers in order to perform the service for ING Group\u2019s customers. Costs are generally presented as
\u2018Commission expenses\u2019 if they are specific, incremental, directly attributable and identifiable to generate
commission income.\u00a0
Share-based payments
ING Group only engages in share-based payment transactions with its staff and directors. Share-based
payment expenses are recognised as a staff expense over the vesting period. A corresponding increase in
equity is recognised for equity-settled share-based payment transactions. A liability is recognised for cash-
settled share-based payment transactions. The fair value of equity-settled share-based payment
transactions are measured at the grant date, and the fair value of cash-settled share-based payment
transactions are measured at each balance sheet date. Rights granted will remain valid until the expiry
date, even if the share based payment scheme is discontinued. The rights are subject to certain conditions,
including a pre-determined continuous period of service.
1.21\u00a0 Earnings per ordinary share
Earnings per ordinary share is calculated on the basis of the weighted average number of ordinary shares
outstanding. In calculating the weighted average number of ordinary shares outstanding:
\u2022 Own shares held by group companies are deducted from the total number of ordinary shares in issue;\u00a0
\u2022 The computation is based on daily averages; and
\u2022 In case of exercised warrants, the exercise date is taken into consideration.\u00a0
Diluted earnings per share data are computed as if all convertible instruments outstanding at year-end
were exercised at the beginning of the period. It is also assumed that ING Group uses the assumed proceeds
thus received to buy its own shares against the average market price in the financial year. The net increase
in the number of shares resulting from the exercise is added to the average number of shares used to
calculate diluted earnings per share.
1.22\u00a0 Statement of cash flows
The statement of cash flows is prepared in accordance with the indirect method, distinguishing cash flows
from operating, investing and financing activities. In the net cash flow from operating activities, the result
before tax is adjusted for those items in the statement of profit or loss and changes in items per the
statement of financial position, which do not result in actual cash flows during the year.
For the purposes of the statement of cash flows, Cash and cash equivalents include deposits from banks and
loans and advances to banks that are on demand. Furthermore, it includes treasury bills and other eligible
bills shorter than three months. Investments qualify as a cash equivalent if they are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value.
Cash flows arising from foreign currency transactions are translated into the functional currency using the
exchange rates at the date of the cash flows.
The net cash flow shown in respect of Loans and advances to customers relates only to transactions
involving actual payments or receipts. The Addition to loan loss provision which is deducted from the item
Loans and advances to customers in the statement of financial position has been adjusted accordingly from
the result before tax and is shown separately in the statement of cash flows.
The difference between the Net cash flow in accordance with the statement of cash flows and the change
between the opening and closing balance of Cash and cash equivalents in the statement of financial
position is due to exchange rate differences and is presented separately in the cash flow statement.
Liabilities arising from financing activities are debt securities, lease liabilities and subordinated loans.
2023, ING Groep N.V. issued 0.0 million ordinary shares (2022: 2.9 million and in 2021: 3.4 million ordinary
shares). In 2022 and 2021, shares were issued in order to fund obligations arising from share-based
employee incentive programmes. As from 2023 these shares are repurchased from the market. The
cancellation of shares relate to the shares purchased under the share buyback programmes (reference is
made to 'Ordinary shares held by ING Group (treasury shares)').
As at 31\u00a0December 2023 , ING Groep N.V. has issued USD 7,750 million (2022: USD 6,750 million) Perpetual
Additional Tier 1 Contingent Convertible Capital Securities which can, in accordance with their terms and
conditions, convert by operation of law into ordinary shares if the conditions to such a conversion are
fulfilled. As a result of this conversion, the issued share capital can increase by up to 864 million (2022: 750
million) ordinary shares. Reference is made to Note 18 'Subordinated loans'.
Ordinary shares
All ordinary shares are registered. No share certificates have been issued. The par value of ordinary shares is
EUR 0.01. The authorised ordinary share capital of ING Groep N.V. currently consists of 9,142 million ordinary
shares. As at 31\u00a0December 2023, 3,498 million ordinary shares were issued and fully paid.
Ordinary shares held by ING Group (Treasury shares)
As at 31\u00a0December 2023, 154.6 million ordinary shares (2022: 107.4 million and 2021: 128.3 million) of ING
Groep N.V. with a par value of EUR 0.01 are held by ING Groep N.V. or its subsidiaries.
46\u00a0 Related parties
In the normal course of business, ING Group enters into various transactions with related parties. Parties are
considered to be related if one party has the ability to control or exercise significant influence over the other
party in making financial or operating decisions. Related parties of ING Group include, among others, its
associates, joint ventures, key management personnel, and various defined benefit and contribution plans.
For post-employment benefit plans, reference is made to Note 33 'Pensions and other post-employment
benefits' Transactions between related parties include rendering or receiving of services, leases, transfers
under finance arrangements and provisions of guarantees or collateral. All transactions with related parties
took place at conditions customary in the market. There are no significant provisions for doubtful debts or
individually significant bad debt expenses recognised on outstanding balances with related parties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-625": { "value": "
Cash and cash equivalents includes deposits from banks and loans and advances to banks that are payable
on demand.
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-627": { "value": "
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which the subsidiaries operate, other limitations exist in certain
countries.
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1.1\u00a0 Reporting entity and authorisation of the Consolidated financial statements
ING Groep N.V. (Naamloze vennootschap) is a company domiciled in Amsterdam, the Netherlands.
Commercial Register of Amsterdam, number 33231073. These Consolidated financial statements, as at and
for the year ended 31\u00a0December 2023, comprise ING Groep N.V. (the Parent company) and its subsidiaries,
together referred to as ING Group. ING Group is a global financial institution with a strong European base,
offering a wide range of retail and wholesale banking services to customers in over 40 countries. \u00a0
The ING Group Consolidated financial statements, as at and for the year ended 31\u00a0December 2023, were
authorised for issue in accordance with a resolution of the Executive Board on 4 March 2024. The Executive
Board has the power to amend the financial statements as long as these are not adopted by the General
Meeting of Shareholders. The General Meeting of the Shareholders may decide not to adopt the financial
statements, but may not amend these.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-644": { "value": "ING Groep N.V.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-645": { "value": "Naamloze vennootschap", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-646": { "value": "Amsterdam, the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-647": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-648": { "value": "ING Group is a global financial institution with a strong European base, offering a wide range of retail and wholesale banking services to customers in over 40 countries.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-649": { "value": "
The ING Group Consolidated financial statements, as at and for the year ended 31\u00a0December 2023, were
authorised for issue in accordance with a resolution of the Executive Board on 4 March 2024. The Executive
Board has the power to amend the financial statements as long as these are not adopted by the General
Meeting of Shareholders. The General Meeting of the Shareholders may decide not to adopt the financial
statements, but may not amend these", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-650": { "value": "
The ING Group Consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the relevant articles of Part
9 of Book 2 of the Dutch Civil Code.
IFRS as adopted by the EU are IFRS Standards and IFRS Interpretations as issued by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) with some limited
modifications such as the temporary \u2018carve-out\u2019 from IAS 39 \u2018Financial Instruments: Recognition and
Measurement\u2019 (herein, referred to as IFRS).
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-651": { "value": "
1.3\u00a0 Changes to accounting policies and presentation
ING Group has consistently applied its accounting policies to all periods presented in these Consolidated
financial statements.
In 2023, ING Group updated the presentation in Note 13 'Customer deposits' to improve consistency and
comparability. Comparative figures for 2022 have been updated accordingly.
1.3.1\u00a0 Changes in IFRS effective in 2023
ING Group had the following changes in accounting policies in the current reporting period:
IFRS 17 \u2018Insurance Contracts\u2019
IFRS 17, a new accounting standard for insurance contracts covering recognition and measurement,
presentation and disclosure requirements, became effective on 1 January 2023. IFRS 17 replaces IFRS 4
\u2018Insurance Contracts\u2019, which allowed diversity in accounting practices for insurance contracts. IFRS 17
includes an optional scope exclusion for loans with death waivers.
ING Group does not have an insurance business, but on a limited basis sells insurance products as a broker
where it does not run the insurance risk, hence such contracts are not in scope of IFRS 17. However, ING
Group has a portfolio of loans with death waivers in the Netherlands with a net carrying amount of EUR 743
million at 1 January 2023. While IFRS 4 allowed separation of such contracts into two components in the
past (a loan in scope of IFRS 9 \u2018Financial Instruments\u2019 measured at amortised cost and an insurance contract
for the death waiver feature in scope of IFRS 4), IFRS 17 no longer allows such separation and requires such
instruments to be accounted for in their entirety using either IFRS 9 or IFRS 17.
ING Group chooses to apply IFRS 9 \u2019Financial Instruments\u2019 to such loans with death waivers. As a result, this
portfolio no longer meets the \u2018solely payments of principal and interest\u2019 (SPPI) criterion. This causes the
portfolio to be measured at fair value through profit or loss instead of amortised cost from 1 January 2023.
This reclassification led to EUR -13 million impact on the opening total equity at 1 January 2023. Therefore,
the financial impact of IFRS 17 on ING Group is limited.
Accounting treatment of non-financial guarantees
ING Group changed its accounting policy for non-financial guarantees that are subject to contractual
indemnification rights (such as performance and other non-financial guarantees as well as letters of credit)
from IAS 37 principles to loan commitment accounting under IFRS 9. The re-scoping was triggered by the
introduction of IFRS 17 Insurance contracts and results in reliable and more relevant information,
particularly when credit risk is elevated as IFRS 9 expected credit losses model captures that risk earlier than
IAS 37. This voluntary policy change had a limited impact on ING\u2019s opening total equity of EUR -33 million.
Other changes in IFRS effective in 2023 (endorsed by the EU):
The following amendments to IFRS became effective in the current reporting period with no significant
impact for ING:
\u2022 Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019: Disclosure of Accounting Policies (issued in
February 2021).
\u2022 Amendments to IAS 8 \u2018Accounting Policies, Changes in Accounting Estimates and Errors\u2019: Definition of
Accounting Estimates (issued in February 2021).
\u2022 Amendments to IAS 12 \u2018Income Taxes\u2019: Deferred Tax Related to Assets and Liabilities Arising From a
Single Transaction (issued in May 2021).
\u2022 Amendments to IAS 12 'Income Taxes': International Tax Reform - Pillar Two Model Rules. These
amendments allow ING Group to scope out Pillar Two model rules from the deferred tax recognition and
related disclosure requirements. More information on ING Group\u2019s exposure to Pillar Two model rules is
included in Note 31 'Information on geographical areas'.
1.3.2\u00a0 Upcoming changes in IFRS after 2023
The following published amendments are not mandatory for 2023 and have not been early adopted by ING
Group. The implementation of these amendments is expected to have no significant impact on ING Group's
Consolidated financial statements when they become effective.
Effective in 2024 (endorsed by the EU):
\u2022 Amendments to IFRS 16 'Leases': Lease Liability in a Sale and Leaseback (issued in September 2022).
\u2022 Amendments to IAS 1 \u2018Presentation of Financial Statements\u2019: Classification of Liabilities as Current or
Non-current (issued in January 2020).
Effective in 2024 (not yet endorsed by the EU):
\u2022 Amendments to IAS 7 'Statement of Cash flows' and IFRS 7 'Financial Instruments: Disclosures': Supplier
Finance Arrangements (issued in May 2023).
Effective in 2025 (not yet endorsed by the EU):
\u2022 Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates': Lack of Exchangeability
(issued in August 2023).
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-652": { "value": "
1.3\u00a0 Changes to accounting policies and presentation
ING Group has consistently applied its accounting policies to all periods presented in these Consolidated
financial statements.
In 2023, ING Group updated the presentation in Note 13 'Customer deposits' to improve consistency and
comparability. Comparative figures for 2022 have been updated accordingly.", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-653": { "value": "
1.4\u00a0 Significant judgements and critical accounting estimates and assumptions
The preparation of the Consolidated financial statements requires management to make judgements in the
process of applying its accounting policies and to use estimates and assumptions. The estimates and
assumptions affect the reported amounts of the assets and liabilities and the amounts of the contingent
assets and contingent liabilities at the balance sheet date, as well as reported income and expenses for the
year. The actual outcome may differ from these estimates. The process of setting assumptions is subject to
internal control procedures and approvals.
ING Group has identified areas that require management to make significant judgements and use critical
accounting estimates and assumptions based on the information and financial data that may or may not
change in future periods. These areas are:
\u2022 Loan loss provisions (financial assets) (refer to Note 1.5.6 \u2018Impairment of financial assets');
\u2022 The determination of the fair values of financial assets and liabilities (refer to Note 1.5.3 for \u2018Fair values of
financial assets and liabilities\u2019);
\u2022 Investment in associate - assessment of additional impairment losses or reversal of previous impairment
losses (refer to Note 1.10 \u2018Investments in associates and joint ventures);
\u2022 Provisions (refer to Note 1.15 \u2018Provisions, contingent liabilities and contingent assets\u2019); and
\u2022 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO) (refer to Note 1.5.8 \u2018Accounting for
Targeted Longer-Term Refinancing Operations (TLTRO)').
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-654": { "value": "
1.5\u00a0 Financial instruments
ING Group applies IFRS 9 \u2018Financial Instruments\u2019 to the recognition, classification and measurement, and
derecognition of financial assets and financial liabilities and the impairment of financial assets. ING Group
applies the requirements of IAS 39 \u2018Financial Instruments: Recognition and Measurement\u2019 for hedge
accounting purposes.
1.5.1\u00a0 Recognition and derecognition of financial instruments
Recognition of financial assets
Financial assets are recognised in the balance sheet when ING Group becomes a party to the contractual
provisions of the instrument. For a regular way purchase or sale of a financial asset, trade date and
settlement date accounting is applied depending on the classification of the financial asset.
Derecognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where ING Group has transferred the rights to receive the cash flows from the financial asset or
assumed an obligation to pass on the cash flows and has transferred substantially all the risks and rewards
of the asset. If ING Group neither transfers nor retains substantially all the risks and rewards of ownership of
a financial asset, it derecognises the financial asset if it no longer has control over the asset. The difference
between the carrying amount of a financial asset that has been derecognised and the consideration
received is recognised in profit or loss.
Recognition of financial liabilities
Financial liabilities are recognised on the date that the entity becomes a party to the contractual provisions
of the instrument.
Derecognition of financial liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished and
the consideration paid is recognised in profit or loss.
1.5.2\u00a0 Classification and measurement of financial instruments
Financial assets
ING Group classifies its financial assets in the following measurement categories:
\u2022 those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
\u2022 those to be measured at amortised cost (AC).
At initial recognition, ING Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss (FVPL) are expensed in the
statement of profit or loss.
Financial assets \u2013 Debt instruments
The classification depends on the entity\u2019s business model for managing the financial assets and the
contractual terms of the cash flows at initial recognition.
Business models
Business models are classified as Hold to Collect (HtC), Hold to Collect and Sell (HtC&S) or Other depending
on how a portfolio of financial instruments as a whole is managed. ING Group\u2019s business models are based
on the existing management structure of the bank, and refined based on an analysis of how businesses are
evaluated and reported, how their specific business risks are managed and on historic and expected future
sales. Sales are permissible in a HtC business model when these are due to an increase in credit risk, take
place close to the maturity date (where the proceeds from the sales approximate the collection of the
remaining contractual cash flows), are insignificant in value (both individually and in aggregate) or are
infrequent.
Contractual cash flows Solely Payments of Principal and Interest (SPPI)
The contractual cash flows of a financial asset are assessed to determine whether they represent SPPI.
Interest includes consideration for the time value of money, credit risk and for other basic lending risks such
as consideration for liquidity risk and costs associated with holding the financial asset for a particular period
of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are SPPI.
In assessing whether the contractual cash flows are SPPI, ING Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition.
Based on the entity\u2019s business model for managing the financial assets and the contractual terms of the
cash flows, there are three measurement categories into which ING Group classifies its debt instruments:
\u2022 Amortised Cost (AC):
Debt instruments that are held for collection of contractual cash flows under a HtC business model where
those cash flows represent SPPI are measured at AC. Interest income from these financial assets is
included in Interest income using the Effective Interest Rate (EIR) method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVOCI:
Debt instruments that are held for collection of contractual cash flows and for selling the financial assets
under a HtC&S business model, where the assets\u2019 cash flows represent SPPI, are measured at FVOCI.
Movements in the carrying amount are recognised in OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and presented in Investment income or Other net income, based
on the specific characteristics of the business model. Interest income from these financial assets is
included in Interest income using the EIR method. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Group may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo\u2019s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
ING Group reclassifies debt instruments if, and only if, its business model for managing those financial
assets changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
Repurchase transactions and reverse repurchase transactions
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the Consolidated statement of financial position. The counterparty liability is
measured at FVPL (designated) and included in Other financial liabilities at FVPL if the asset is measured at
FVPL. Otherwise, the counterparty liability is included in Deposits from banks, Customer deposits, or Trading,
as appropriate.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the Consolidated statement of financial position. The consideration paid
to purchase securities is recognised as Loans and advances to customers, Loans and advances to banks,
Other financial assets at FVPL or Trading assets, as appropriate. The difference between the sale and
repurchase price is treated as interest and amortised over the life of the agreement using the effective
interest method for instruments that are not measured at FVPL.
1.5.3\u00a0 Fair values of financial assets and liabilities
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a \u2018Day One Profit or Loss\u2019) is deferred. ING Group defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Group recognises the difference as a
gain or loss at inception.
Subsequently, except for financial assets and financial liabilities measured at amortised cost, all the other
financial assets and liabilities are measured at fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. It assumes that market
participants would use and take into account the characteristics of the asset or liability when pricing the
asset or liability. Fair values of financial assets and liabilities are based on unadjusted quoted market prices
where available. Such quoted market prices are primarily obtained from exchange prices for listed financial
instruments. Where an exchange price is not available, quoted prices in an active market may be obtained
from independent market vendors, brokers, or market makers. In general, positions are valued at the bid
price for a long position and at the offer price for a short position or are valued at the price within the bid-
offer spread that is most representative of fair value in the circumstances. In some cases where positions
are marked at mid-market prices, a fair value adjustment is calculated.
For certain financial assets and liabilities, quoted market prices are not available. For such instruments, fair
value is determined using valuation techniques. These range from discounting of cash flows to various
valuation models, where relevant pricing factors including the market price of underlying reference
instruments, market parameters (volatilities, correlations and credit ratings), and customer behaviour are
taken into account. ING Group maximises the use of market observable inputs and minimises the use of
unobservable inputs in determining the fair value. It can be subjective dependent on the significance of the
unobservable input to the overall valuation. All valuation techniques used are subject to internal review and
approval. Most data used in these valuation techniques are validated on a daily basis when possible.
When a group of financial assets and liabilities are managed on the basis of their net risk exposures, the fair
value of a group of financial assets and liabilities are measured on a net portfolio level.
To include credit risk in fair value, ING Group applies both Credit and Debit Valuation Adjustments (CVA, DVA,
also known as Bilateral Valuation Adjustments or BVA). Own issued debt and structured notes that are
designated at FVPL are adjusted for ING Group\u2019s own credit risk by means of a DVA. To include the funding
risk, ING Group applies an additional \u2018Funding Valuation Adjustment\u2019 (FVA) to the uncollateralised derivatives
based on the market price of funding liquidity.ING Group also applies to certain positions other valuation
adjustments to arrive at the fair value: Bid-Offer adjustments, Model Risk Adjustments and Collateral
Valuation Adjustments (CollVA).
Significant judgements and critical accounting estimates and assumptions:
\u2022 Even if market prices are available, when markets are less liquid there may be a range of prices for the
same security from different price sources. Selecting the most appropriate price requires judgement
and could result in different estimates of fair value.\u00a0
\u2022 Valuation techniques are subjective in nature and significant judgement is involved in establishing fair
values for certain financial assets and liabilities. Valuation techniques involve various assumptions
regarding pricing factors. The use of different valuation techniques and assumptions could produce
significantly different estimates of fair value.\u00a0
\u2022 Price testing is performed to assess whether the process of valuation has led to an appropriate fair
value of the position and to minimise the potential risks of economic losses due to incorrect or misused
models.
\u2022 Assessing whether a market is active, and whether an input is observable and significant, requires
judgement. ING Group categorises its financial instruments that are either measured in the statement
of financial position at fair value or of which the fair value is disclosed, into a three-level hierarchy
based on the observability and significance of the valuation inputs. The use of different approaches to
assess whether a market is active, whether an input is observable, and whether an unobservable input
is significant could produce different classification within the fair value hierarchy as well as potentially
different deferral of the Day One Profit or Loss.
\u2022 Reference is made to Note 35 'Fair value of assets and liabilities ' and to the \u2018Market risk\u2019 paragraph in
the \u2018Risk management\u2019 section of the Annual Report for the basis of the determination of the fair value
of financial instruments and related sensitivities.
1.5.4\u00a0 Derivatives and hedge accounting
IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to
continue with hedge accounting under IAS 39. ING Group decided to exercise this accounting policy choice
and did not adopt IFRS 9 hedge accounting as of 1 January 2018. Furthermore, ING Group applies fair value
hedge accounting for portfolio hedges of interest rate risk (macro fair value hedges) in accordance with the
EU carve-out version of IAS 39.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently measured at fair value. Fair values are obtained from quoted market prices in active
markets, including market transactions and valuation techniques (such as discounted cash flow models and
option pricing models), as appropriate. All derivatives are carried as assets when their fair value is positive
and as liabilities when their fair value is negative. Fair value movements on derivatives are presented in
profit or loss in Valuation result and net trading income, except for derivatives in either a formal hedge
relationship and so-called economic hedges that are not in a formal hedge accounting relationship where a
component is presented separately in interest result in line with ING Group\u2019s risk management strategy.
Embedded derivatives are separated from financial liabilities and other non-financial contracts and
accounted for as a derivative if, and only if:
1. the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
2. a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and
3. the combined instrument is not measured at fair value with changes in fair value reported in profit or
loss.
If an embedded derivative is separated, the host contract is accounted for as a similar free-standing
contract.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. ING Group designates
certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair
value hedge), hedges of highly probable future cash flows attributable to a recognised asset or liability or a
forecast transaction (cash flow hedge), or hedges of a net investment in a foreign operation. Hedge
accounting is used for derivatives designated in this way provided certain criteria are met.
At the inception of the transaction, ING Group documents the relationship between hedging instruments
and hedged items, its risk management objective, together with the methods selected to assess hedge
effectiveness. ING Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition \u2013 specific policies for hedges directly affected by IBOR reform
As explained in the \u2018IBOR Transition\u2019 paragraph of the \u2018Risk management\u2019 section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Group to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
\u2022 Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
\u2022 Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
\u2022 Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
\u2022 Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Group hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Group hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Group as at 31 December 2023 (mainly for WIBOR hedges).
ING Group will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note \u2018Risk management/ IBOR Transition\u2019 for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Group\u2019s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. Particularly,\u00a0
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2023, Phase 2
continued to be relevant for ING Group when ING actually transitioned its financial instruments (designated
in hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
\u2022 Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,
the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
\u2022 When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
\u2022 When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
\u2022 For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
\u2022 Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
Non-trading derivatives that do not qualify for hedge accounting
Derivative instruments that are used by ING Group as part of its risk management strategies, but which do
not qualify for hedge accounting under ING Group\u2019s accounting policies, are presented as non-trading
derivatives. Non-trading derivatives are measured at fair value with changes in the fair value taken to the
statement of profit or loss.
1.5.5\u00a0 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the statement of
financial position when ING Group has a current legally enforceable right to set off the recognised amounts
and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.
Offsetting is applied to certain derivatives for which the services of a central clearing house or broker are
used.
1.5.6\u00a0 Impairment of financial assets
An Expected Credit Loss (ECL) model is applied to financial assets accounted for at AC or FVOCI such as
loans, debt securities and lease receivables, as well as off-balance sheet items such as undrawn loan
commitments, certain financial guarantees issued, and undrawn committed revolving credit facilities. Under
the ECL model, ING Group calculates the expected credit losses (ECL) by considering on a discounted basis
the cash shortfall it would incur in case of a default and multiplying the shortfall by the probability of a
default occurring. The ECL is the sum of the probability-weighted outcomes. The ECL estimates are unbiased
and include reasonable and supportable information about past events, current conditions, and forecasts of
future economic conditions. ING Group\u2019s approach leverages the Advanced Internal Ratings Based (AIRB)
models that are used for regulatory purposes. Adjustments are applied to make these models suitable for
determining ECL. ECL is recognised on the balance sheet as loan loss provisions (LLP).
Three-stage approach
Financial assets are classified in one of the below three stages at each reporting date. A financial asset can
move between stages during its lifetime. The stages are based on changes in credit quality since initial
recognition and defined as follows:
\u2022 Stage 1
Financial assets that have not had a significant increase in credit risk since initial recognition (i.e. no
Stage 2 or 3 triggers apply). Assets are classified as Stage 1 upon initial recognition (with the exception of
purchased or originated credit impaired (POCI) assets) and ECL is determined by the probability that a
default occurs in the next 12 months (12 months ECL);
\u2022 Stage 2
Financial assets showing a significant increase in credit risk since initial recognition. For assets in Stage 2
ECL reflects an estimate on the credit losses over the remaining maturity of the asset (lifetime ECL); or
\u2022 Stage 3
Financial assets that are credit-impaired. Also for these assets ECL is determined over the remaining
maturity of the asset.
Significant increase in credit risk
ING Group established a framework, incorporating quantitative and qualitative indicators, to identify and
assess significant increases in credit risk (SICR). This is used to determine the appropriate ECL Stage for each
financial asset.
The main determinate of SICR is a quantitative test, whereby the lifetime Probability of Default (PD) of an
asset at each reporting date is compared against its lifetime PD determined at the date of initial recognition.
If the delta is above pre-defined absolute or relative thresholds the item is considered to have experienced a
SICR. Furthermore, any facility which shows an increase of 200% between the PD at the date of initial
recognition and the lifetime PD at the reporting date (i.e. threefold increase in PD) must be classified as
Stage 2. This is considered a backstop within the quantitative assessment of SICR. Refer to \u2018Criteria for
identifying a significant increase in credit risk\u2019 in the \u2018Risk Management\u2019 section of the Annual Report for
more details on relative and absolute PD thresholds, including quantitative disclosures on those thresholds.
Consequently, if the above quantitative SICR thresholds are exceeded, the item moves from Stage 1 to Stage
2 (unless the item is credit-impaired). In these instances, items are no longer assigned a 12-month ECL and
instead are assigned a lifetime ECL. Items can return to Stage 1 if there is sufficient evidence that there is no
longer a significant increase in credit risk.
ING Group also relies on a number of qualitative indicators to identify and assess SICR. These include:
\u2022 Forbearance status;
\u2022 Watch List status;
\u2022 Intensive care management;
\u2022 Collective SICR assessment;
\u2022 Substandard Internal rating; and
\u2022 Arrears status (including 30 days past due used as a backstop).
An asset that is in Stage 2 will move back to Stage 1 when none of the above criteria are in place anymore.
However, if the asset was moved to Stage 2 based on the forbearance status, then the asset stays in Stage
2 for at least 24 months. If the asset was classified as Stage 2 due to 30 days past due trigger, then the
asset is moved back to Stage 1 only after three months from when the trigger no longer applies.
Credit-impaired financial assets (Stage 3)
Financial assets are assessed for credit-impairment at each reporting date and more frequently when
circumstances warrant further assessment. Evidence of credit-impairment includes arrears of over 90 days
on any material credit obligation, indications that the borrower is experiencing significant financial difficulty,
a breach of contract, bankruptcy or distressed restructuring. The definition of credit-impaired under IFRS 9
(Stage 3) is aligned with the definition of default used by ING Group for internal risk management purposes,
which is also the definition used for regulatory purposes.
An asset (other than a POCI asset) that is in Stage 3 will move back to Stage 2 when, as at the reporting
date, it is no longer considered to be credit-impaired subject to certain probation periods. The asset will
migrate back to Stage 1 when its credit risk at the reporting date is no longer considered to have increased
significantly since initial recognition.
Macroeconomic scenarios
ING Group has established a quarterly process whereby forward-looking macroeconomics scenarios and
probability weightings are developed for the purpose of ECL. ING Group applies data predominantly from a
leading service provider enriched with the internal ING Group view. A baseline, up-scenario and a down-
scenario are determined to reflect an unbiased and probability-weighted ECL amount. As a baseline
scenario, ING Group applies the market-neutral view combining consensus forecasts for economic variables
such as unemployment rates, GDP growth, house prices, commodity prices, and short-term interest rates.
Applying market consensus in the baseline scenario ensures unbiased estimates of the expected credit
losses.
The alternative scenarios are based on observed forecast errors in the past, adjusted for the risks affecting
the economy today and the forecast horizon. The probabilities assigned are based on the likelihoods of
observing the three scenarios and are derived from confidence intervals on a probability distribution. The
forecasts for the economic variables are adjusted on a quarterly basis.
The probability weights applied to each of the three scenarios
ING Group uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and
downside). Management approach used to determine the weights of each scenario and in selecting the
parts of the distribution of forecast errors from which the weights are derived and disclosed in the
\u2018Alternative scenarios and probability weights\u2019 and the sensitivity analysis in the \u2018Risk Management\u2019 section
of the Annual Report.
Measurement of ECL
ING Group applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Group applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors\u2019 ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.
For the purpose of ECL, ING Group\u2019s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Group estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Group\u2019s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
Purchased or Originated Credit Impaired (POCI) assets
POCI assets are financial assets that are credit-impaired on initial recognition. Impairment on a POCI asset is
determined based on lifetime ECL from initial recognition. POCI assets are recognised initially at an amount
net of ECL and are measured at AC using a credit-adjusted effective interest rate. In subsequent periods any
changes to the estimated lifetime ECL are recognised in profit or loss. Favourable changes are recognised as
an impairment gain even if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at
origination.
Write-off and debt forgiveness
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovery and/or collectability of amounts due. The following events can lead to a write-off:
\u2022 After a restructuring has been completed and there is a high improbability of recovery of part of the
remaining loan exposure (including partial debt forgiveness);
\u2022 In a bankruptcy liquidation scenario;
\u2022 After divestment or sale of a credit facility at a discount; and
\u2022 Specific fraud cases with no recourse options.
When a loan is uncollectable, it is written off against the related loan loss provision. Subsequent recoveries
of amounts previously written off are recognised in \u2018Addition to loan loss provisions\u2019 in the Consolidated
statement of profit or loss.
Debt forgiveness (or debt settlement) involves write-off but additionally involves the forgiveness of a legal
obligation, in whole or in part. This means that ING Group forfeits the legal right to recover the debt. As a
result, the financial asset needs to be derecognised.
Presentation of ECL
ECL for financial assets measured at AC are deducted from the gross carrying amount of the assets. For
debt instruments at FVOCI, the ECL is recognised in OCI, instead of deducted the carrying amount of the
asset. ECL also reflects any credit losses related to the portion of the loan commitment that is expected to
be drawn down over the remaining life of the instrument. The ECL on issued financial guarantee contracts,
in scope of IFRS 9 and not measured at FVPL, are recognised as liabilities and presented in Other provisions.
ECL are presented in profit or loss in Addition to loan loss provision.
Significant judgements and critical accounting estimates and assumptions:
The calculation of ECL requires a number of judgements and estimates. In particular:
\u2022 ING Group makes various assumptions about the risk of default, the credit loss rates in case of a
default and expected future cash flows. For collective provisions, ING Group applies significant
judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection
and calibration of relevant models. For Stage 3 individual provisioning, the determination and
probabilities of restructuring and recovery scenarios as well as the amount and timing of expected
future cash flows may be particularly subjective.
\u2022 Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature.
The use of alternate forward-looking macroeconomic scenarios can produce significantly different
estimates of ECL. This is demonstrated in the sensitivity analysis in the \u2018Risk Management\u2019 section of
the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant
portfolios is disclosed.
\u2022 When determining whether the credit risk on a financial asset has increased significantly (criteria for
identifying a significant increase in credit risk), ING Group considers reasonable and supportable
information to compare the risk of default occurring at reporting date with the risk of a default
occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD
rating to each financial asset, there is significant judgement used in determining the Stage allocation
PD banding thresholds. The process of comparing a financial asset\u2019s PD with the PD banding thresholds
determines its ECL Stage. Assets in Stage 1 are allocated a 12-month ECL, and those in Stage 2 are
allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in
assigning financial asset PDs and the PD banding thresholds constitute a significant judgement.
Analysis of the sensitivity associated with the assessment of significant increase in credit risk is
presented in the \u2018Risk Management\u2019 section of the Annual Report.
\u2022 Judgement is exercised in management\u2019s evaluation of whether there is objective evidence that
exposures are credit-impaired.
\u2022 To reflect the risks that are not properly captured by the ECL models, a number of management
adjustments to the model-based ECL were necessary as at 31 December 2023, which required
significant judgement. Reference is made to the \u2018Management adjustments applied this year\u2019
paragraph in the \u2018Risk management\u2019 section of the Annual Report.
1.5.7\u00a0 Modification of financial instruments
In certain circumstances ING Group grants borrowers postponement, reduction of loan principal and/or
interest payments on a temporary period of time to maximise collection opportunities, and if possible, avoid
default, foreclosure, or repossession. When such postponement, reduction of loan principal and/or interest
payments is executed based on credit concerns it is also referred to as forbearance (refer to the \u2018Risk
Management\u2019 section of the Annual Report for more details) and requires analysis on whether the
contractual terms have been substantially modified or not. A similar assessment is needed when
contractual terms are modified for other reasons than forbearance.
ING Group determines whether there has been a substantial modification using both quantitative and
qualitative factors. If the modification results in a substantial modification of the terms of the loan, the
original loan is derecognised and a new loan is recognised at fair value at the modification date. In case of a
non-substantial modification, a modification gain or loss is recognised in profit or loss.
1.5.8\u00a0 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO)
ING Group participates in Targeted Longer-Term Refinancing Operations (TLTRO III). ING Group considers
TLTRO funding provided by the ECB to banks to be on market terms on the basis that the ECB has
established a separate market with TLTRO programmes. They have specific terms which are different from
other sources of funding available to banks, including those provided by the ECB. Consequently, the rate
under TLTRO is considered to be a market conforming rate and TLTRO funding is recognised fully as a
financial liability.
ING Group interprets the whole rate set by the ECB under TLTRO as a floating rate on the financial liability,
being the market rate for each specific period in time. This results in discrete rates for discrete interest
periods over the life of TLTRO. The change in the applicable rate between interest periods is seen as a
change in the floating rate and is accounted for prospectively. Similarly, if the ECB announces changes in
the rate for the amounts already drawn under the existing TLTRO, then such changes also represent a
change in a floating rate. Following this, such changes lead to the recognition of an increased/decreased
interest in the relevant period of life of the exposure, rather than by the recognition of an immediate
modification gain or loss at the moment of the change of terms by the ECB. If the change relates to the
periods already passed, the impact for those past periods is recognised in profit or loss immediately.
Furthermore, the change in the TLTRO rate driven by changes in expectations of meeting the targets
impacts interest income. As a result, interest income which relates to the period that already passed until
the moment when the change in expectations occurs, is recognised as a catch up adjustment in
Consolidated statement of profit or loss. This change occurs only when ING Group has a reasonable
expectation that the lending targets will be met.
ING Group views \u2018reasonable expectation\u2019 in case of TLTRO funding as a high hurdle. This is the moment
when it becomes highly probable, i.e. the probability of meeting the lending targets is substantially greater
than the probability that it will not. As a result, if interest income is recognised during the period based on
the expectation of meeting the targets, there should only be a limited possibility that the interest may need
to be reversed in future reporting periods. Reference is made to note 12 \u2018Deposits from banks\u2019 and to note
20 \u2018Net interest income\u2019 for the presentation of ING Group\u2019s participation in TLTRO programmes.
Significant judgements:
Significant management judgement is exercised in determining the accounting treatment of TLTRO
transactions. In particular, ING Group applied judgement in:
\u2022 assessing and concluding that in ING Group\u2019s view the rate under TLTRO is considered to be a market
conforming rate and, hence, accounting for TLTRO in accordance with IFRS 9;
\u2022 selecting accounting policies regarding the calculation of the effective interest rate under TLTRO.
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1.5.1\u00a0 Recognition and derecognition of financial instruments
Recognition of financial assets
Financial assets are recognised in the balance sheet when ING Group becomes a party to the contractual
provisions of the instrument. For a regular way purchase or sale of a financial asset, trade date and
settlement date accounting is applied depending on the classification of the financial asset.
Derecognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where ING Group has transferred the rights to receive the cash flows from the financial asset or
assumed an obligation to pass on the cash flows and has transferred substantially all the risks and rewards
of the asset. If ING Group neither transfers nor retains substantially all the risks and rewards of ownership of
a financial asset, it derecognises the financial asset if it no longer has control over the asset. The difference
between the carrying amount of a financial asset that has been derecognised and the consideration
received is recognised in profit or loss.
Recognition of financial liabilities
Financial liabilities are recognised on the date that the entity becomes a party to the contractual provisions
of the instrument.
Derecognition of financial liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished and
the consideration paid is recognised in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-656": { "value": "
1.5.2\u00a0 Classification and measurement of financial instruments
Financial assets
ING Group classifies its financial assets in the following measurement categories:
\u2022 those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
\u2022 those to be measured at amortised cost (AC).
At initial recognition, ING Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss (FVPL) are expensed in the
statement of profit or loss.
Financial assets \u2013 Debt instruments
The classification depends on the entity\u2019s business model for managing the financial assets and the
contractual terms of the cash flows at initial recognition.
Business models
Business models are classified as Hold to Collect (HtC), Hold to Collect and Sell (HtC&S) or Other depending
on how a portfolio of financial instruments as a whole is managed. ING Group\u2019s business models are based
on the existing management structure of the bank, and refined based on an analysis of how businesses are
evaluated and reported, how their specific business risks are managed and on historic and expected future
sales. Sales are permissible in a HtC business model when these are due to an increase in credit risk, take
place close to the maturity date (where the proceeds from the sales approximate the collection of the
remaining contractual cash flows), are insignificant in value (both individually and in aggregate) or are
infrequent.
Contractual cash flows Solely Payments of Principal and Interest (SPPI)
The contractual cash flows of a financial asset are assessed to determine whether they represent SPPI.
Interest includes consideration for the time value of money, credit risk and for other basic lending risks such
as consideration for liquidity risk and costs associated with holding the financial asset for a particular period
of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are SPPI.
In assessing whether the contractual cash flows are SPPI, ING Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition.
Based on the entity\u2019s business model for managing the financial assets and the contractual terms of the
cash flows, there are three measurement categories into which ING Group classifies its debt instruments:
\u2022 Amortised Cost (AC):
Debt instruments that are held for collection of contractual cash flows under a HtC business model where
those cash flows represent SPPI are measured at AC. Interest income from these financial assets is
included in Interest income using the Effective Interest Rate (EIR) method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVOCI:
Debt instruments that are held for collection of contractual cash flows and for selling the financial assets
under a HtC&S business model, where the assets\u2019 cash flows represent SPPI, are measured at FVOCI.
Movements in the carrying amount are recognised in OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and presented in Investment income or Other net income, based
on the specific characteristics of the business model. Interest income from these financial assets is
included in Interest income using the EIR method. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Group may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo\u2019s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
ING Group reclassifies debt instruments if, and only if, its business model for managing those financial
assets changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
1.5.3\u00a0 Fair values of financial assets and liabilities
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a \u2018Day One Profit or Loss\u2019) is deferred. ING Group defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Group recognises the difference as a
gain or loss at inception.
Subsequently, except for financial assets and financial liabilities measured at amortised cost, all the other
financial assets and liabilities are measured at fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. It assumes that market
participants would use and take into account the characteristics of the asset or liability when pricing the
asset or liability. Fair values of financial assets and liabilities are based on unadjusted quoted market prices
where available. Such quoted market prices are primarily obtained from exchange prices for listed financial
instruments. Where an exchange price is not available, quoted prices in an active market may be obtained
from independent market vendors, brokers, or market makers. In general, positions are valued at the bid
price for a long position and at the offer price for a short position or are valued at the price within the bid-
offer spread that is most representative of fair value in the circumstances. In some cases where positions
are marked at mid-market prices, a fair value adjustment is calculated.
For certain financial assets and liabilities, quoted market prices are not available. For such instruments, fair
value is determined using valuation techniques. These range from discounting of cash flows to various
valuation models, where relevant pricing factors including the market price of underlying reference
instruments, market parameters (volatilities, correlations and credit ratings), and customer behaviour are
taken into account. ING Group maximises the use of market observable inputs and minimises the use of
unobservable inputs in determining the fair value. It can be subjective dependent on the significance of the
unobservable input to the overall valuation. All valuation techniques used are subject to internal review and
approval. Most data used in these valuation techniques are validated on a daily basis when possible.
When a group of financial assets and liabilities are managed on the basis of their net risk exposures, the fair
value of a group of financial assets and liabilities are measured on a net portfolio level.
To include credit risk in fair value, ING Group applies both Credit and Debit Valuation Adjustments (CVA, DVA,
also known as Bilateral Valuation Adjustments or BVA). Own issued debt and structured notes that are
designated at FVPL are adjusted for ING Group\u2019s own credit risk by means of a DVA. To include the funding
risk, ING Group applies an additional \u2018Funding Valuation Adjustment\u2019 (FVA) to the uncollateralised derivatives
based on the market price of funding liquidity.ING Group also applies to certain positions other valuation
adjustments to arrive at the fair value: Bid-Offer adjustments, Model Risk Adjustments and Collateral
Valuation Adjustments (CollVA).
Significant judgements and critical accounting estimates and assumptions:
\u2022 Even if market prices are available, when markets are less liquid there may be a range of prices for the
same security from different price sources. Selecting the most appropriate price requires judgement
and could result in different estimates of fair value.\u00a0
\u2022 Valuation techniques are subjective in nature and significant judgement is involved in establishing fair
values for certain financial assets and liabilities. Valuation techniques involve various assumptions
regarding pricing factors. The use of different valuation techniques and assumptions could produce
significantly different estimates of fair value.\u00a0
\u2022 Price testing is performed to assess whether the process of valuation has led to an appropriate fair
value of the position and to minimise the potential risks of economic losses due to incorrect or misused
models.
\u2022 Assessing whether a market is active, and whether an input is observable and significant, requires
judgement. ING Group categorises its financial instruments that are either measured in the statement
of financial position at fair value or of which the fair value is disclosed, into a three-level hierarchy
based on the observability and significance of the valuation inputs. The use of different approaches to
assess whether a market is active, whether an input is observable, and whether an unobservable input
is significant could produce different classification within the fair value hierarchy as well as potentially
different deferral of the Day One Profit or Loss.
\u2022 Reference is made to Note 35 'Fair value of assets and liabilities ' and to the \u2018Market risk\u2019 paragraph in
the \u2018Risk management\u2019 section of the Annual Report for the basis of the determination of the fair value
of financial instruments and related sensitivities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-657": { "value": "
Financial assets
ING Group classifies its financial assets in the following measurement categories:
\u2022 those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
\u2022 those to be measured at amortised cost (AC).
At initial recognition, ING Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss (FVPL) are expensed in the
statement of profit or loss.
Financial assets \u2013 Debt instruments
The classification depends on the entity\u2019s business model for managing the financial assets and the
contractual terms of the cash flows at initial recognition.
Business models
Business models are classified as Hold to Collect (HtC), Hold to Collect and Sell (HtC&S) or Other depending
on how a portfolio of financial instruments as a whole is managed. ING Group\u2019s business models are based
on the existing management structure of the bank, and refined based on an analysis of how businesses are
evaluated and reported, how their specific business risks are managed and on historic and expected future
sales. Sales are permissible in a HtC business model when these are due to an increase in credit risk, take
place close to the maturity date (where the proceeds from the sales approximate the collection of the
remaining contractual cash flows), are insignificant in value (both individually and in aggregate) or are
infrequent.
Contractual cash flows Solely Payments of Principal and Interest (SPPI)
The contractual cash flows of a financial asset are assessed to determine whether they represent SPPI.
Interest includes consideration for the time value of money, credit risk and for other basic lending risks such
as consideration for liquidity risk and costs associated with holding the financial asset for a particular period
of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are SPPI.
In assessing whether the contractual cash flows are SPPI, ING Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition.
Based on the entity\u2019s business model for managing the financial assets and the contractual terms of the
cash flows, there are three measurement categories into which ING Group classifies its debt instruments:
\u2022 Amortised Cost (AC):
Debt instruments that are held for collection of contractual cash flows under a HtC business model where
those cash flows represent SPPI are measured at AC. Interest income from these financial assets is
included in Interest income using the Effective Interest Rate (EIR) method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVOCI:
Debt instruments that are held for collection of contractual cash flows and for selling the financial assets
under a HtC&S business model, where the assets\u2019 cash flows represent SPPI, are measured at FVOCI.
Movements in the carrying amount are recognised in OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and presented in Investment income or Other net income, based
on the specific characteristics of the business model. Interest income from these financial assets is
included in Interest income using the EIR method. Impairment losses are presented as a separate line
item in the statement of profit or loss.
\u2022 FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Group may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo\u2019s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
ING Group reclassifies debt instruments if, and only if, its business model for managing those financial
assets changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-658": { "value": "FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Group may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo\u2019s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-659": { "value": "
ING Group reclassifies debt instruments if, and only if, its business model for managing those financial
assets changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-660": { "value": "
Financial assets \u2013 Equity instruments
All equity investments are measured at fair value. ING Group applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Group\u2019s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING Group\u2019s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-662": { "value": "
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-661": { "value": "
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
\u2022 the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss;\u00a0
\u2022 the remaining amount of change in the fair value is presented in profit or loss in \u2018Valuation results and
net trading income\u2019. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within \u2018Interest income
(expense).
A financial guarantee contract is a contract that requires ING Group to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 \u2018Financial instruments\u2019 (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 \u2018Revenue from contracts with customers\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-663": { "value": "
Repurchase transactions and reverse repurchase transactions
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the Consolidated statement of financial position. The counterparty liability is
measured at FVPL (designated) and included in Other financial liabilities at FVPL if the asset is measured at
FVPL. Otherwise, the counterparty liability is included in Deposits from banks, Customer deposits, or Trading,
as appropriate.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the Consolidated statement of financial position. The consideration paid
to purchase securities is recognised as Loans and advances to customers, Loans and advances to banks,
Other financial assets at FVPL or Trading assets, as appropriate. The difference between the sale and
repurchase price is treated as interest and amortised over the life of the agreement using the effective
interest method for instruments that are not measured at FVPL.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-664": { "value": "
1.5.3\u00a0 Fair values of financial assets and liabilities
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a \u2018Day One Profit or Loss\u2019) is deferred. ING Group defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Group recognises the difference as a
gain or loss at inception.
Subsequently, except for financial assets and financial liabilities measured at amortised cost, all the other
financial assets and liabilities are measured at fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. It assumes that market
participants would use and take into account the characteristics of the asset or liability when pricing the
asset or liability. Fair values of financial assets and liabilities are based on unadjusted quoted market prices
where available. Such quoted market prices are primarily obtained from exchange prices for listed financial
instruments. Where an exchange price is not available, quoted prices in an active market may be obtained
from independent market vendors, brokers, or market makers. In general, positions are valued at the bid
price for a long position and at the offer price for a short position or are valued at the price within the bid-
offer spread that is most representative of fair value in the circumstances. In some cases where positions
are marked at mid-market prices, a fair value adjustment is calculated.
For certain financial assets and liabilities, quoted market prices are not available. For such instruments, fair
value is determined using valuation techniques. These range from discounting of cash flows to various
valuation models, where relevant pricing factors including the market price of underlying reference
instruments, market parameters (volatilities, correlations and credit ratings), and customer behaviour are
taken into account. ING Group maximises the use of market observable inputs and minimises the use of
unobservable inputs in determining the fair value. It can be subjective dependent on the significance of the
unobservable input to the overall valuation. All valuation techniques used are subject to internal review and
approval. Most data used in these valuation techniques are validated on a daily basis when possible.
When a group of financial assets and liabilities are managed on the basis of their net risk exposures, the fair
value of a group of financial assets and liabilities are measured on a net portfolio level.
To include credit risk in fair value, ING Group applies both Credit and Debit Valuation Adjustments (CVA, DVA,
also known as Bilateral Valuation Adjustments or BVA). Own issued debt and structured notes that are
designated at FVPL are adjusted for ING Group\u2019s own credit risk by means of a DVA. To include the funding
risk, ING Group applies an additional \u2018Funding Valuation Adjustment\u2019 (FVA) to the uncollateralised derivatives
based on the market price of funding liquidity.ING Group also applies to certain positions other valuation
adjustments to arrive at the fair value: Bid-Offer adjustments, Model Risk Adjustments and Collateral
Valuation Adjustments (CollVA).
Significant judgements and critical accounting estimates and assumptions:
\u2022 Even if market prices are available, when markets are less liquid there may be a range of prices for the
same security from different price sources. Selecting the most appropriate price requires judgement
and could result in different estimates of fair value.\u00a0
\u2022 Valuation techniques are subjective in nature and significant judgement is involved in establishing fair
values for certain financial assets and liabilities. Valuation techniques involve various assumptions
regarding pricing factors. The use of different valuation techniques and assumptions could produce
significantly different estimates of fair value.\u00a0
\u2022 Price testing is performed to assess whether the process of valuation has led to an appropriate fair
value of the position and to minimise the potential risks of economic losses due to incorrect or misused
models.
\u2022 Assessing whether a market is active, and whether an input is observable and significant, requires
judgement. ING Group categorises its financial instruments that are either measured in the statement
of financial position at fair value or of which the fair value is disclosed, into a three-level hierarchy
based on the observability and significance of the valuation inputs. The use of different approaches to
assess whether a market is active, whether an input is observable, and whether an unobservable input
is significant could produce different classification within the fair value hierarchy as well as potentially
different deferral of the Day One Profit or Loss.
\u2022 Reference is made to Note 35 'Fair value of assets and liabilities ' and to the \u2018Market risk\u2019 paragraph in
the \u2018Risk management\u2019 section of the Annual Report for the basis of the determination of the fair value
of financial instruments and related sensitivities.
1.5.6\u00a0 Impairment of financial assets
An Expected Credit Loss (ECL) model is applied to financial assets accounted for at AC or FVOCI such as
loans, debt securities and lease receivables, as well as off-balance sheet items such as undrawn loan
commitments, certain financial guarantees issued, and undrawn committed revolving credit facilities. Under
the ECL model, ING Group calculates the expected credit losses (ECL) by considering on a discounted basis
the cash shortfall it would incur in case of a default and multiplying the shortfall by the probability of a
default occurring. The ECL is the sum of the probability-weighted outcomes. The ECL estimates are unbiased
and include reasonable and supportable information about past events, current conditions, and forecasts of
future economic conditions. ING Group\u2019s approach leverages the Advanced Internal Ratings Based (AIRB)
models that are used for regulatory purposes. Adjustments are applied to make these models suitable for
determining ECL. ECL is recognised on the balance sheet as loan loss provisions (LLP).
Three-stage approach
Financial assets are classified in one of the below three stages at each reporting date. A financial asset can
move between stages during its lifetime. The stages are based on changes in credit quality since initial
recognition and defined as follows:
\u2022 Stage 1
Financial assets that have not had a significant increase in credit risk since initial recognition (i.e. no
Stage 2 or 3 triggers apply). Assets are classified as Stage 1 upon initial recognition (with the exception of
purchased or originated credit impaired (POCI) assets) and ECL is determined by the probability that a
default occurs in the next 12 months (12 months ECL);
\u2022 Stage 2
Financial assets showing a significant increase in credit risk since initial recognition. For assets in Stage 2
ECL reflects an estimate on the credit losses over the remaining maturity of the asset (lifetime ECL); or
\u2022 Stage 3
Financial assets that are credit-impaired. Also for these assets ECL is determined over the remaining
maturity of the asset.
Significant increase in credit risk
ING Group established a framework, incorporating quantitative and qualitative indicators, to identify and
assess significant increases in credit risk (SICR). This is used to determine the appropriate ECL Stage for each
financial asset.
The main determinate of SICR is a quantitative test, whereby the lifetime Probability of Default (PD) of an
asset at each reporting date is compared against its lifetime PD determined at the date of initial recognition.
If the delta is above pre-defined absolute or relative thresholds the item is considered to have experienced a
SICR. Furthermore, any facility which shows an increase of 200% between the PD at the date of initial
recognition and the lifetime PD at the reporting date (i.e. threefold increase in PD) must be classified as
Stage 2. This is considered a backstop within the quantitative assessment of SICR. Refer to \u2018Criteria for
identifying a significant increase in credit risk\u2019 in the \u2018Risk Management\u2019 section of the Annual Report for
more details on relative and absolute PD thresholds, including quantitative disclosures on those thresholds.
Consequently, if the above quantitative SICR thresholds are exceeded, the item moves from Stage 1 to Stage
2 (unless the item is credit-impaired). In these instances, items are no longer assigned a 12-month ECL and
instead are assigned a lifetime ECL. Items can return to Stage 1 if there is sufficient evidence that there is no
longer a significant increase in credit risk.
ING Group also relies on a number of qualitative indicators to identify and assess SICR. These include:
\u2022 Forbearance status;
\u2022 Watch List status;
\u2022 Intensive care management;
\u2022 Collective SICR assessment;
\u2022 Substandard Internal rating; and
\u2022 Arrears status (including 30 days past due used as a backstop).
An asset that is in Stage 2 will move back to Stage 1 when none of the above criteria are in place anymore.
However, if the asset was moved to Stage 2 based on the forbearance status, then the asset stays in Stage
2 for at least 24 months. If the asset was classified as Stage 2 due to 30 days past due trigger, then the
asset is moved back to Stage 1 only after three months from when the trigger no longer applies.
Credit-impaired financial assets (Stage 3)
Financial assets are assessed for credit-impairment at each reporting date and more frequently when
circumstances warrant further assessment. Evidence of credit-impairment includes arrears of over 90 days
on any material credit obligation, indications that the borrower is experiencing significant financial difficulty,
a breach of contract, bankruptcy or distressed restructuring. The definition of credit-impaired under IFRS 9
(Stage 3) is aligned with the definition of default used by ING Group for internal risk management purposes,
which is also the definition used for regulatory purposes.
An asset (other than a POCI asset) that is in Stage 3 will move back to Stage 2 when, as at the reporting
date, it is no longer considered to be credit-impaired subject to certain probation periods. The asset will
migrate back to Stage 1 when its credit risk at the reporting date is no longer considered to have increased
significantly since initial recognition.
Macroeconomic scenarios
ING Group has established a quarterly process whereby forward-looking macroeconomics scenarios and
probability weightings are developed for the purpose of ECL. ING Group applies data predominantly from a
leading service provider enriched with the internal ING Group view. A baseline, up-scenario and a down-
scenario are determined to reflect an unbiased and probability-weighted ECL amount. As a baseline
scenario, ING Group applies the market-neutral view combining consensus forecasts for economic variables
such as unemployment rates, GDP growth, house prices, commodity prices, and short-term interest rates.
Applying market consensus in the baseline scenario ensures unbiased estimates of the expected credit
losses.
The alternative scenarios are based on observed forecast errors in the past, adjusted for the risks affecting
the economy today and the forecast horizon. The probabilities assigned are based on the likelihoods of
observing the three scenarios and are derived from confidence intervals on a probability distribution. The
forecasts for the economic variables are adjusted on a quarterly basis.
The probability weights applied to each of the three scenarios
ING Group uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and
downside). Management approach used to determine the weights of each scenario and in selecting the
parts of the distribution of forecast errors from which the weights are derived and disclosed in the
\u2018Alternative scenarios and probability weights\u2019 and the sensitivity analysis in the \u2018Risk Management\u2019 section
of the Annual Report.
Measurement of ECL
ING Group applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Group applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors\u2019 ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.
For the purpose of ECL, ING Group\u2019s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Group estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Group\u2019s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
Purchased or Originated Credit Impaired (POCI) assets
POCI assets are financial assets that are credit-impaired on initial recognition. Impairment on a POCI asset is
determined based on lifetime ECL from initial recognition. POCI assets are recognised initially at an amount
net of ECL and are measured at AC using a credit-adjusted effective interest rate. In subsequent periods any
changes to the estimated lifetime ECL are recognised in profit or loss. Favourable changes are recognised as
an impairment gain even if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at
origination.
Write-off and debt forgiveness
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovery and/or collectability of amounts due. The following events can lead to a write-off:
\u2022 After a restructuring has been completed and there is a high improbability of recovery of part of the
remaining loan exposure (including partial debt forgiveness);
\u2022 In a bankruptcy liquidation scenario;
\u2022 After divestment or sale of a credit facility at a discount; and
\u2022 Specific fraud cases with no recourse options.
When a loan is uncollectable, it is written off against the related loan loss provision. Subsequent recoveries
of amounts previously written off are recognised in \u2018Addition to loan loss provisions\u2019 in the Consolidated
statement of profit or loss.
Debt forgiveness (or debt settlement) involves write-off but additionally involves the forgiveness of a legal
obligation, in whole or in part. This means that ING Group forfeits the legal right to recover the debt. As a
result, the financial asset needs to be derecognised.
Presentation of ECL
ECL for financial assets measured at AC are deducted from the gross carrying amount of the assets. For
debt instruments at FVOCI, the ECL is recognised in OCI, instead of deducted the carrying amount of the
asset. ECL also reflects any credit losses related to the portion of the loan commitment that is expected to
be drawn down over the remaining life of the instrument. The ECL on issued financial guarantee contracts,
in scope of IFRS 9 and not measured at FVPL, are recognised as liabilities and presented in Other provisions.
ECL are presented in profit or loss in Addition to loan loss provision.
Significant judgements and critical accounting estimates and assumptions:
The calculation of ECL requires a number of judgements and estimates. In particular:
\u2022 ING Group makes various assumptions about the risk of default, the credit loss rates in case of a
default and expected future cash flows. For collective provisions, ING Group applies significant
judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection
and calibration of relevant models. For Stage 3 individual provisioning, the determination and
probabilities of restructuring and recovery scenarios as well as the amount and timing of expected
future cash flows may be particularly subjective.
\u2022 Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature.
The use of alternate forward-looking macroeconomic scenarios can produce significantly different
estimates of ECL. This is demonstrated in the sensitivity analysis in the \u2018Risk Management\u2019 section of
the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant
portfolios is disclosed.
\u2022 When determining whether the credit risk on a financial asset has increased significantly (criteria for
identifying a significant increase in credit risk), ING Group considers reasonable and supportable
information to compare the risk of default occurring at reporting date with the risk of a default
occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD
rating to each financial asset, there is significant judgement used in determining the Stage allocation
PD banding thresholds. The process of comparing a financial asset\u2019s PD with the PD banding thresholds
determines its ECL Stage. Assets in Stage 1 are allocated a 12-month ECL, and those in Stage 2 are
allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in
assigning financial asset PDs and the PD banding thresholds constitute a significant judgement.
Analysis of the sensitivity associated with the assessment of significant increase in credit risk is
presented in the \u2018Risk Management\u2019 section of the Annual Report.
\u2022 Judgement is exercised in management\u2019s evaluation of whether there is objective evidence that
exposures are credit-impaired.
\u2022 To reflect the risks that are not properly captured by the ECL models, a number of management
adjustments to the model-based ECL were necessary as at 31 December 2023, which required
significant judgement. Reference is made to the \u2018Management adjustments applied this year\u2019
paragraph in the \u2018Risk management\u2019 section of the Annual Report.
1.5.7\u00a0 Modification of financial instruments
In certain circumstances ING Group grants borrowers postponement, reduction of loan principal and/or
interest payments on a temporary period of time to maximise collection opportunities, and if possible, avoid
default, foreclosure, or repossession. When such postponement, reduction of loan principal and/or interest
payments is executed based on credit concerns it is also referred to as forbearance (refer to the \u2018Risk
Management\u2019 section of the Annual Report for more details) and requires analysis on whether the
contractual terms have been substantially modified or not. A similar assessment is needed when
contractual terms are modified for other reasons than forbearance.
ING Group determines whether there has been a substantial modification using both quantitative and
qualitative factors. If the modification results in a substantial modification of the terms of the loan, the
original loan is derecognised and a new loan is recognised at fair value at the modification date. In case of a
non-substantial modification, a modification gain or loss is recognised in profit or loss.
1.5.8\u00a0 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO)
ING Group participates in Targeted Longer-Term Refinancing Operations (TLTRO III). ING Group considers
TLTRO funding provided by the ECB to banks to be on market terms on the basis that the ECB has
established a separate market with TLTRO programmes. They have specific terms which are different from
other sources of funding available to banks, including those provided by the ECB. Consequently, the rate
under TLTRO is considered to be a market conforming rate and TLTRO funding is recognised fully as a
financial liability.
ING Group interprets the whole rate set by the ECB under TLTRO as a floating rate on the financial liability,
being the market rate for each specific period in time. This results in discrete rates for discrete interest
periods over the life of TLTRO. The change in the applicable rate between interest periods is seen as a
change in the floating rate and is accounted for prospectively. Similarly, if the ECB announces changes in
the rate for the amounts already drawn under the existing TLTRO, then such changes also represent a
change in a floating rate. Following this, such changes lead to the recognition of an increased/decreased
interest in the relevant period of life of the exposure, rather than by the recognition of an immediate
modification gain or loss at the moment of the change of terms by the ECB. If the change relates to the
periods already passed, the impact for those past periods is recognised in profit or loss immediately.
Furthermore, the change in the TLTRO rate driven by changes in expectations of meeting the targets
impacts interest income. As a result, interest income which relates to the period that already passed until
the moment when the change in expectations occurs, is recognised as a catch up adjustment in
Consolidated statement of profit or loss. This change occurs only when ING Group has a reasonable
expectation that the lending targets will be met.
ING Group views \u2018reasonable expectation\u2019 in case of TLTRO funding as a high hurdle. This is the moment
when it becomes highly probable, i.e. the probability of meeting the lending targets is substantially greater
than the probability that it will not. As a result, if interest income is recognised during the period based on
the expectation of meeting the targets, there should only be a limited possibility that the interest may need
to be reversed in future reporting periods. Reference is made to note 12 \u2018Deposits from banks\u2019 and to note
20 \u2018Net interest income\u2019 for the presentation of ING Group\u2019s participation in TLTRO programmes.
Significant judgements:
Significant management judgement is exercised in determining the accounting treatment of TLTRO
transactions. In particular, ING Group applied judgement in:
\u2022 assessing and concluding that in ING Group\u2019s view the rate under TLTRO is considered to be a market
conforming rate and, hence, accounting for TLTRO in accordance with IFRS 9;
\u2022 selecting accounting policies regarding the calculation of the effective interest rate under TLTRO.
1.10\u00a0 Investments in associates and joint ventures
Associates are all entities over which ING Group has significant influence but not control. Significant
influence is the ability to participate in the financial and operating policies of the investee. It generally
results from a shareholding of between 20% and 50% of the voting rights or through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;\u00a0
\u2022 Participation in the policymaking process; and\u00a0
\u2022 Interchange of managerial personnel.\u00a0
Joint ventures are entities over which ING Group has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Group\u2019s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Group\u2019s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Group\u2019s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Group and its associates and joint ventures are eliminated to
the extent of ING Group\u2019s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Group.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
1.15\u00a0 Provisions, contingent liabilities and contingent assets
A provision is a present obligation arising from past events, the settlement of which is expected to result in
an outflow of resources embodying economic benefits, however the timing or the amount is uncertain.
Provisions are discounted when the effect of the time value of money is significant using a pre-tax discount
rate.
Reorganisation provisions include employee termination benefits when ING Group is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.
A liability is recognised for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the liability is recognised
only upon reaching the specified minimum threshold.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of ING Group; or a present obligation that arises from past events but is not recognised
because it is either not probable that an outflow of economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility
of the outflow of economic benefits is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of ING Group. Contingent assets are recognised in the statement of financial position only when
realisation of the income that arises from such an asset is virtually certain. Contingent assets are disclosed
in the notes when an inflow of economic benefits is probable.
Significant judgements and critical accounting estimates and assumptions:
The recognition and measurement of provisions is an inherently uncertain process involving using
judgement to determine when a present obligation exists and estimates regarding probability, amounts
and timing of cash flows.
ING Group may become involved in governmental, regulatory, arbitration and legal proceedings and
investigations and may be subject to third party claims. With or without reference to the above, ING Group
may also offer compensation to certain of its customers. Judgement is required to assess whether a
present obligation exists and to estimate the probability of an unfavourable outcome and the amount of
potential loss. The degree of uncertainty and the method of making the accounting estimate depends on
the individual case, its nature and complexity. Such cases are usually one of a kind. For the assessment of
related provisions ING Group consults with internal and external legal experts. Even taking into
consideration legal experts\u2019 advice, the probability of an outflow of economic benefits can still be uncertain
and the provision recognised can remain sensitive to the assumptions used. Reference is made to Note 15
'Provisions'. For proceedings where it is not possible to make a reliable estimate of the expected financial
effect, that could result from the ultimate resolution of the proceedings, no provision is recognised,
however disclosure is included in the financial statements, where relevant. Reference is made to Note 42
'Legal proceedings'.
Critical accounting estimates and assumptions for the reorganisation provision are in estimating the
amounts and timing of cash flows as the announced transformation initiatives are implemented over a
period of several years. Reference is made to Note 15 'Provisions'.
Cash and balances with central banks
in EUR million
2023
2022
Amounts held at central banks 1
88,627
85,934
Cash and bank balances
1,587
1,681
90,214
87,614
1 Amounts held at central banks include an amount of EUR -5\u00a0million (2022: EUR -12\u00a0million) of Loan loss provisions.
3\u00a0 Loans and advances to banks
Loans and advances to banks
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to banks
9,453
23,463
7,286
11,679
16,739
35,141
Loan loss provisions
-11
-12
-18
-26
-30
-37
9,441
23,451
7,268
11,653
16,709
35,104
Loans and advances mainly include balances of reverse repurchase transactions, term loans and cash
collateral transactions. For more information on the balance of reverse repurchase transactions refer to
Note 4 'Financial assets at fair value through profit or loss'. Reference is made to Note 7 'Loans and
advances to customers' for information on finance lease receivables included in Loans and advances to
banks.
As at 31\u00a0December 2023 and at 31 December 2022, all loans and advances to banks are non-subordinated.
Financial assets at fair value through other comprehensive income by type
in EUR million
2023
2022
Equity securities
1,885
1,887
Debt securities 1
38,281
29,095
Loans and advances 1
951
643
41,116
31,625
1 Debt securities include an amount of EUR -13 million (2022: EUR -21 million) and the Loans and advances includes EUR -8 million\u00a0
(2022: EUR -1 million) of Loan loss provisions.
Debt securities by type of exposure
Debt Securities\u00a0 at
FVPL
Debt Securities at
FVOCI
Debt Securities at
AC
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Government bonds
362
63
20,988
16,016
24,050
24,629
45,400
40,708
Central bank bonds 1
446
307
2,043
2,331
2,489
2,638
Sub-sovereign, Supranationals
and Agencies
1,354
2,343
11,587
8,529
14,639
14,210
27,580
25,082
Covered bonds
4,084
2,663
5,231
5,543
9,315
8,206
Corporate bonds
799
857
127
108
109
26
1,035
991
Financial institutions' bonds
1,645
1,931
483
772
186
220
2,314
2,923
ABS portfolio
758
758
1,025
1,028
2,077
1,217
3,860
3,003
5,363
6,258
38,293
29,116
48,335
48,177
91,991
83,551
Loan loss provisions
-13
-21
-22
-17
-34
-39
Debt securities portfolio
5,363
6,258
38,281
29,095
48,313
48,160
91,957
83,513
1 In 2023 Central bank bonds have been included as a separate type of exposure. These bonds were previously included in Financial
Institutions bonds. The prior period has been updated for consistency and comparability.
Loans and advances to customers by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to public authorities
1,070
837
13,314
11,840
14,384
12,677
Residential mortgages
110,475
107,952
214,120
205,511
324,596
313,463
Other personal lending
5,036
5,835
31,535
30,345
36,571
36,180
Corporate Lending
62,677
68,077
209,795
211,092
272,472
279,169
179,258
182,701
468,764
458,789
648,023
641,490
Loan loss provisions
-830
-993
-4,791
-4,990
-5,621
-5,984
178,429
181,708
463,973
453,798
642,402
635,506
8\u00a0 Investment in associates and joint ventures
Investments in associates and joint ventures
in EUR million
2023
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
976
1,128
46,666
40,776
1,386
943
Other investments in associates and
joint ventures
381
1,509
Investments in associates and joint ventures
in EUR million
2022
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
849
1,109
49,506
43,677
1,303
957
Other investments in associates and
joint ventures
391
1,500
TMBThanachart Bank Public Company Limited
ING Group has a 23% investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), a bank
listed on the Stock Exchange of Thailand. TTB is providing products and services to Wholesale, Small and
Medium Enterprise (SME), and Retail customers. TTB is accounted for as an investment in associate based on
the size of ING shareholding and representation on the Board. TTB is part of the Corporate Line segment.
Other investments in associates and joint ventures
Included in Other investments in associates and joint ventures are mainly financial services and (non)
financial technology funds or vehicles operating predominantly in Europe, and represents a number of
associates and joint ventures that are individually not significant to ING Group.
Significant influence for associates in which the interest held is below 20%, is based on the combination of
ING Group\u2019s financial interest and other arrangements, such as participation in the Board of Directors.
The associates and joint ventures of ING are subject to legal and regulatory restrictions regarding the
amount of dividends they can pay to ING. These restrictions are for example dependent on the laws in the
country of incorporation for declaring dividends or as a result of minimum capital requirements that are
imposed by industry regulators in the countries in which the associates and joint ventures operate.
In addition, the associates and joint ventures also consider other factors in determining the appropriate
levels of equity needed. These factors and limitations include, but are not limited to, rating agency and
regulatory views, which can change over time.
Changes in Investments in associates and joint ventures
in EUR million
2023
2022
Opening balance as at 1 January
1,500
1,587
Additions
55
48
Revaluations
4
-8
Share of results
149
92
Dividends received
-74
-48
Disposals
-89
-10
Impairments
-5
-192
Exchange rate differences
-32
27
Other
4
Closing balance
1,509
1,500
Share of results from associates and joint ventures of EUR 149 million (2022: EUR 92 million) as included in
the table above is mainly attributable to results of TTB of EUR 107\u00a0million (2022: EUR 81 million).
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395\u00a0million (2022: EUR 395\u00a0million) have been recognised.
Deposits from banks includes ING\u2019s participation in the Targeted Longer-Term Refinancing Operations
(TLTRO) of EUR 6.0 billion (2022: EUR 36.0 billion). In 2023, EUR 30.0 billion of ING's TLTRO III participation was
repaid.
Provisions by type 1
in EUR million
2023
2022
Reorganisation provisions
231
418
Litigation provisions
193
150
Other provisions
355
455
779
1,022
Loan loss provisions for guarantees
142
29
920
1,052
1 In 2023, the table was updated to present the IFRS 9 loan loss provisions for guarantees separately. The comparatives for 2022
have been updated accordingly.
Changes in provisions
Reorganisation
Litigation
Other Provisions 2
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
418
421
150
132
455
407
1,022
961
Additions 1
207
217
78
59
39
230
325
506
Interest
-2
-2
Releases 1
-34
-46
-26
-8
-22
-166
-82
-221
Utilised
-356
-170
-23
-33
-11
-15
-389
-218
Exchange rate differences
-1
1
-3
-4
-1
Other changes
-3
-4
13
-104
-94
-3
Closing balance
231
418
193
150
355
455
779
1,022
1 Additions to provisions and unused amounts released are presented in Note 26 'Other operating expenses' in the Statement of Profit\u00a0
or Loss.
2 In 2023, the table was updated to exclude the IFRS 9 loan loss provisions for guarantees. The comparatives for 2022 have been
updated accordingly.
35\u00a0 Fair value of assets and liabilities
a) Valuation Methods
The estimated fair values represent the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. It is a market-
based measurement, which is based on assumptions that market participants would use and takes into
account the characteristics of the asset or liability that market participants would take into account when
pricing the asset or liability.
Fair values of financial assets and liabilities are based on quoted prices in active market where available.
When such quoted prices are not available, the fair value is determined by using valuation techniques.
In 2023, the financial markets were characterised by elevated levels of volatility. In the first quarter of the
year, the markets worldwide were shaken by the demise of SVB bank and the stress surrounding Credit
Suisse, fuelling uncertainty around possible additional defaults. Furthermore, the ongoing interest rate hikes
by the central banks in Europe and the US led to a fast increase in rates worldwide. Towards the end of the
year, the probability increased for interest rates to go down, which has been reflected in the forward
interest rates. Additionally, geopolitical risk increased with the Israel-Gaza conflict adding to the risk arising
from the ongoing Russia-Ukraine war.
Financial assets and liabilities, including Level 3, are valued using agreed methodologies, targeting the most
appropriate estimate of fair value.
b) Valuation control framework
The valuation control framework covers the product approval process (PARP), pricing, market data
assessment and independent price verification (IPV), valuation adjustments, model use, fair value hierarchy
and day one profit or loss. Valuation processes are governed by various governance bodies, including Local
Parameter Committees, Global Valuation and Impairment Committee, Market Data Committee and
Valuation Model Committee. All relevant committees meet on a regular basis (monthly/quarterly), where
agenda covers the aforementioned valuation controls.
The Global Valuation and Impairment Committee is responsible for the oversight and the approval of the
outcome of impairments (other than loan loss provisions) and valuation processes. It oversees the quality
and coherence of valuation methodologies and performance. The Valuation Model Committee is responsible
for the approval of all valuation models used for the Fair valuation (IFRS) and Prudent Valuation (CRR) of
positions measured at fair value. The Local Parameter Committee discusses the valuation results and
monitors the performance of the valuation activities carried out on local or regional level. The Global
Financial Markets Parameter Committee reviews the consolidated valuation outcome and resulting P&L for
Financial Market products, targeting a globally consistent treatment across Financial Market. The Market
Data Committee is responsible for the approval of the market data used in valuation.\u00a0
c) Valuation Adjustments
Valuation adjustments are an integral part of the fair value. They are the adjustments to the output from a
valuation technique in order to appropriately determine a fair value in accordance with IFRS13. ING
considers various fair value adjustments including Bid-Offer adjustments, Model Risk adjustments, Bilateral
Valuation Adjustments (BVA, consisting of Credit Valuation Adjustments or CVA, and Debit valuation
Adjustments or DVA), Collateral Valuation Adjustment (CollVA) and Funding Valuation Adjustment (FVA).
For financial instruments where the fair value at initial recognition is based on one or more significant
unobservable inputs, a difference between the transaction price and the fair value resulting from the
internal valuation process can occur. Such difference is referred to as Day One Profit or Day One Loss
(hereafter: DOP). ING defers material Day One Profit or Loss of instruments with significant unobservable
valuation inputs, which are the financial instruments classified as Level 3 and financial instruments with
material unobservable inputs into CVA which are not necessarily classified as Level 3. The DOP is amortised
over the life of the instrument, or until the significant unobservable inputs become observable, or until the
significant unobservable inputs become non-significant. Both the impact on the profit and loss in 2023 and
the DOP reserve is disclosed in the below table.
Deferred Day One Profit or Loss Reserve
The table below summarizes the movement in the aggregate DOP not recognised when financial
instruments were initially recognised, because of the use of valuation techniques for which not all the inputs
were market observable data.
Deferred day one profit or loss reserve
in EUR million
2023
2022
Opening balance at 1 January
-108
-7
DOP deferred on new transactions during the period
-83
-107
DOP recognised in the statement of profit or loss during the period:
\u2022 of which release
85
6
\u2022 of which amortisation and exchange differences
15
0
Closing balance at 31 December
-90
-108
The following table presents the models reserves for financial assets and liabilities.
Valuation adjustment reserves on financial assets and liabilities
in EUR million
2023
2022
Deferred Day One Profit or Loss
-90
-108
Own credit adjustments
34
75
Bid/Offer
-154
-216
Model Risk
-26
-13
CVA
-131
-192
DVA
55
99
CollVA
-4
-8
FVA
-68
-78
Total Valuation Adjustments
-385
-441
Own Credit Adjustment
Own issued debt and structured notes that are designated at fair value through profit or loss are adjusted
for ING`s own credit risk by means of DVA.
Bid-Offer Adjustment
For positions priced based upon mid-market input parameters, Bid-Offer adjustments are required in order
to reflect the valuation of that position based on bid price or offer price. In practice this adjustment accounts
for the difference in valuation from \u2018mid to bid\u2019 and \u2018mid to offer\u2019 for long and short exposures respectively.
In principle assets are valued at the bid prices and liabilities are valued at the offer price. For certain assets
or liabilities, where a market quoted price is not available, the price used is the fair value that is most
representative within the bid-offer spread.
Model Risk Adjustment
Financial instruments that are valued using a valuation model can be subject to model risk. Model risk is the
risk of possible financial loss resulting from pricing model or model-based parameter deficiencies and/or
uncertainties.
Bilateral Valuation Adjustments (Credit and Debit Valuation Adjustments)\u00a0
Bilateral Valuation Adjustment is the valuation adjustment reflecting the counterparty credit risk of
derivative contracts. It has a bilateral nature, where both the counterparty\u2019s credit risk (i.e. Credit Valuation
Adjustment or CVA) and ING\u2019s own credit risk (Debit Valuation Adjustment or DVA) are taken into account:
\u2022 CVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
the counterparty defaults (i.e. it is the market value of the counterparty\u2019s credit risk).
\u2022 DVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
ING defaults (i.e. it is the market value of ING\u2019s credit risk).
The calculation of CVA and DVA on derivatives is based on their expected exposures, the counterparties\u2019 and
ING\u2019s risk of default, taking into account the collateral agreements as well as netting agreements. The
counterparties\u2019 risk of default is measured by probability of default and expected loss given default, which is
based on market information including credit default swap (CDS) spreads. Where counterparty CDS spreads
are not available, relevant proxy spreads are used. Additionally, wrong-way risk (which occurs when the
probability of default by the counterparty increases (decreases) when ING\u2019s exposure to the counterparty
increases (decreases)) and right-way risk (which occurs when the probability of default by the counterparty
increases (decreases) when ING\u2019s exposure to the counterparty decreases (increases)) are included in the
adjustment.
Collateral Valuation Adjustment (CollVA)
Collateral Valuation Adjustment is a fair valuation adjustment applied on derivative instruments to capture
specific features of CSA (Credit Support Annex) with a counterparty that the regular OIS discounting
framework does not capture. Non-standard CSA features may include deviations in relation to the
currencies in which ING posts or receives collateral, deviations in remuneration rate on collateral which may
pay lower or higher rate than overnight rate or even no interest at all; other deviations can be posting
securities rather than cash as collateral, etc.
Funding Valuation Adjustment (FVA)
Funding Valuation Adjustment (FVA) is a fair valuation adjustment applied on derivative instruments to
address the asymmetry in funding costs or funding benefits between collateralized and uncollateralized
derivatives portfolios. This adjustment is based on the expected exposure profiles of the uncollateralized or
partially collateralized OTC derivatives and market-based funding spreads.
d) Fair value hierarchy
ING Group has categorised its financial instruments that are either measured in the statement of financial
position at fair value or of which the fair value is disclosed, into a three level hierarchy based on the
observability of the valuation inputs. Highest priority is retained to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to valuation techniques supported by
unobservable inputs.
Transfers into and transfers out of fair value hierarchy levels are made on a quarterly basis at the end of the
reporting period.
Level 1 \u2013 (Unadjusted) quoted prices in active markets
This category includes financial instruments whose fair value is determined directly by reference to
(unadjusted) quoted prices in an active market. A financial instrument is regarded as quoted in an active
market if quoted prices are readily and regularly available from an exchange, dealer markets, brokered
markets, or principal to principal markets. Those prices represent actual and regularly occurring market
transactions with sufficient frequency and volume to provide pricing information on an ongoing basis.
Transfers out of Level 1 into Level 2 or Level 3 occur when ING Group establishes that markets are no longer
active and therefore (unadjusted) quoted prices no longer provide reliable pricing information.
Level 2 \u2013 Valuation technique supported by observable inputs
This category includes financial instruments whose fair value is based on market observable inputs, either
directly or indirectly, other than quoted prices included within Level 1. The fair value for financial
instruments in this category can be determined by reference to quoted prices for similar instruments in
active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other
than quoted prices that are observable or market-corroborated inputs. ING analyses how the prices are
derived and determines whether the prices are liquid tradable prices or model-based consensus prices
taking various data as inputs.
For financial instruments that do not have a reference price available, fair value is determined using a
valuation technique (e.g., a model), where inputs in the model are taken from an active market or are
observable, such as interest rates and yield curves observable at commonly quoted intervals, implied
volatilities, and credit spreads.
Instruments, where inputs are unobservable are classified in this category, provided that the impact of
those unobservable inputs on the overall valuation is insignificant. The notion of significant is particularly
relevant for the distinction between Level 2 and Level 3 assets and liabilities, as the significance assessment
of the valuation input on the entire fair value measurement will determine whether the instrument should
be classified as Level 2 or Level 3. Expert judgement is required on the significance assessment approach.
Level 3 \u2013 Valuation technique supported by unobservable inputs
This category includes financial instruments whose fair value is determined using a valuation technique for
which a significant part of the overall valuation is driven by unobservable valuation inputs. Where valuation
inputs are unobservable, the Group must use the best information available to value the instruments. This
may require internally derived inputs taking into account market participants assumptions that are
reasonably available, including assumptions on the risk inherent in a particular valuation technique used to
measure fair value and the risk inherent in the inputs to the valuation technique. Unobservable inputs may
include, among others, volatility, correlation, spreads to discount rates, default rates, recovery rates,
prepayment rates, and certain credit spreads.
Financial instruments at fair value
The fair values of the financial instruments\u00a0 were determined as follows:
Methods applied in determining fair values of financial assets and liabilities (carried at fair value)
Level 1
Level 2
Level 3
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Financial assets at fair value
through profit or loss
- Equity securities
15,438
11,783
3
2
150
156
15,590
11,941
- Debt securities
4,825
1,636
4,081
5,361
3,364
3,450
12,270
10,447
- Derivatives
39
22
27,134
34,229
535
483
27,708
34,734
- Loans and receivables
0
0
63,316
54,097
4,131
2,547
67,446
56,644
20,302
13,441
94,533
93,690
8,179
6,635
123,015
113,766
Financial assets at fair value
through other
comprehensive income
- Equity securities
1,622
1,639
0
0
263
247
1,885
1,887
- Debt securities
35,848
25,644
2,433
3,451
0
0
38,281
29,095
- Loans and receivables
0
0
275
0
676
643
951
643
37,470
27,284
2,707
3,451
938
891
41,116
31,625
Financial liabilities
Financial liabilities at fair
value through profit or loss
\u2013\u00a0 Debt securities
1,088
822
7,635
5,743
47
53
8,770
6,619
\u2013\u00a0 Deposits
0
0
57,063
50,257
13
0
57,076
50,257
\u2013\u00a0 Trading securities
3,604
1,952
41
273
0
1
3,645
2,226
\u2013\u00a0 Derivatives
41
40
24,437
33,200
670
678
25,148
33,917
4,733
2,814
89,175
89,473
729
732
94,638
93,019
The following methods and assumptions were used by ING Group to estimate the fair value of the financial
instruments:
Equity securities
Instrument description: Equity securities include stocks and shares, corporate investments and private
equity investments.
Valuation: If available, the fair values of publicly traded equity securities and private equity securities are
based on quoted market prices. In absence of active markets, fair values are estimated by analysing the
investee\u2019s financial position, result, risk profile, prospect, price, earnings comparisons and revenue multiples.
Additionally, reference is made to valuations of peer entities where quoted prices in active markets are
available. For equity securities best market practice will be applied using the most relevant valuation
method. All non-listed equity investments, including investments in private equity funds, are subject to a
standard review framework which ensures that valuations reflect the fair values.
Fair value hierarchy: The majority of equity securities are publicly traded and quoted prices are readily and
regularly available. Hence, these securities are classified as Level 1.\u00a0 Equity securities which are not traded in
active markets mainly include corporate investments, fund investments and other equity securities and are
classified as Level 3.
Debt securities
Instrument description: Debt securities include government bonds, financial institutions bonds and Asset-
backed securities (ABS).
Valuation: Where available, fair values for debt securities are generally based on quoted market prices.
Quoted market prices are obtained from an exchange market, dealer, broker, industry group, pricing service,
or regulatory service. The quoted prices from non-exchange sources are reviewed on their tradability of
market prices. If quoted prices in an active market are not available, fair value is based on an analysis of
available market inputs, which includes consensus prices obtained from one or more pricing services.
Furthermore, fair values are determined by valuation techniques discounting expected future cash flows
using market interest rate curves, referenced credit spreads, maturity of the investment, and estimated
prepayment rates where applicable.
Fair value hierarchy: Government bonds and financial institutions bonds are generally traded in active
markets, where quoted prices are readily and regularly available and are hence, classified as Level 1. The
remaining positions are classified as Level 2 or Level 3. Asset backed securities for which no active market is
available and a wide discrepancy in quoted prices exists, are classified as Level 3.
Derivatives
Instrument description: Derivatives contracts can either be exchange-traded or over the counter (OTC).
Derivatives include interest rate derivatives, FX derivatives, Credit derivatives, Equity derivatives and
commodity derivatives.
Valuation: The fair value of exchange-traded derivatives is determined using quoted market prices in an
active market and are classified as Level 1 of the fair value hierarchy. For instruments that are not actively
traded, fair values are estimated based on valuation techniques. OTC derivatives and derivatives trading in
an inactive market are valued using valuation techniques. The valuation techniques and inputs depend on
the type of derivatives and the nature of the underlying instruments. The principal techniques used to value
these instruments are based on (amongst others) discounted cash flows, option pricing models and Monte
Carlo simulations. These valuation models calculate the present value of expected future cash flows, based
on \u2018no-arbitrage\u2019 principles. The models are commonly used in the financial industry and inputs to the
validation models are determined from observable market data where possible. Certain inputs may not be
observable in the market, but can be determined from observable prices via valuation model calibration
procedures. These inputs include prices available from exchanges, dealers, brokers or providers of pricing,
yield curves, credit spreads, default rates, recovery rates, dividend rates, volatility of underlying interest
rates, equity prices, and foreign currency exchange rates and reference is made to quoted prices, recently
executed trades, independent market quotes and consensus data, where available.
For uncollateralised OTC derivatives, ING applies Credit Valuation Adjustment to correctly reflect the
counterparty credit risk in the valuation and Debit Valuation Adjustments to reflect the credit risk of ING for
its counterparty. In addition, for these derivatives ING applies Funding Valuation Adjustment. See sections
CVA/DVA and FVA in section c) Valuation Adjustments for more details regarding the calculation.
Fair value hierarchy: The majority of the derivatives are priced using observable inputs and are classified as
Level 2. Derivatives for which the input cannot be implied from observable market data are classified as
Level 3.
Loans and receivables
Instrument description: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables carried at fair value includes
trading loans, being securities lending and similar agreement comparable to collateralised lending,
syndicated loans, loans expected to be sold and receivables with regards to reverse repurchase
transactions.
Valuation: The fair value of loans and receivables is generally estimated by discounting expected future cash
flows using a discount rate that reflects credit risk, liquidity, and other current market conditions. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour.
Fair value hierarchy: Loans and receivables are predominantly classified as Level 2. Loans and receivables
for which current market information about similar assets to use as observable, corroborated data for all
significant inputs into a valuation model is not available, are classified as Level 3.
Financial liabilities at fair value through profit and loss
Instrument description: Financial liabilities at fair value through profit and loss include debt securities, debt
instruments, primarily comprised of structured notes, which are held at fair value under the fair value
option. Besides that, it includes derivative contracts and repurchase agreements.
Valuation: The fair values of securities in the trading portfolio and other liabilities at fair value through profit
or loss are based on quoted market prices, where available. For those securities not actively traded, fair
values are estimated based on internal discounted cash flow valuation techniques using interest rates and
credit spreads that apply to similar instruments.
Fair value hierarchy: The majority of the derivatives and debt instruments are classified as Level 2.
Derivatives and debt instruments for which the input cannot be derived from observable market data are
classified as Level 3.
e) Transfers between Level 1 and 2
As a consequence of change in observable inputs, ING recorded an EUR 2.4 billion transfer from Level 2 to
Level 1 in debt securities measured at fair value through other comprehensive income. Furthermore, EUR
1.7 billion transfers from Level 1 to Level 2 were recorded in the reporting period 2023.
f) Level 3: Valuation techniques and inputs used
Financial assets and liabilities in Level 3 include both assets and liabilities for which the fair value was
determined using (i) valuation techniques that incorporate unobservable inputs as well as (ii) quoted prices
which have been adjusted to reflect that the market was not actively trading at or around the balance sheet
date. Unobservable inputs are inputs which are based on ING\u2019s own assumptions about the factors that
market participants would use in pricing an asset or liability, developed based on the best information
available in the circumstances. Unobservable inputs may include volatility, correlation, spreads to discount
rates, default rates and recovery rates, prepayment rates, and certain credit spreads. Valuation techniques
that incorporate unobservable inputs are sensitive to the inputs used.
Of the total amount of financial assets classified as Level 3 as at 31\u00a0December 2023 of EUR 9.1 billion
(31\u00a0December 2022: EUR 7.5 billion), an amount of EUR 7.0 billion (76.7%) (31\u00a0December 2022: EUR 2.2
billion, being 29.2%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial assets includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 4.2
billion) which relates to financial assets that are part of structures that are designed to be fully neutral in
terms of market risk. Such structures include various financial assets and liabilities for which the overall
sensitivity to market risk is insignificant. Whereas the fair value of individual components of these structures
may be determined using different techniques and the fair value of each of the components of these
structures may be sensitive to unobservable inputs, the overall sensitivity is by design not significant.
The remaining EUR 1.8 billion (31\u00a0December 2022: EUR 1.1 billion of the fair value classified in Level 3
financial assets is established using valuation techniques that incorporates certain inputs that are
unobservable.
Of the total amount of financial liabilities classified as Level 3 as at 31\u00a0December 2023 of EUR 0.7 billion
(31\u00a0December 2022: EUR 0.7 billion), an amount of EUR 0.4 billion (50.0%) (31\u00a0December 2022: EUR 0.02
billion, being 2.5%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial liabilities includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 0.6
billion) which relates to financial liabilities that are part of structures that are designed to be fully neutral in
terms of market risk. As explained above, the fair value of each of the components of these structures may
be sensitive to unobservable inputs, but the overall sensitivity is by design not significant.
The remaining EUR 0.1 billion (31\u00a0December 2022: EUR 0.1 billion of the fair value classified in Level 3
financial liabilities is established using valuation techniques that incorporates certain inputs that are
unobservable.
The table below provides a summary of the valuation techniques, key unobservable inputs and the lower
and upper range of such unobservable inputs, by type of Level 3 asset/liability. The lower and upper range
mentioned in the overview represent the lowest and highest variance of the respective valuation input as
actually used in the valuation of the different financial instruments. Amounts and percentages stated are
unweighted. The range can vary from period to period subject to market movements and change in Level\u00a03
position. Lower and upper bounds reflect the variability of Level 3 positions and their underlying valuation
inputs in the portfolio, but do not adequately reflect their level of valuation uncertainty. For valuation
uncertainty assessment, reference is made to section Sensitivity analysis of unobservable inputs (Level 3).
Valuation techniques and range of unobservable inputs (Level 3)
Assets
Liabilities
Valuation techniques
Significant unobservable inputs
Lower range
Upper range
In EUR million
2023
2022
2023
2022
2023
2022
2023
2022
At fair value through profit or loss
Debt securities
3,364
3,447
0
1
Price based
Price (%)
0%
0%
122%
125%
Price (price per share)
97
208
236
208
Present value techniques
Credit spread (bps)
94
60
94
100
Price (%)
n.a.
97%
n.a.
100%
Equity securities
150
156
Price based
Price (price per share)
0
0
5,457
5,457
Loans and advances
2,298
1,485
13
Price based
Price (%)
0%
0%
117%
100%
Present value techniques
Credit spread (bps)
1
2
12
12
(Reverse) repo's
1,832
1,062
Present value techniques
Interest rate (%)
n.a.
3%
n.a.
5%
Structured notes
3
47
53
Price based
Price (%)
88%
84%
96%
107%
Option pricing model
Equity volatility (%)
9%
13%
23%
42%
Equity/Equity correlation
0.8
0.5
0.9
1.0
Equity/FX correlation
-0.2
-0.4
0.6
0.6
Dividend yield (%)
0%
0%
4%
8%
Present value techniques
Credit spreads (bps)
100
96
101
96
Derivatives
\u2013\u00a0\u00a0Rates
283
431
301
476
Option pricing model
Interest rate volatility (bps)
1
49
3
148
Present value techniques
Reset spread (%)
n.a.
0%
n.a.
1%
Interest rate (%)
n.a.
2%
n.a.
2%
Prepayment rate (%)
0%
5%
0%
13%
\u2013\u00a0\u00a0FX
2
5
3
4
Option pricing model
Implied volatility (%)
3%
6%
18%
20%
\u2013\u00a0\u00a0Credit
216
13
343
175
Present value techniques
Credit spread (bps)
3
5
149
623
Price based
Price (%)
0%
0%
100%
100%
\u2013\u00a0\u00a0Equity
20
33
17
22
Option pricing model
Equity volatility (%)
12%
0%
75%
77%
Equity/Equity correlation
0.2
0.5
1.0
0.9
Equity/FX correlation
-0.5
-0.5
1.0
0.1
Dividend yield (%)
0%
1%
14%
14%
Price based
Price (%)
0%
n.a
21%
n.a
\u2013\u00a0\u00a0Other
14
1
7
Option pricing model
Commodity volatility (%)
11%
0%
94%
63%
At fair value through other comprehensive income
\u2013\u00a0\u00a0Loans and advances
676
643
Present value techniques
Prepayment rate (%)
n.a.
6%
n.a.
6%
Price based
Price (%)
85%
67%
96%
99%
\u2013\u00a0\u00a0Equity
263
247
Present value techniques
Credit spread (bps)
5.2
6.7
5.2
6.7
Interest rate (%)
4%
4%
4%
4%
Price based
Price (%)
122%
n.a
122%
n.a
Price based
Other (EUR)
n.a
70
n.a
90
Total
9,117
7,526
729
732
Price
For securities where market prices are not available, fair value is measured by comparison with observable
pricing data from similar instruments. Prices of 0% are distressed to the point that no recovery is expected,
while prices significantly in excess of 100% or par are expected to pay a yield above current market rates.
Credit spreads
Credit spread is the premium above a benchmark interest rate required by the market participant to accept
a lower credit quality. Higher credit spreads indicate lower credit quality and a lower value of an asset.
Volatility
Volatility is a measure for variation of the price of a financial instrument or other valuation input over time.
Volatility is one of the key inputs in option pricing models. Typically, the higher the volatility, the higher
value of the option. Volatility varies by the underlying reference (equity, commodity, foreign currency and
interest rates), by strike, and maturity of the option. The minimum level of volatility is 0% and there is no
theoretical maximum.
Correlation
Correlation is a measure of dependence between two underlying references which is relevant for valuing
derivatives and other instruments having more than one underlying reference. High positive correlation
(close to 1) indicates strong positive (statistical) relationship, where underliers move, everything else equal,
into the same direction. The same holds for a high negative correlation.
Interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or
borrowed.
Reset spread
Reset spreads are key inputs to mortgage linked prepayment swaps valuation. Reset spread is the future
spread at which mortgages will re-price at interest rate reset dates.
Dividend yield
Dividend yield is an important input for equity option pricing models showing how much dividends a
company is expected to pay out each year relative to its share price. Dividend yields are generally expressed
as an annualised percentage of share price.
Prepayment rate
Prepayment rate is a key input to mortgage and loan valuation. Prepayment rate is the estimated rate at
which mortgage borrowers will repay their mortgages early, e.g. 5% per year. Prepayment rate and reset
spread are key inputs to mortgage linked prepayment swaps valuation.
Level 3: Changes during the period
Changes in Level 3 Financial assets
Trading assets
Non-trading derivatives
Financial assets
mandatorily at FVPL
Financial assets
designated at FVPL
Financial assets at
FVOCI
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
873
822
421
1
1,849
1,862
3,492
2,480
891
1,063
7,526
6,228
Realised gain/loss recognised in the statement of profit or loss during the period 1
235
53
-142
52
-33
-57
-383
122
8
-322
178
Revaluation recognised in other comprehensive income during the period 2
-6
-84
-6
-84
Purchase of assets
1,246
694
76
15
2,208
1,586
873
772
331
221
4,735
3,288
Sale of assets
-889
-49
-55
-4
-1,109
-669
-138
-191
-243
-275
-2,433
-1,187
Maturity/settlement
-1,005
-511
-15
-2
-576
-617
-292
-22
-59
-1,910
-1,188
Reclassifications
723
-18
5
10
728
-8
Transfers into Level 3
879
288
474
981
605
1
322
-43
1,860
1,646
Transfers out of Level 3
-459
-442
-115
-534
-856
-994
-1,414
Exchange rate differences
-31
18
-9
14
-9
-12
-10
49
-59
68
Changes in the composition of the group and other changes
2
-8
-6
0
Closing balance
848
873
286
421
3,499
1,849
3,547
3,492
938
891
9,118
7,526
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amounts includes EUR 316 million (2022: EUR -171 million) of unrealised gains and losses recognised in the statement of profit or loss.
2 Revaluation recognised in other comprehensive income is included on the line \u2018Net change in fair value of debt instruments at fair value through other comprehensive income\u2019.
In 2023, transfers into and out of Level 3 of financial assets mandatorily at fair value mainly relate to (long
term) reverse repurchase transactions for which the valuation being significantly impacted by unobservable
inputs and no longer significantly impacted by unobservable inputs, respectively.
In 2023, the transfer into Level 3 trading assets is mainly driven by debt securities that are part of a
structure transferred into level 3 due to market illiquidity which decreased observability for an input.
In 2022, the transfers into Level 3 mainly consisted of (non) trading derivatives that were transferred to
Level 3 as a result of the valuation being significantly impacted by unobservable inputs. Furthermore, it
relates to debt obligations of which the valuation is being significantly impacted by unobservable inputs.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss as shown in reclassifications. For further information on the
change in accounting policies, reference is made to Note 1 'Basis of preparation and material accounting
policy information'.
In 2022, following the enhancement of the significance assessment, transfers into and out of Level 3 of
financial assets mandatorily at fair value mainly relate to a portfolio of securitization loans. Furthermore,
transfers out of Level 3 relate to two syndicated deals due to the unobservable parameters were
insignificant.
In 2022, transfers into level 3 financial assets designated at fair value relate to government bonds of which
the valuation being significantly impacted by unobservable inputs.
Changes in Level 3 Financial liabilities
Trading liabilities
Non-trading
derivatives
Financial liabilities
designated as at fair
value through profit
or loss
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1
January
229
160
449
35
54
135
732
330
Realised gain/loss recognised
in the statement of profit or
loss during the period1
224
131
-151
59
-2
-10
72
179
Additions
53
124
72
16
18
13
142
153
Redemptions
-102
-38
-53
0
-2
-13
-156
-51
Maturity/settlement
-13
-282
-16
-7
-1
-71
-30
-360
Transfers into Level 3
40
254
0
368
32
88
72
710
Transfers out of Level 3
-49
-117
0
-21
-54
-88
-102
-226
Exchange rate differences
0
-3
0
0
0
0
0
-3
Closing balance
382
229
301
449
47
54
729
732
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amount
includes EUR 72 million (2022: EUR 179\u00a0million) of unrealised gains and losses recognised in the statement of profit or loss.
In 2023, financial liabilities transfers into and out of Level 3 mainly consisted of structured notes, measured
as designated at fair value through profit or loss. The structured notes were transferred out of Level 3 as the
valuation was no longer impacted by significantly unobservable inputs.
In 2022, the transfers into Level 3 mainly consisted of non-trading derivatives that were transferred to Level
3 as a result of the valuation being significantly impacted by unobservable inputs.
g) Recognition of unrealised gains and losses in Level 3
Amounts recognised in the statement of profit or loss relating to unrealised gains and losses during the year
that relates to Level 3 assets and liabilities are included in the line item \u2018Valuation results and net trading
income\u2019 in the statement of profit or loss.
h) Level 3: Sensitivity analysis of unobservable inputs
Where the fair value of a financial instrument is determined using inputs which are unobservable and which
have a more than insignificant impact on the fair value of the instrument, the actual value of those inputs at
the balance date may be drawn from a range of reasonably possible alternatives. In line with market
practice the upper and lower bounds of the range of alternative input values reflect a level of valuation
certainty. The actual levels chosen for the unobservable inputs in preparing the financial statements are
consistent with the valuation methodology used for fair valued financial instruments.
In practice valuation uncertainty is measured and managed per exposure to individual valuation inputs (i.e.
risk factors) at portfolio level across different product categories. Where the disclosure looks at individual
Level 3 inputs, the actual valuation adjustments may also reflect the benefits of portfolio offsets.
This disclosure does not attempt to indicate or predict future fair value movement. The numbers in isolation
give limited information as in most cases these Level 3 assets and liabilities should be seen in combination
with other instruments (for example as a hedge) that are classified as Level 2.
The valuation uncertainty in the table below is broken down by related risk class rather than by product. The
possible impact of a change of unobservable inputs in the fair value of financial instruments where
unobservable inputs are significant to the valuation is as follows:
Sensitivity analysis of Level 3 instruments
Positive fair\u00a0value
movements from
using reasonable
possible alternatives
Negative fair\u00a0value
movements from
using reasonable
possible alternatives
in EUR million
2023
2022
2023
2022
Equity (equity derivatives, structured notes)
18
12
-9
-6
Interest rates (Rates derivatives, FX derivatives)
3
22
0
-14
Credit (Debt securities, Loans, structured notes, credit derivatives)
45
32
-54
-28
Loans and advances
3
-17
-32
69
65
-80
-80
i) Financial instruments not measured at fair value
The following table presents the estimated fair values of the financial instruments not measured at fair
value in the statement of financial position.
Methods applied in determining fair values of financial assets and liabilities (carried at amortised cost)
Carrying Amount
Carrying amount
presented as fair value1
Level 1
Level 2
Level 3
Total fair value
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Loans and advances to banks
16,709
35,104
2,722
2,859
11,430
29,459
2,511
2,786
16,662
35,104
Loans and advances to customers
642,402
635,506
15,681
19,095
14,602
15,264
593,098
575,805
623,381
610,164
Securities at amortised cost
48,313
48,160
40,041
39,787
4,277
3,160
1,693
1,406
46,010
44,353
707,424
718,770
18,403
21,954
40,041
39,788
30,308
47,883
597,302
579,996
686,053
689,621
Financial liabilities
Deposits from banks
23,257
56,632
3,764
3,696
15,066
48,524
3,968
3,954
22,799
56,174
Customer deposits
650,267
640,770
556,060
589,851
52,486
35,123
41,063
15,331
649,609
640,306
Debt securities in issue
124,670
95,918
62,197
43,352
42,606
35,642
20,450
17,796
125,253
96,790
Subordinated loans
15,401
15,786
15,050
7,843
311
7,705
15,361
15,548
813,594
809,106
559,824
593,547
77,248
51,194
110,469
126,995
65,482
37,082
813,022
808,818
1 In accordance with IFRS and for the purpose of this disclosure, the carrying amount of financial instruments with an immediate on demand feature is presented as fair value
", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-665": { "value": "
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a \u2018Day One Profit or Loss\u2019) is deferred. ING Group defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Group recognises the difference as a
gain or loss at inception.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognisingDifferenceBetweenFairValueAtInitialRecognitionAndAmountDeterminedUsingValuationTechniqueExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-666": { "value": "Significant judgements and critical accounting estimates and assumptions: \u2022 Even if market prices are available, when markets are less liquid there may be a range of prices for the same security from different price sources. Selecting the most appropriate price requires judgement and could result in different estimates of fair value.\u00a0 \u2022 Valuation techniques are subjective in nature and significant judgement is involved in establishing fair values for certain financial assets and liabilities. Valuation techniques involve various assumptions regarding pricing factors. The use of different valuation techniques and assumptions could produce significantly different estimates of fair value.\u00a0 \u2022 Price testing is performed to assess whether the process of valuation has led to an appropriate fair value of the position and to minimise the potential risks of economic losses due to incorrect or misused models. \u2022 Assessing whether a market is active, and whether an input is observable and significant, requires judgement. ING Group categorises its financial instruments that are either measured in the statement of financial position at fair value or of which the fair value is disclosed, into a three-level hierarchy based on the observability and significance of the valuation inputs. The use of different approaches to assess whether a market is active, whether an input is observable, and whether an unobservable input is significant could produce different classification within the fair value hierarchy as well as potentially different deferral of the Day One Profit or Loss. \u2022 Reference is made to Note 35 'Fair value of assets and liabilities ' and to the \u2018Market risk\u2019 paragraph in the \u2018Risk management\u2019 section of the Annual Report for the basis of the determination of the fair value of financial instruments and related sensitivities. Significant judgements and critical accounting estimates and assumptions:The calculation of ECL requires a number of judgements and estimates. In particular:\u2022 ING Group makes various assumptions about the risk of default, the credit loss rates in case of a default and expected future cash flows. For collective provisions, ING Group applies significant judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection and calibration of relevant models. For Stage 3 individual provisioning, the determination and probabilities of restructuring and recovery scenarios as well as the amount and timing of expected future cash flows may be particularly subjective. \u2022 Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature. The use of alternate forward-looking macroeconomic scenarios can produce significantly different estimates of ECL. This is demonstrated in the sensitivity analysis in the \u2018Risk Management\u2019 section of the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant portfolios is disclosed. \u2022 When determining whether the credit risk on a financial asset has increased significantly (criteria for identifying a significant increase in credit risk), ING Group considers reasonable and supportable information to compare the risk of default occurring at reporting date with the risk of a default occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD rating to each financial asset, there is significant judgement used in determining the Stage allocation PD banding thresholds. The process of comparing a financial asset\u2019s PD with the PD banding thresholds determines its ECL Stage. Assets in Stage 1 are allocated a 12-month ECL, and those in Stage 2 are allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in assigning financial asset PDs and the PD banding thresholds constitute a significant judgement. Analysis of the sensitivity associated with the assessment of significant increase in credit risk is presented in the \u2018Risk Management\u2019 section of the Annual Report. \u2022 Judgement is exercised in management\u2019s evaluation of whether there is objective evidence that exposures are credit-impaired. \u2022 To reflect the risks that are not properly captured by the ECL models, a number of management adjustments to the model-based ECL were necessary as at 31 December 2023, which required significant judgement. Reference is made to the \u2018Management adjustments applied this year\u2019 paragraph in the \u2018Risk management\u2019 section of the Annual Report.Significant judgements:Significant management judgement is exercised in determining the accounting treatment of TLTRO transactions. In particular, ING Group applied judgement in:\u2022 assessing and concluding that in ING Group\u2019s view the rate under TLTRO is considered to be a market conforming rate and, hence, accounting for TLTRO in accordance with IFRS 9; \u2022 selecting accounting policies regarding the calculation of the effective interest rate under TLTRO.Significant judgements and critical accounting estimates and assumptions:Identification of impairment indicators as well as indicators of potential reversal of previous impairments of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate, requires significant judgement. When there is objective evidence of impairment or indicators that prior period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be determined. Estimation of VIU involves significant estimates and management assumptions. Please refer to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0 Significant judgements and critical accounting estimates and assumptions:The recognition and measurement of provisions is an inherently uncertain process involving using judgement to determine when a present obligation exists and estimates regarding probability, amounts and timing of cash flows. ING Group may become involved in governmental, regulatory, arbitration and legal proceedings and investigations and may be subject to third party claims. With or without reference to the above, ING Group may also offer compensation to certain of its customers. Judgement is required to assess whether a present obligation exists and to estimate the probability of an unfavourable outcome and the amount of potential loss. The degree of uncertainty and the method of making the accounting estimate depends on the individual case, its nature and complexity. Such cases are usually one of a kind. For the assessment of related provisions ING Group consults with internal and external legal experts. Even taking into consideration legal experts\u2019 advice, the probability of an outflow of economic benefits can still be uncertain and the provision recognised can remain sensitive to the assumptions used. Reference is made to Note 15 'Provisions'. For proceedings where it is not possible to make a reliable estimate of the expected financial effect, that could result from the ultimate resolution of the proceedings, no provision is recognised, however disclosure is included in the financial statements, where relevant. Reference is made to Note 42 'Legal proceedings'. Critical accounting estimates and assumptions for the reorganisation provision are in estimating the amounts and timing of cash flows as the announced transformation initiatives are implemented over a period of several years. Reference is made to Note 15 'Provisions'.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-668": { "value": "
1.5.4\u00a0 Derivatives and hedge accounting
IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to
continue with hedge accounting under IAS 39. ING Group decided to exercise this accounting policy choice
and did not adopt IFRS 9 hedge accounting as of 1 January 2018. Furthermore, ING Group applies fair value
hedge accounting for portfolio hedges of interest rate risk (macro fair value hedges) in accordance with the
EU carve-out version of IAS 39.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently measured at fair value. Fair values are obtained from quoted market prices in active
markets, including market transactions and valuation techniques (such as discounted cash flow models and
option pricing models), as appropriate. All derivatives are carried as assets when their fair value is positive
and as liabilities when their fair value is negative. Fair value movements on derivatives are presented in
profit or loss in Valuation result and net trading income, except for derivatives in either a formal hedge
relationship and so-called economic hedges that are not in a formal hedge accounting relationship where a
component is presented separately in interest result in line with ING Group\u2019s risk management strategy.
Embedded derivatives are separated from financial liabilities and other non-financial contracts and
accounted for as a derivative if, and only if:
1. the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
2. a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and
3. the combined instrument is not measured at fair value with changes in fair value reported in profit or
loss.
If an embedded derivative is separated, the host contract is accounted for as a similar free-standing
contract.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. ING Group designates
certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair
value hedge), hedges of highly probable future cash flows attributable to a recognised asset or liability or a
forecast transaction (cash flow hedge), or hedges of a net investment in a foreign operation. Hedge
accounting is used for derivatives designated in this way provided certain criteria are met.
At the inception of the transaction, ING Group documents the relationship between hedging instruments
and hedged items, its risk management objective, together with the methods selected to assess hedge
effectiveness. ING Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition \u2013 specific policies for hedges directly affected by IBOR reform
As explained in the \u2018IBOR Transition\u2019 paragraph of the \u2018Risk management\u2019 section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Group to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
\u2022 Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
\u2022 Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
\u2022 Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
\u2022 Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Group hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Group hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Group as at 31 December 2023 (mainly for WIBOR hedges).
ING Group will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note \u2018Risk management/ IBOR Transition\u2019 for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Group\u2019s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. Particularly,\u00a0
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2023, Phase 2
continued to be relevant for ING Group when ING actually transitioned its financial instruments (designated
in hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
\u2022 Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,
the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
\u2022 When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
\u2022 When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
\u2022 For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
\u2022 Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
Non-trading derivatives that do not qualify for hedge accounting
Derivative instruments that are used by ING Group as part of its risk management strategies, but which do
not qualify for hedge accounting under ING Group\u2019s accounting policies, are presented as non-trading
derivatives. Non-trading derivatives are measured at fair value with changes in the fair value taken to the
statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-667": { "value": "
1.5.4\u00a0 Derivatives and hedge accounting
IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to
continue with hedge accounting under IAS 39. ING Group decided to exercise this accounting policy choice
and did not adopt IFRS 9 hedge accounting as of 1 January 2018. Furthermore, ING Group applies fair value
hedge accounting for portfolio hedges of interest rate risk (macro fair value hedges) in accordance with the
EU carve-out version of IAS 39.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently measured at fair value. Fair values are obtained from quoted market prices in active
markets, including market transactions and valuation techniques (such as discounted cash flow models and
option pricing models), as appropriate. All derivatives are carried as assets when their fair value is positive
and as liabilities when their fair value is negative. Fair value movements on derivatives are presented in
profit or loss in Valuation result and net trading income, except for derivatives in either a formal hedge
relationship and so-called economic hedges that are not in a formal hedge accounting relationship where a
component is presented separately in interest result in line with ING Group\u2019s risk management strategy.
Embedded derivatives are separated from financial liabilities and other non-financial contracts and
accounted for as a derivative if, and only if:
1. the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
2. a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and
3. the combined instrument is not measured at fair value with changes in fair value reported in profit or
loss.
If an embedded derivative is separated, the host contract is accounted for as a similar free-standing
contract.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. ING Group designates
certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair
value hedge), hedges of highly probable future cash flows attributable to a recognised asset or liability or a
forecast transaction (cash flow hedge), or hedges of a net investment in a foreign operation. Hedge
accounting is used for derivatives designated in this way provided certain criteria are met.
At the inception of the transaction, ING Group documents the relationship between hedging instruments
and hedged items, its risk management objective, together with the methods selected to assess hedge
effectiveness. ING Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition \u2013 specific policies for hedges directly affected by IBOR reform
As explained in the \u2018IBOR Transition\u2019 paragraph of the \u2018Risk management\u2019 section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Group to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
\u2022 Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
\u2022 Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
\u2022 Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
\u2022 Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Group hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Group hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Group as at 31 December 2023 (mainly for WIBOR hedges).
ING Group will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note \u2018Risk management/ IBOR Transition\u2019 for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Group\u2019s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. Particularly,\u00a0
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2023, Phase 2
continued to be relevant for ING Group when ING actually transitioned its financial instruments (designated
in hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
\u2022 Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,
the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
\u2022 When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
\u2022 When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
\u2022 For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
\u2022 Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
Non-trading derivatives that do not qualify for hedge accounting
Derivative instruments that are used by ING Group as part of its risk management strategies, but which do
not qualify for hedge accounting under ING Group\u2019s accounting policies, are presented as non-trading
derivatives. Non-trading derivatives are measured at fair value with changes in the fair value taken to the
statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-669": { "value": "
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition \u2013 specific policies for hedges directly affected by IBOR reform
As explained in the \u2018IBOR Transition\u2019 paragraph of the \u2018Risk management\u2019 section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Group to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
\u2022 Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
\u2022 Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
\u2022 Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
\u2022 Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Group hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Group hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Group as at 31 December 2023 (mainly for WIBOR hedges).
ING Group will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note \u2018Risk management/ IBOR Transition\u2019 for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Group\u2019s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is \u2018economically equivalent\u2019 to the previous basis. Particularly,\u00a0
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2023, Phase 2
continued to be relevant for ING Group when ING actually transitioned its financial instruments (designated
in hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
\u2022 Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,
the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
\u2022 When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
\u2022 When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
\u2022 For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
\u2022 Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-670": { "value": "
1.5.5\u00a0 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the statement of
financial position when ING Group has a current legally enforceable right to set off the recognised amounts
and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.
Offsetting is applied to certain derivatives for which the services of a central clearing house or broker are
used.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-671": { "value": "
1.5.6\u00a0 Impairment of financial assets
An Expected Credit Loss (ECL) model is applied to financial assets accounted for at AC or FVOCI such as
loans, debt securities and lease receivables, as well as off-balance sheet items such as undrawn loan
commitments, certain financial guarantees issued, and undrawn committed revolving credit facilities. Under
the ECL model, ING Group calculates the expected credit losses (ECL) by considering on a discounted basis
the cash shortfall it would incur in case of a default and multiplying the shortfall by the probability of a
default occurring. The ECL is the sum of the probability-weighted outcomes. The ECL estimates are unbiased
and include reasonable and supportable information about past events, current conditions, and forecasts of
future economic conditions. ING Group\u2019s approach leverages the Advanced Internal Ratings Based (AIRB)
models that are used for regulatory purposes. Adjustments are applied to make these models suitable for
determining ECL. ECL is recognised on the balance sheet as loan loss provisions (LLP).
Three-stage approach
Financial assets are classified in one of the below three stages at each reporting date. A financial asset can
move between stages during its lifetime. The stages are based on changes in credit quality since initial
recognition and defined as follows:
\u2022 Stage 1
Financial assets that have not had a significant increase in credit risk since initial recognition (i.e. no
Stage 2 or 3 triggers apply). Assets are classified as Stage 1 upon initial recognition (with the exception of
purchased or originated credit impaired (POCI) assets) and ECL is determined by the probability that a
default occurs in the next 12 months (12 months ECL);
\u2022 Stage 2
Financial assets showing a significant increase in credit risk since initial recognition. For assets in Stage 2
ECL reflects an estimate on the credit losses over the remaining maturity of the asset (lifetime ECL); or
\u2022 Stage 3
Financial assets that are credit-impaired. Also for these assets ECL is determined over the remaining
maturity of the asset.
Significant increase in credit risk
ING Group established a framework, incorporating quantitative and qualitative indicators, to identify and
assess significant increases in credit risk (SICR). This is used to determine the appropriate ECL Stage for each
financial asset.
The main determinate of SICR is a quantitative test, whereby the lifetime Probability of Default (PD) of an
asset at each reporting date is compared against its lifetime PD determined at the date of initial recognition.
If the delta is above pre-defined absolute or relative thresholds the item is considered to have experienced a
SICR. Furthermore, any facility which shows an increase of 200% between the PD at the date of initial
recognition and the lifetime PD at the reporting date (i.e. threefold increase in PD) must be classified as
Stage 2. This is considered a backstop within the quantitative assessment of SICR. Refer to \u2018Criteria for
identifying a significant increase in credit risk\u2019 in the \u2018Risk Management\u2019 section of the Annual Report for
more details on relative and absolute PD thresholds, including quantitative disclosures on those thresholds.
Consequently, if the above quantitative SICR thresholds are exceeded, the item moves from Stage 1 to Stage
2 (unless the item is credit-impaired). In these instances, items are no longer assigned a 12-month ECL and
instead are assigned a lifetime ECL. Items can return to Stage 1 if there is sufficient evidence that there is no
longer a significant increase in credit risk.
ING Group also relies on a number of qualitative indicators to identify and assess SICR. These include:
\u2022 Forbearance status;
\u2022 Watch List status;
\u2022 Intensive care management;
\u2022 Collective SICR assessment;
\u2022 Substandard Internal rating; and
\u2022 Arrears status (including 30 days past due used as a backstop).
An asset that is in Stage 2 will move back to Stage 1 when none of the above criteria are in place anymore.
However, if the asset was moved to Stage 2 based on the forbearance status, then the asset stays in Stage
2 for at least 24 months. If the asset was classified as Stage 2 due to 30 days past due trigger, then the
asset is moved back to Stage 1 only after three months from when the trigger no longer applies.
Credit-impaired financial assets (Stage 3)
Financial assets are assessed for credit-impairment at each reporting date and more frequently when
circumstances warrant further assessment. Evidence of credit-impairment includes arrears of over 90 days
on any material credit obligation, indications that the borrower is experiencing significant financial difficulty,
a breach of contract, bankruptcy or distressed restructuring. The definition of credit-impaired under IFRS 9
(Stage 3) is aligned with the definition of default used by ING Group for internal risk management purposes,
which is also the definition used for regulatory purposes.
An asset (other than a POCI asset) that is in Stage 3 will move back to Stage 2 when, as at the reporting
date, it is no longer considered to be credit-impaired subject to certain probation periods. The asset will
migrate back to Stage 1 when its credit risk at the reporting date is no longer considered to have increased
significantly since initial recognition.
Macroeconomic scenarios
ING Group has established a quarterly process whereby forward-looking macroeconomics scenarios and
probability weightings are developed for the purpose of ECL. ING Group applies data predominantly from a
leading service provider enriched with the internal ING Group view. A baseline, up-scenario and a down-
scenario are determined to reflect an unbiased and probability-weighted ECL amount. As a baseline
scenario, ING Group applies the market-neutral view combining consensus forecasts for economic variables
such as unemployment rates, GDP growth, house prices, commodity prices, and short-term interest rates.
Applying market consensus in the baseline scenario ensures unbiased estimates of the expected credit
losses.
The alternative scenarios are based on observed forecast errors in the past, adjusted for the risks affecting
the economy today and the forecast horizon. The probabilities assigned are based on the likelihoods of
observing the three scenarios and are derived from confidence intervals on a probability distribution. The
forecasts for the economic variables are adjusted on a quarterly basis.
The probability weights applied to each of the three scenarios
ING Group uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and
downside). Management approach used to determine the weights of each scenario and in selecting the
parts of the distribution of forecast errors from which the weights are derived and disclosed in the
\u2018Alternative scenarios and probability weights\u2019 and the sensitivity analysis in the \u2018Risk Management\u2019 section
of the Annual Report.
Measurement of ECL
ING Group applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Group applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors\u2019 ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.
For the purpose of ECL, ING Group\u2019s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Group estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Group\u2019s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
Purchased or Originated Credit Impaired (POCI) assets
POCI assets are financial assets that are credit-impaired on initial recognition. Impairment on a POCI asset is
determined based on lifetime ECL from initial recognition. POCI assets are recognised initially at an amount
net of ECL and are measured at AC using a credit-adjusted effective interest rate. In subsequent periods any
changes to the estimated lifetime ECL are recognised in profit or loss. Favourable changes are recognised as
an impairment gain even if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at
origination.
Write-off and debt forgiveness
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovery and/or collectability of amounts due. The following events can lead to a write-off:
\u2022 After a restructuring has been completed and there is a high improbability of recovery of part of the
remaining loan exposure (including partial debt forgiveness);
\u2022 In a bankruptcy liquidation scenario;
\u2022 After divestment or sale of a credit facility at a discount; and
\u2022 Specific fraud cases with no recourse options.
When a loan is uncollectable, it is written off against the related loan loss provision. Subsequent recoveries
of amounts previously written off are recognised in \u2018Addition to loan loss provisions\u2019 in the Consolidated
statement of profit or loss.
Debt forgiveness (or debt settlement) involves write-off but additionally involves the forgiveness of a legal
obligation, in whole or in part. This means that ING Group forfeits the legal right to recover the debt. As a
result, the financial asset needs to be derecognised.
Presentation of ECL
ECL for financial assets measured at AC are deducted from the gross carrying amount of the assets. For
debt instruments at FVOCI, the ECL is recognised in OCI, instead of deducted the carrying amount of the
asset. ECL also reflects any credit losses related to the portion of the loan commitment that is expected to
be drawn down over the remaining life of the instrument. The ECL on issued financial guarantee contracts,
in scope of IFRS 9 and not measured at FVPL, are recognised as liabilities and presented in Other provisions.
ECL are presented in profit or loss in Addition to loan loss provision.
Significant judgements and critical accounting estimates and assumptions:
The calculation of ECL requires a number of judgements and estimates. In particular:
\u2022 ING Group makes various assumptions about the risk of default, the credit loss rates in case of a
default and expected future cash flows. For collective provisions, ING Group applies significant
judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection
and calibration of relevant models. For Stage 3 individual provisioning, the determination and
probabilities of restructuring and recovery scenarios as well as the amount and timing of expected
future cash flows may be particularly subjective.
\u2022 Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature.
The use of alternate forward-looking macroeconomic scenarios can produce significantly different
estimates of ECL. This is demonstrated in the sensitivity analysis in the \u2018Risk Management\u2019 section of
the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant
portfolios is disclosed.
\u2022 When determining whether the credit risk on a financial asset has increased significantly (criteria for
identifying a significant increase in credit risk), ING Group considers reasonable and supportable
information to compare the risk of default occurring at reporting date with the risk of a default
occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD
rating to each financial asset, there is significant judgement used in determining the Stage allocation
PD banding thresholds. The process of comparing a financial asset\u2019s PD with the PD banding thresholds
determines its ECL Stage. Assets in Stage 1 are allocated a 12-month ECL, and those in Stage 2 are
allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in
assigning financial asset PDs and the PD banding thresholds constitute a significant judgement.
Analysis of the sensitivity associated with the assessment of significant increase in credit risk is
presented in the \u2018Risk Management\u2019 section of the Annual Report.
\u2022 Judgement is exercised in management\u2019s evaluation of whether there is objective evidence that
exposures are credit-impaired.
\u2022 To reflect the risks that are not properly captured by the ECL models, a number of management
adjustments to the model-based ECL were necessary as at 31 December 2023, which required
significant judgement. Reference is made to the \u2018Management adjustments applied this year\u2019
paragraph in the \u2018Risk management\u2019 section of the Annual Report.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-672": { "value": "
Measurement of ECL
ING Group applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Group applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors\u2019 ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.
For the purpose of ECL, ING Group\u2019s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Group estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Group\u2019s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
1.16\u00a0 Irrevocable Payment Commitments on contributions to SRF and DGS
ING makes contributions to the Single Resolution Fund (SRF) and Deposit Guarantee Schemes (DGS). The
annual contributions are paid in cash or, in some cases, partly using Irrevocable Payment Commitments
(IPCs) that become payable if and when called. Cash contributions are accounted for as levies as described
in section 1.15 above while IPCs are disclosed as contingent liabilities in Note 41 'Contingent liabilities and
commitments'. Cash collateral posted on IPCs to the SRF is accounted for as an interest bearing financial
asset at amortised cost. Government bonds posted as collateral on IPCs to DGS continue to be recognised as
assets of ING as securities at amortised cost.
Financial assets received as collateral
The financial assets received as collateral that can be sold or repledged in absence of default by the owner
of the collateral consists of securities obtained through reverse repurchase transactions and securities
borrowing transactions.
These transactions are generally conducted under standard market terms for most repurchase transactions
and the recipient of the collateral has unrestricted right to sell or repledge it, provided that the collateral (or
equivalent collateral) is returned to the counterparty at term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-674": { "value": "
1.6\u00a0 Consolidation
ING Group comprises ING Groep N.V. (the Parent Company), ING Bank N.V. and all other subsidiaries.
Subsidiaries are entities controlled by ING Groep N.V. Control exists if ING Groep N.V. is exposed to or has
rights to variable returns and has the ability to affect those returns through the power over the subsidiary.
For interests in structured entities, the existence of control requires judgement as these entities are
designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. This
judgement includes, for example, the involvement in the design of the structured entity, contractual
arrangements that give rights to direct the structured entities relevant activities and commitment to ensure
that the structured entity operates as designed.
Transactions between ING Groep N.V. and its subsidiaries are eliminated on consolidation. Reference is
made to Note 44 'Principal subsidiaries, investments in associates and joint ventures' for a list of principal
subsidiaries and their statutory place of incorporation and a description of ING's activities involving
structured entities is included in Note 45 'Structured entities'.
A list containing the information referred to in Section 379 (1), Book 2 of the Dutch Civil Code has been filed
with the office of the Commercial Register of Amsterdam, in accordance with Section 379 (5), Book 2 of the
Dutch Civil Code.
ING Groep N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company\u2019s own funds over the sum of the
paid-up capital and reserves required by law. Certain Group companies are also subject to other restrictions
in certain countries, in addition to the restrictions on the amount of funds that may be transferred in the
form of dividends, or otherwise, to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which the subsidiaries operate, other limitations exist in certain
countries.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-673": { "value": "
1.6\u00a0 Consolidation
ING Group comprises ING Groep N.V. (the Parent Company), ING Bank N.V. and all other subsidiaries.
Subsidiaries are entities controlled by ING Groep N.V. Control exists if ING Groep N.V. is exposed to or has
rights to variable returns and has the ability to affect those returns through the power over the subsidiary.
For interests in structured entities, the existence of control requires judgement as these entities are
designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. This
judgement includes, for example, the involvement in the design of the structured entity, contractual
arrangements that give rights to direct the structured entities relevant activities and commitment to ensure
that the structured entity operates as designed.
Transactions between ING Groep N.V. and its subsidiaries are eliminated on consolidation. Reference is
made to Note 44 'Principal subsidiaries, investments in associates and joint ventures' for a list of principal
subsidiaries and their statutory place of incorporation and a description of ING's activities involving
structured entities is included in Note 45 'Structured entities'.
A list containing the information referred to in Section 379 (1), Book 2 of the Dutch Civil Code has been filed
with the office of the Commercial Register of Amsterdam, in accordance with Section 379 (5), Book 2 of the
Dutch Civil Code.
ING Groep N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company\u2019s own funds over the sum of the
paid-up capital and reserves required by law. Certain Group companies are also subject to other restrictions
in certain countries, in addition to the restrictions on the amount of funds that may be transferred in the
form of dividends, or otherwise, to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which the subsidiaries operate, other limitations exist in certain
countries.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-675": { "value": "
ING Groep N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company\u2019s own funds over the sum of the
paid-up capital and reserves required by law. Certain Group companies are also subject to other restrictions
in certain countries, in addition to the restrictions on the amount of funds that may be transferred in the
form of dividends, or otherwise, to the parent company.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-676": { "value": "
1.7\u00a0 Segment reporting
An operating segment is a distinguishable component of ING Group, engaged in providing products or
services, whose operating results are regularly reviewed by the Executive Board of ING Group and the
Management Board Banking (together the Chief Operating Decision Maker (CODM)) to make decisions about
resources to be allocated to the segments and assess its performance. A geographical area is a
distinguishable component of ING Group engaged in providing products or services within a particular
economic environment that is subject to risks and returns that differ from those of segments operating in
other economic environments.
The CODM reviews and assesses ING Group's performance primarily by line of business. As a result, ING
identified five operating segments which are also disclosed as reportable segments. Additionally, the CODM
receives information by geographical area based on the location of the office from which transactions are
originated.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-677": { "value": "
1.8\u00a0 Hyperinflation accounting
Since the second quarter of 2022, T\u00fcrkiye has been considered a hyperinflationary economy for accounting
purposes. As ING Group has a subsidiary in T\u00fcrkiye, ING Group has applied IAS 29 \u2018Financial Reporting in
Hyperinflationary Economies\u2019 to its operations since 2022 as if the economy in T\u00fcrkiye had always been
hyperinflationary. Given that ING Group presents its results in EUR, comparatives do not get restated. As a
result, 2021 comparatives were not impacted by IAS 29, while 2022 comparatives show the impact of the
first-time application of IAS 29, as well as the effect for 2022. IAS 29 continued to be relevant for ING\u2019s
operations in T\u00fcrkiye in 2023. Under IAS 29, the results of the operations in T\u00fcrkiye should be stated in
terms of the current purchasing power at the reporting date. For that, the consumer price index (CPI) as
determined by the Turkish Statistical Institute was used. The CPI for T\u00fcrkiye (2003=100) at 31 December
2023 was 1,859.38 and at 31 December 2022 was 1,128.45 (movement 2023: 64.77%; movement 2022:
64.27%). The effect of such restatement for inflation in the current period of the statement of
comprehensive income and the balance sheet has been recognised in the statement of profit or loss within
\u2018Other net income\u2019 as a \u2018Net monetary gain or loss\u2019. The net monetary loss for the period represents the loss
of purchasing power by the net monetary position (monetary assets exceeding monetary liabilities) of ING
T\u00fcrkiye.
After the application of the above restatement procedures in Turkish Lira under IAS 29, the financial position
and the results for the period of ING T\u00fcrkiye are translated and presented in EUR at the exchange rate on 31
December 2023. For the statement of comprehensive income this is in contrast with the usual translation
procedures where items of comprehensive income are translated at the exchange rate at the date of
transaction. Furthermore, ING Group selected to present both the restatement effect resulting from
restating ING Group\u2019s interest in the equity of ING T\u00fcrkiye as required by IAS 29, and the translation effect
from translating at a closing rate that differs from the previous closing rate, in the Currency translation
reserve.", "dimensions": { "concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-678": { "value": "
1.9\u00a0 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of ING Group\u2019s entities are measured using the currency
of the primary economic environment in which the entity operates (the functional currency). The
Consolidated financial statements are presented in euros, which is ING Group\u2019s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing
at the date of the transactions. Exchange rate differences resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement of profit or loss, except when deferred in
equity as part of qualifying cash flow hedges or qualifying net investment hedges.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
Exchange rate differences on non-monetary items, measured at fair value through profit or loss, are
reported as part of the fair value gain or loss. Non-monetary items are retranslated at the date the fair
value is determined. Exchange rate differences on non-monetary items measured at fair value through
other comprehensive income are included in other comprehensive income and get accumulated in the
revaluation reserve in equity.
Exchange rate differences in the statement of profit or loss are generally included in \u2018Valuation results and
net trading income\u2019. Reference is made to Note 22 \u2018Valuation results and net trading income\u2019, which
discloses the amounts included in the statement of profit or loss. Exchange rate differences relating to the
disposal of debt and FVPL equity securities are considered to be an inherent part of the capital gains and
losses recognised in Investment income. As mentioned below, in Group companies relating to the disposals
of group companies, any exchange rate difference deferred in equity is recognised in the statement of profit
or loss in \u2018Result on disposal of group companies\u2019. Reference is also made to Note 19 \u2018Equity\u2019, which discloses
the amounts included in the statement of profit or loss.
Group companies
The results and financial positions of all group companies that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
\u2022 Assets and liabilities are translated at the closing rate at the date of the statement of financial position;\u00a0
\u2022 Income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions). However, under hyperinflation
accounting, income and expenses of ING T\u00fcrkiye are translated at the closing rate; and
\u2022 All resulting exchange rate differences are recognised in a separate component of equity.\u00a0
On consolidation, exchange rate differences arising from the translation of a monetary item that forms part
of the net investment in a foreign operation, and of borrowings and other instruments designated as
hedges of such investments, are taken to shareholders\u2019 equity. When a foreign operation is sold, the
corresponding exchange rate differences are recognised in the statement of profit or loss as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at the exchange rate prevailing at the balance sheet
date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-679": { "value": "
Functional and presentation currency
Items included in the financial statements of each of ING Group\u2019s entities are measured using the currency
of the primary economic environment in which the entity operates (the functional currency). The
Consolidated financial statements are presented in euros, which is ING Group\u2019s presentation currency.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-681": { "value": "
1.10\u00a0 Investments in associates and joint ventures
Associates are all entities over which ING Group has significant influence but not control. Significant
influence is the ability to participate in the financial and operating policies of the investee. It generally
results from a shareholding of between 20% and 50% of the voting rights or through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;\u00a0
\u2022 Participation in the policymaking process; and\u00a0
\u2022 Interchange of managerial personnel.\u00a0
Joint ventures are entities over which ING Group has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Group\u2019s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Group\u2019s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Group\u2019s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Group and its associates and joint ventures are eliminated to
the extent of ING Group\u2019s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Group.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-680": { "value": "
1.10\u00a0 Investments in associates and joint ventures
Associates are all entities over which ING Group has significant influence but not control. Significant
influence is the ability to participate in the financial and operating policies of the investee. It generally
results from a shareholding of between 20% and 50% of the voting rights or through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;\u00a0
\u2022 Participation in the policymaking process; and\u00a0
\u2022 Interchange of managerial personnel.\u00a0
Joint ventures are entities over which ING Group has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Group\u2019s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Group\u2019s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Group\u2019s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Group and its associates and joint ventures are eliminated to
the extent of ING Group\u2019s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Group.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-682": { "value": "
1.10\u00a0 Investments in associates and joint ventures
Associates are all entities over which ING Group has significant influence but not control. Significant
influence is the ability to participate in the financial and operating policies of the investee. It generally
results from a shareholding of between 20% and 50% of the voting rights or through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;\u00a0
\u2022 Participation in the policymaking process; and\u00a0
\u2022 Interchange of managerial personnel.\u00a0
Joint ventures are entities over which ING Group has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Group\u2019s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Group\u2019s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Group\u2019s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Group and its associates and joint ventures are eliminated to
the extent of ING Group\u2019s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Group.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-683": { "value": "
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
Significant judgements and critical accounting estimates and assumptions:
Identification of impairment indicators as well as indicators of potential reversal of previous impairments
of ING Group\u2019s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate,
requires significant judgement. When there is objective evidence of impairment or indicators that prior
period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be
determined. Estimation of VIU involves significant estimates and management assumptions. Please refer
to note 8 \u2018Investments in associates and joint ventures\u2019.\u00a0 \u00a0 \u00a0
Impairment of goodwill and other non-financial assets
ING Group assesses at each reporting period, whether there is an indication that a non-financial asset may
be impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-685": { "value": "
1.11\u00a0 Property and equipment
Property in own use
Land and buildings held for own use are stated at fair value at the balance sheet date. Depreciation is
recognised on a straight-line basis over the estimated useful life (in general 20\u201350 years). On disposal, the
related revaluation reserve is transferred to retained earnings.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the
assets is depreciated on a straight line basis over their estimated useful lives, which are generally as follows:
for data processing equipment two to five years, and four to ten years for fixtures and fittings.
Disposals of property and equipment
The difference between the proceeds on disposal and net carrying value is recognised in the statement of
profit or loss under Other net income.
Right-of-use assets
ING Group as the lessee
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a corresponding liability representing its obligation to make lease payments at the date at which the
leased asset is available for use by ING Group. Each lease payment is allocated between the repayment of
the liability and finance cost. The finance costs are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
\u2022 Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
\u2022 Variable lease payments that are based on an index or a rate;
\u2022 Amounts expected to be payable by the lessee under residual value guarantees;
\u2022 The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
\u2022 Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date less any lease incentives received
and any initial direct costs and restoration costs.
The right-of-use asset is included in the statement of financial position line-item \u2018Property and equipment\u2019,
the lease liability is included in the statement of financial position line-item \u2018Other liabilities\u2019. Refer to Note 9
\u2018Property and equipment\u2019 and to Note 16 \u2018Other liabilities\u2019.
Subsequent to initial recognition, the right-of-use asset amortises using a straight-line method to the
income statement over the life of the lease. The lease liability increases for the accrual of interest and
decrease when payments are made. Any remeasurement of the lease liability due to a lease modification
or other reassessment results in a corresponding adjustment to the carrying amount of the right-of-use
asset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-684": { "value": "
1.11\u00a0 Property and equipment
Property in own use
Land and buildings held for own use are stated at fair value at the balance sheet date. Depreciation is
recognised on a straight-line basis over the estimated useful life (in general 20\u201350 years). On disposal, the
related revaluation reserve is transferred to retained earnings.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the
assets is depreciated on a straight line basis over their estimated useful lives, which are generally as follows:
for data processing equipment two to five years, and four to ten years for fixtures and fittings.
Disposals of property and equipment
The difference between the proceeds on disposal and net carrying value is recognised in the statement of
profit or loss under Other net income.
Right-of-use assets
ING Group as the lessee
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a corresponding liability representing its obligation to make lease payments at the date at which the
leased asset is available for use by ING Group. Each lease payment is allocated between the repayment of
the liability and finance cost. The finance costs are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
\u2022 Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
\u2022 Variable lease payments that are based on an index or a rate;
\u2022 Amounts expected to be payable by the lessee under residual value guarantees;
\u2022 The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
\u2022 Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date less any lease incentives received
and any initial direct costs and restoration costs.
The right-of-use asset is included in the statement of financial position line-item \u2018Property and equipment\u2019,
the lease liability is included in the statement of financial position line-item \u2018Other liabilities\u2019. Refer to Note 9
\u2018Property and equipment\u2019 and to Note 16 \u2018Other liabilities\u2019.
Subsequent to initial recognition, the right-of-use asset amortises using a straight-line method to the
income statement over the life of the lease. The lease liability increases for the accrual of interest and
decrease when payments are made. Any remeasurement of the lease liability due to a lease modification
or other reassessment results in a corresponding adjustment to the carrying amount of the right-of-use
asset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-686": { "value": "
Right-of-use assets
ING Group as the lessee
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a corresponding liability representing its obligation to make lease payments at the date at which the
leased asset is available for use by ING Group. Each lease payment is allocated between the repayment of
the liability and finance cost. The finance costs are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset\u2019s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
\u2022 Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
\u2022 Variable lease payments that are based on an index or a rate;
\u2022 Amounts expected to be payable by the lessee under residual value guarantees;
\u2022 The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
\u2022 Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee\u2019s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date less any lease incentives received
and any initial direct costs and restoration costs.
The right-of-use asset is included in the statement of financial position line-item \u2018Property and equipment\u2019,
the lease liability is included in the statement of financial position line-item \u2018Other liabilities\u2019. Refer to Note 9
\u2018Property and equipment\u2019 and to Note 16 \u2018Other liabilities\u2019.
Subsequent to initial recognition, the right-of-use asset amortises using a straight-line method to the
income statement over the life of the lease. The lease liability increases for the accrual of interest and
decrease when payments are made. Any remeasurement of the lease liability due to a lease modification
or other reassessment results in a corresponding adjustment to the carrying amount of the right-of-use
asset.
1.12\u00a0 ING Group as lessor
When ING Group acts as a lessor, a distinction should be made between finance leases and operating leases.
For ING Group as a lessor these are mainly finance leases and are therefore not included in 'Property and
equipment'. Instead, the present value of the lease payments is recognised as a receivable under Loans and
advances to customers or Loans and advances to banks. The difference between the gross receivable and
the present value of the receivable is unearned finance lease income. Lease income is recognised over the
term of the lease using the net investment method (before tax), which reflects a constant periodic rate of
return.
Lease income
The proceeds from leasing out assets under operating leases are recognised on a straight-line basis over the
life of the lease agreement. Lease payments received in respect of finance leases when ING Group is the
lessor are divided into an interest component (recognised as interest income) and a repayment component
based on a pattern reflecting a constant periodic rate of return on the lessor\u2019s net investment in the lease.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-687": { "value": "
1.13\u00a0 Goodwill and other intangible assets
Impairment of goodwill and other non-financial assets
ING Group assesses at each reporting period, whether there is an indication that a non-financial asset may
be impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.
Computer software
Computer software that has been purchased or generated internally for own use is stated at cost less
amortisation and any impairment losses. Amortisation is calculated on a straight-line basis over its useful
life which generally does not exceed five years. Amortisation is included in Other operating expenses.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-689": { "value": "
Impairment of goodwill and other non-financial assets
ING Group assesses at each reporting period, whether there is an indication that a non-financial asset may
be impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-688": { "value": "
Impairment of goodwill and other non-financial assets
ING Group assesses at each reporting period, whether there is an indication that a non-financial asset may
be impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-690": { "value": "
Computer software
Computer software that has been purchased or generated internally for own use is stated at cost less
amortisation and any impairment losses. Amortisation is calculated on a straight-line basis over its useful
life which generally does not exceed five years. Amortisation is included in Other operating expenses.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-692": { "value": "
1.14\u00a0 Taxation
Income tax on the result for the year consists of current and deferred tax. Income tax is recognised in the
statement of profit or loss but it is recognised directly in equity if the tax relates to items that are recognised
directly in equity.
Uncertain tax positions are assessed continually by ING Group and in case it is probable that there will be a
cash outflow, a current tax liability is recognised.
Deferred income tax
Deferred income tax is provided in full, using the liability method, for temporary differences arising between
the tax basis of assets and liabilities and their carrying amounts in the Consolidated statement of financial
position. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted at the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities
are not discounted.
Deferred tax assets are recognised when it is probable that future taxable profit will be available against
which the temporary differences can be utilised. Deferred income tax is provided for temporary differences
arising from investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by ING Group and it is probable that the difference will not reverse in the
foreseeable future. The tax effects of income tax losses available for carry forward are recognised as an
asset where it is probable that future taxable profits will be available against which these losses can be
utilised.
Fair value remeasurements of debt and equity instruments measured at FVOCI and cash flow hedges are
recognised directly in equity. Deferred tax related to this fair value remeasurement is also recognised
directly in equity and is subsequently recognised in the statement of profit or loss together with the
deferred gain or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-691": { "value": "
1.14\u00a0 Taxation
Income tax on the result for the year consists of current and deferred tax. Income tax is recognised in the
statement of profit or loss but it is recognised directly in equity if the tax relates to items that are recognised
directly in equity.
Uncertain tax positions are assessed continually by ING Group and in case it is probable that there will be a
cash outflow, a current tax liability is recognised.
Deferred income tax
Deferred income tax is provided in full, using the liability method, for temporary differences arising between
the tax basis of assets and liabilities and their carrying amounts in the Consolidated statement of financial
position. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted at the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities
are not discounted.
Deferred tax assets are recognised when it is probable that future taxable profit will be available against
which the temporary differences can be utilised. Deferred income tax is provided for temporary differences
arising from investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by ING Group and it is probable that the difference will not reverse in the
foreseeable future. The tax effects of income tax losses available for carry forward are recognised as an
asset where it is probable that future taxable profits will be available against which these losses can be
utilised.
Fair value remeasurements of debt and equity instruments measured at FVOCI and cash flow hedges are
recognised directly in equity. Deferred tax related to this fair value remeasurement is also recognised
directly in equity and is subsequently recognised in the statement of profit or loss together with the
deferred gain or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-694": { "value": "
1.15\u00a0 Provisions, contingent liabilities and contingent assets
A provision is a present obligation arising from past events, the settlement of which is expected to result in
an outflow of resources embodying economic benefits, however the timing or the amount is uncertain.
Provisions are discounted when the effect of the time value of money is significant using a pre-tax discount
rate.
Reorganisation provisions include employee termination benefits when ING Group is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.
A liability is recognised for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the liability is recognised
only upon reaching the specified minimum threshold.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of ING Group; or a present obligation that arises from past events but is not recognised
because it is either not probable that an outflow of economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility
of the outflow of economic benefits is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of ING Group. Contingent assets are recognised in the statement of financial position only when
realisation of the income that arises from such an asset is virtually certain. Contingent assets are disclosed
in the notes when an inflow of economic benefits is probable.
Significant judgements and critical accounting estimates and assumptions:
The recognition and measurement of provisions is an inherently uncertain process involving using
judgement to determine when a present obligation exists and estimates regarding probability, amounts
and timing of cash flows.
ING Group may become involved in governmental, regulatory, arbitration and legal proceedings and
investigations and may be subject to third party claims. With or without reference to the above, ING Group
may also offer compensation to certain of its customers. Judgement is required to assess whether a
present obligation exists and to estimate the probability of an unfavourable outcome and the amount of
potential loss. The degree of uncertainty and the method of making the accounting estimate depends on
the individual case, its nature and complexity. Such cases are usually one of a kind. For the assessment of
related provisions ING Group consults with internal and external legal experts. Even taking into
consideration legal experts\u2019 advice, the probability of an outflow of economic benefits can still be uncertain
and the provision recognised can remain sensitive to the assumptions used. Reference is made to Note 15
'Provisions'. For proceedings where it is not possible to make a reliable estimate of the expected financial
effect, that could result from the ultimate resolution of the proceedings, no provision is recognised,
however disclosure is included in the financial statements, where relevant. Reference is made to Note 42
'Legal proceedings'.
Critical accounting estimates and assumptions for the reorganisation provision are in estimating the
amounts and timing of cash flows as the announced transformation initiatives are implemented over a
period of several years. Reference is made to Note 15 'Provisions'.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-693": { "value": "
1.15\u00a0 Provisions, contingent liabilities and contingent assets
A provision is a present obligation arising from past events, the settlement of which is expected to result in
an outflow of resources embodying economic benefits, however the timing or the amount is uncertain.
Provisions are discounted when the effect of the time value of money is significant using a pre-tax discount
rate.
Reorganisation provisions include employee termination benefits when ING Group is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.
A liability is recognised for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the liability is recognised
only upon reaching the specified minimum threshold.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of ING Group; or a present obligation that arises from past events but is not recognised
because it is either not probable that an outflow of economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility
of the outflow of economic benefits is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of ING Group. Contingent assets are recognised in the statement of financial position only when
realisation of the income that arises from such an asset is virtually certain. Contingent assets are disclosed
in the notes when an inflow of economic benefits is probable.
1.16\u00a0 Irrevocable Payment Commitments on contributions to SRF and DGS
ING makes contributions to the Single Resolution Fund (SRF) and Deposit Guarantee Schemes (DGS). The
annual contributions are paid in cash or, in some cases, partly using Irrevocable Payment Commitments
(IPCs) that become payable if and when called. Cash contributions are accounted for as levies as described
in section 1.15 above while IPCs are disclosed as contingent liabilities in Note 41 'Contingent liabilities and
commitments'. Cash collateral posted on IPCs to the SRF is accounted for as an interest bearing financial
asset at amortised cost. Government bonds posted as collateral on IPCs to DGS continue to be recognised as
assets of ING as securities at amortised cost.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-695": { "value": "
Reorganisation provisions include employee termination benefits when ING Group is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-696": { "value": "
1.17\u00a0 Other liabilities
Defined benefit plans
The net defined benefit asset or liability recognised in the statement of financial position in respect of
defined benefit pension plans is the fair value of the plan assets less the present value of the defined benefit
obligation at the balance sheet date.
Changes in plan assets include mainly:
\u2022 Return on plan assets are recognised as staff costs in the statement of profit or loss. It is determined
using a high quality corporate bond rate (identical to the discount rate used in determining the defined
benefit obligation) at the start of the reporting period; and\u00a0
\u2022 Remeasurements which are recognised in Other comprehensive income.\u00a0
The defined benefit obligation is calculated by internal and external independent qualified actuaries through
actuarial models and calculations using the projected unit credit method. This method considers expected
future payments required to settle the obligation resulting from employee service in the current and prior
periods, discounted using a high quality corporate bond rate. Inherent in these actuarial models are
assumptions including discount rates, rates of increase in future salary and benefit levels, mortality rates,
consumer price index and the expected level of indexation. The assumptions are based on available market
data as well as management expectations and are updated regularly.\u00a0
Changes in the defined benefit obligation include mainly:
\u2022 Service cost which is recognised as staff costs in the statement of profit or loss;\u00a0
\u2022 Interest expenses are recognised as staff costs in the Statement of profit or loss. It is determined using a
high quality corporate bond rate at the start of the period;
\u2022 Remeasurements which are recognised in Other comprehensive income (equity) and not recycled to the
Statement of profit or loss;
\u2022 Any past service cost relating to a plan amendment is recognised in profit or loss in the period of the plan
amendment; and
\u2022 Gains and losses on curtailments and settlements are recognised in the Statement of profit or loss when
the curtailment or settlement occurs.
The recognition of a net defined benefit asset in the Consolidated statement of financial position is limited
to the present value of any economic benefits available in the form of refunds from the plans or reductions
in future contributions to the plans.
Defined contribution plans
For defined contribution plans, ING Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. ING Group has no further payment
obligations once the contributions have been paid. The contributions are recognised as staff expenses in the
profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Other post-employment obligations
Some group companies provide other post-employment benefits to former employees. The entitlement to
these benefits is usually conditional on the employee remaining in service up to retirement age and the
completion of a minimum service period. The expected costs of these benefits are accrued over the period
of employment using an accounting methodology similar to that for defined benefit pension plans.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-697": { "value": "
1.18\u00a0 Treasury shares
Treasury shares (own equity instruments bought back by ING Group or its subsidiaries) are deducted from
Equity (Other reserves). No gain or loss is recognised in the statement of profit or loss when purchasing,
selling or cancelling these shares. Treasury shares are not taken into account when calculating earnings per
ordinary share or dividend per ordinary share as they are not considered to be outstanding.
Treasury shares can be purchased by ING as part of a share buyback programme. If a share buyback is
executed by a broker and the agreement with the broker is irrevocable, ING has a contractual obligation to
purchase its own shares that is unavoidable once it signs the agreement with the broker. This is the moment
when ING recognises a financial liability measured at the present value of the redemption amount with a
corresponding reduction in equity (Retained earnings). During the share buyback programme, ING settles
this liability for the actual purchase price paid for the shares bought on a daily basis. Actual shares bought
back and held by ING are presented as Treasury shares within Other reserves in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-698": { "value": "
1.19\u00a0 Income recognition
Interest
Interest income and expense are recognised in the statement of profit or loss using the effective interest
method. The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset or financial liability. When calculating the effective interest rate, ING Group
estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment
options) but does not consider future credit losses.
The calculation includes all fees and points paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs and all other premiums or discounts. Once a
financial asset or a group of similar financial assets has been written down as a result of an impairment loss,
interest income is recognised using the rate of interest used to discount the future cash flows for the
purpose of measuring the impairment loss.
Interest results on instruments classified at Amortised Cost, assets measured at FVOCI and derivatives in a
formal hedge accounting relationship is presented in \u2018Interest income (expense) using effective interest rate
method\u2019. Interest result on financial assets and liabilities voluntarily designated as at FVPL and derivatives in
so called economic hedges and instruments designated at fair value are presented in \u2018Other interest income
(expense)\u2019. Interest result on all other financial assets and liabilities at FVTPL is recognised in \u2018Valuation
results and net trading income\u2019.
Fees and commissions
Fees and commissions are generally recognised as the service is provided. Loan commitment fees for loans
that are likely to be drawn down are deferred (together with related direct costs) and recognised as an
adjustment to the effective interest rate on the loan. Loan syndication fees are recognised as income when
the performance obligation has been satisfied based on the particular contract and ING Group has retained
no part of the loan package for itself or has retained a part at the same effective interest rate as the other
participants. Commission and fees arising from negotiating, or participating in the negotiation of, a
transaction for a third party \u2013 such as the arrangement of the acquisition of shares or other securities or the
purchase or sale of businesses \u2013 are recognised on completion of the underlying transaction. Portfolio and
other management advisory and service fees are recognised based on the applicable service contracts as
the service is provided. Asset management fees related to investment funds and investment contract fees
are recognised on a pro-rata basis over the period the service is provided. The same principle is applied for
wealth management, financial planning and custody services that are continuously provided over an
extended period of time. Fees received and paid between banks for payment services are classified as
commission income and expenses.
Lease income
The proceeds from leasing out assets under operating leases are recognised on a straight-line basis over the
life of the lease agreement. Lease payments received in respect of finance leases when ING Group is the
lessor are divided into an interest component (recognised as interest income) and a repayment component
based on a pattern reflecting a constant periodic rate of return on the lessor\u2019s net investment in the lease.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-699": { "value": "
Interest
Interest income and expense are recognised in the statement of profit or loss using the effective interest
method. The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset or financial liability. When calculating the effective interest rate, ING Group
estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment
options) but does not consider future credit losses.
The calculation includes all fees and points paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs and all other premiums or discounts. Once a
financial asset or a group of similar financial assets has been written down as a result of an impairment loss,
interest income is recognised using the rate of interest used to discount the future cash flows for the
purpose of measuring the impairment loss.
Interest results on instruments classified at Amortised Cost, assets measured at FVOCI and derivatives in a
formal hedge accounting relationship is presented in \u2018Interest income (expense) using effective interest rate
method\u2019. Interest result on financial assets and liabilities voluntarily designated as at FVPL and derivatives in
so called economic hedges and instruments designated at fair value are presented in \u2018Other interest income
(expense)\u2019. Interest result on all other financial assets and liabilities at FVTPL is recognised in \u2018Valuation
results and net trading income\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-700": { "value": "
Interest results on instruments classified at Amortised Cost, assets measured at FVOCI and derivatives in a
formal hedge accounting relationship is presented in \u2018Interest income (expense) using effective interest rate
method\u2019. Interest result on financial assets and liabilities voluntarily designated as at FVPL and derivatives in
so called economic hedges and instruments designated at fair value are presented in \u2018Other interest income
(expense)\u2019. Interest result on all other financial assets and liabilities at FVTPL is recognised in \u2018Valuation
results and net trading income\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradingIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-701": { "value": "
Fees and commissions
Fees and commissions are generally recognised as the service is provided. Loan commitment fees for loans
that are likely to be drawn down are deferred (together with related direct costs) and recognised as an
adjustment to the effective interest rate on the loan. Loan syndication fees are recognised as income when
the performance obligation has been satisfied based on the particular contract and ING Group has retained
no part of the loan package for itself or has retained a part at the same effective interest rate as the other
participants. Commission and fees arising from negotiating, or participating in the negotiation of, a
transaction for a third party \u2013 such as the arrangement of the acquisition of shares or other securities or the
purchase or sale of businesses \u2013 are recognised on completion of the underlying transaction. Portfolio and
other management advisory and service fees are recognised based on the applicable service contracts as
the service is provided. Asset management fees related to investment funds and investment contract fees
are recognised on a pro-rata basis over the period the service is provided. The same principle is applied for
wealth management, financial planning and custody services that are continuously provided over an
extended period of time. Fees received and paid between banks for payment services are classified as
commission income and expenses.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-702": { "value": "
1.20\u00a0 Expense recognition
Expenses are recognised in the statement of profit or loss as incurred or when a decrease in future
economic benefits related to a decrease in an asset or an increase in a liability has arisen that can be
measured reliably. Fee and commission expenses are generally a result from a contract with ING service
providers in order to perform the service for ING Group\u2019s customers. Costs are generally presented as
\u2018Commission expenses\u2019 if they are specific, incremental, directly attributable and identifiable to generate
commission income.\u00a0
Share-based payments
ING Group only engages in share-based payment transactions with its staff and directors. Share-based
payment expenses are recognised as a staff expense over the vesting period. A corresponding increase in
equity is recognised for equity-settled share-based payment transactions. A liability is recognised for cash-
settled share-based payment transactions. The fair value of equity-settled share-based payment
transactions are measured at the grant date, and the fair value of cash-settled share-based payment
transactions are measured at each balance sheet date. Rights granted will remain valid until the expiry
date, even if the share based payment scheme is discontinued. The rights are subject to certain conditions,
including a pre-determined continuous period of service.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-703": { "value": "
Share-based payments
ING Group only engages in share-based payment transactions with its staff and directors. Share-based
payment expenses are recognised as a staff expense over the vesting period. A corresponding increase in
equity is recognised for equity-settled share-based payment transactions. A liability is recognised for cash-
settled share-based payment transactions. The fair value of equity-settled share-based payment
transactions are measured at the grant date, and the fair value of cash-settled share-based payment
transactions are measured at each balance sheet date. Rights granted will remain valid until the expiry
date, even if the share based payment scheme is discontinued. The rights are subject to certain conditions,
including a pre-determined continuous period of service.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-704": { "value": "
1.21\u00a0 Earnings per ordinary share
Earnings per ordinary share is calculated on the basis of the weighted average number of ordinary shares
outstanding. In calculating the weighted average number of ordinary shares outstanding:
\u2022 Own shares held by group companies are deducted from the total number of ordinary shares in issue;\u00a0
\u2022 The computation is based on daily averages; and
\u2022 In case of exercised warrants, the exercise date is taken into consideration.\u00a0
Diluted earnings per share data are computed as if all convertible instruments outstanding at year-end
were exercised at the beginning of the period. It is also assumed that ING Group uses the assumed proceeds
thus received to buy its own shares against the average market price in the financial year. The net increase
in the number of shares resulting from the exercise is added to the average number of shares used to
calculate diluted earnings per share.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-705": { "value": "
1.22\u00a0 Statement of cash flows
The statement of cash flows is prepared in accordance with the indirect method, distinguishing cash flows
from operating, investing and financing activities. In the net cash flow from operating activities, the result
before tax is adjusted for those items in the statement of profit or loss and changes in items per the
statement of financial position, which do not result in actual cash flows during the year.
For the purposes of the statement of cash flows, Cash and cash equivalents include deposits from banks and
loans and advances to banks that are on demand. Furthermore, it includes treasury bills and other eligible
bills shorter than three months. Investments qualify as a cash equivalent if they are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value.
Cash flows arising from foreign currency transactions are translated into the functional currency using the
exchange rates at the date of the cash flows.
The net cash flow shown in respect of Loans and advances to customers relates only to transactions
involving actual payments or receipts. The Addition to loan loss provision which is deducted from the item
Loans and advances to customers in the statement of financial position has been adjusted accordingly from
the result before tax and is shown separately in the statement of cash flows.
The difference between the Net cash flow in accordance with the statement of cash flows and the change
between the opening and closing balance of Cash and cash equivalents in the statement of financial
position is due to exchange rate differences and is presented separately in the cash flow statement.
Liabilities arising from financing activities are debt securities, lease liabilities and subordinated loans.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-707": { "value": "
2\u00a0 Cash and balances with central banks
Cash and balances with central banks
in EUR million
2023
2022
Amounts held at central banks 1
88,627
85,934
Cash and bank balances
1,587
1,681
90,214
87,614
1 Amounts held at central banks include an amount of EUR -5\u00a0million (2022: EUR -12\u00a0million) of Loan loss provisions.
Amounts held at central banks reflect on demand balances. The movement reflects ING\u2019s active liquidity
management.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
restrictions on amounts held at central banks.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-706": { "value": "
2\u00a0 Cash and balances with central banks
Cash and balances with central banks
in EUR million
2023
2022
Amounts held at central banks 1
88,627
85,934
Cash and bank balances
1,587
1,681
90,214
87,614
1 Amounts held at central banks include an amount of EUR -5\u00a0million (2022: EUR -12\u00a0million) of Loan loss provisions.
Amounts held at central banks reflect on demand balances. The movement reflects ING\u2019s active liquidity
management.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
restrictions on amounts held at central banks.
3\u00a0 Loans and advances to banks
Loans and advances to banks
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to banks
9,453
23,463
7,286
11,679
16,739
35,141
Loan loss provisions
-11
-12
-18
-26
-30
-37
9,441
23,451
7,268
11,653
16,709
35,104
Loans and advances mainly include balances of reverse repurchase transactions, term loans and cash
collateral transactions. For more information on the balance of reverse repurchase transactions refer to
Note 4 'Financial assets at fair value through profit or loss'. Reference is made to Note 7 'Loans and
advances to customers' for information on finance lease receivables included in Loans and advances to
banks.
As at 31\u00a0December 2023 and at 31 December 2022, all loans and advances to banks are non-subordinated.
4\u00a0 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
in EUR million
2023
2022
Trading assets
60,229
56,870
Non-trading derivatives
2,028
3,893
Designated at fair value through profit or loss
5,775
6,159
Mandatorily measured at fair value through profit or loss
54,983
46,844
123,015
113,766
(Reverse) repurchase transactions
Financial assets at fair value through profit or loss includes securities lending and sales and repurchase
transactions with securities. At ING, these types of transactions are recognised in several lines in the
statement of financial position depending on business model assessment and counterparty. Furthermore,
for repurchase agreements the gross amount of assets must be considered together with the gross amount
of related liabilities, which are presented separately on the statement of financial position since IFRS does
not always allow netting of these positions in the statement of financial position.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the consolidated statement of financial position as the counterparty
continues to be exposed to substantially all risks and rewards of the transferred security. Based on the
business model assessment and counterparty, the consideration paid to purchase securities is recognised as
Loans and advances to customers, Loans and advances to banks, financial assets mandatorily at FVPL or
Trading assets.
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the consolidated statement of financial position as ING Group continues to be
exposed to substantially all risks and rewards of the transferred financial asset. The counterparty liability is
designated and measured at FVPL if the asset is measured at FVPL. Otherwise, the counterparty liability is
included in Deposits from banks, Customer deposits or Trading.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
information on transferred assets which were not derecognised.
ING Group\u2019s exposure to (reverse) repurchase transactions is included in the following lines in the statement
of financial position:
Exposure to (reverse) repurchase agreements
in EUR million
2023
2022
Reverse repurchase transactions
Loans and advances to banks
5,251
19,395
Loans and advances to customers
499
1,306
Trading assets, loans and receivables
12,121
9,732
Loans and receivables mandatorily measured at fair value through profit or loss
51,536
43,153
69,407
73,587
Repurchase transactions
Deposits from banks
2,064
3,809
Customer deposits
97
1
Trading liabilities, funds on deposit
10,337
5,715
Funds entrusted designated and measured at fair value through profit or loss
45,729
43,131
58,227
52,655
Trading assets
Trading assets by type
in EUR million
2023
2022
Equity securities
15,412
11,737
Debt securities
6,907
4,189
Derivatives
25,680
30,841
Loans and receivables
12,231
10,103
60,229
56,870
Trading assets include assets that are closely related to servicing the needs of the clients of ING Group. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in
-\u00a0 fair value hedges
716
836
-\u00a0 cash flow hedges
440
814
-\u00a0 hedges of net investments in foreign operations
100
119
Other non-trading derivatives
771
2,124
2,028
3,893
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives designated
in hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign exchange currency swaps for
which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
4,470
5,437
Loans and receivables
1,306
722
5,775
6,159
\u2018Financial assets designated at fair value through profit or loss\u2019 is partly economically hedged by credit
derivatives. The hedges do not meet the criteria for hedge accounting and the loans and debt securities are
recorded at fair value to avoid an accounting mismatch. The maximum credit exposure of the loans and
receivables and debt securities included in \u2018Financial assets designated at fair value through profit or loss\u2019
approximates its carrying value and amounts to EUR 5,775 million (2022: EUR 6,159 million). In 2023, the
change in fair value of these loans and debt securities amounts EUR -48 million (2022: EUR 357 million).\u00a0 \u00a0
ING has mitigated the credit risk exposure on some of the portfolio. The cost at initial recognition of the
financial assets designated at fair value through profit or loss that are economically hedged by credit
derivatives is EUR 3,181 million (31 December 2022: EUR 3,051 million and the cumulative change in fair
value attributable to changes in credit risk is EUR 150 million (31 December 2022: EUR 150 million).
The notional value of the related credit derivatives is EUR 3,679\u00a0million (2022: EUR 3,370 million).The
cumulative change in fair value of the credit derivatives since the financial assets were first designated,
amounts to EUR -119\u00a0million ( 2022: EUR 3\u00a0million) and the change for the current year is EUR -122\u00a0million
(2022: EUR 72\u00a0million).
The changes in fair value attributable to changes in credit risk have been calculated by determining the
changes in credit spread implicit in the fair value of loans and bonds issued by entities with similar credit
characteristics.
Mandatorily at fair value through profit or loss
Mandatorily at fair value through profit or loss by type
in EUR million
2023
2022
Equity securities
179
203
Debt securities
894
821
Loans and receivables
53,911
45,820
54,983
46,844
Equity securities are individually insignificant for ING Group. For debt securities total exposure reference is
made to Note 6 'Debt securities' . Loans and receivables include mainly reverse repurchase agreements.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss (31 December 2023: EUR 538\u00a0million). For further information
on the change in accounting policies, reference is made to Note 1 'Basis of preparation and material
accounting policy information'.\u00a0
5\u00a0 Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income by type
in EUR million
2023
2022
Equity securities
1,885
1,887
Debt securities 1
38,281
29,095
Loans and advances 1
951
643
41,116
31,625
1 Debt securities include an amount of EUR -13 million (2022: EUR -21 million) and the Loans and advances includes EUR -8 million\u00a0
(2022: EUR -1 million) of Loan loss provisions.
Exposure to equity securities
Equity securities designated as at fair value through other comprehensive income
Carrying
value
Carrying
value
Dividend
income
Dividend
income
in EUR million
2023
2022
2023
2022
Investment in Bank of Beijing
1,590
1,614
98
111
Other Investments
295
273
7
38
1,885
1,887
105
149
As at 31\u00a0December 2023 ING holds approximately 13% (2022: 13%) of the shares of Bank of Beijing, a bank
listed on the stock exchange of Shanghai. Bank of Beijing stake is part of the Corporate Line segment. As per
regulatory requirements set by China Banking and Insurance Regulatory Commission, ING, as a shareholder
holding more than 5% or more of the shares, is required to supply additional capital when necessary. No
request for additional capital was received in 2023 (2022 : nil).
Changes in fair value through other comprehensive income
The following table presents changes in financial assets at fair value through other comprehensive income.
Changes in fair value through other comprehensive income financial assets
FVOCI equity
securities
FVOCI debt
instruments 1
Total
in EUR million
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
1,887
2,457
29,739
28,178
31,625
30,635
Additions
28
17
19,967
18,789
19,995
18,806
Amortisation
31
-18
31
-18
Transfers and reclassifications\u00a0
5
10
5
10
Changes in unrealised revaluations 2
68
-65
657
-3,230
725
-3,295
Impairments
-1
-1
Reversals of impairments
6
3
6
3
Disposals and redemptions
-2
-492
-11,912
-14,034
-11,913
-14,526
Exchange rate differences
-100
-39
751
49
651
10
Changes in the composition of the group and other
changes
-6
1
-6
1
Closing balance
1,885
1,887
39,231
29,739
41,116
31,625
1 Fair value through other comprehensive income debt instruments includes both debt securities and loans and advances.
2 Changes in unrealised revaluations of FVOCI debt instruments include changes on hedged items which are recognized in the
statement of profit or loss. Reference is made to Note 19 'Equity' for details on the changes in revaluation reserve.
FVOCI equity securities
Exchange rate differences of EUR -100\u00a0million (31 December 2022: EUR -39 million) are mainly related to the
stake in Bank of Beijing following the depreciation of CNY versus EUR. Furthermore in 2023, changes in
unrealised revaluations of equity securities are mainly related to the revaluation of the stake in Bank of
Beijing of EUR 77\u00a0million following changes in share price (31 December 2022: EUR -49\u00a0million).
In 2022, disposals of EUR 492 million mainly relate to the sale in the second quarter of HQLA eligible equity
instruments triggered by the changing interest rate environment and deteriorating market sentiment. This
portfolio was built up in early 2021 (additions in 2021: EUR 499 million) and was a relatively small part of the
HQLA portfolio. This was a diversified buy-and-hold portfolio aimed at generating stable dividend income
stream.
FVOCI debt instruments
In 2022, interest rates in both short and longer tenors increased significantly which resulted in changes in
unrealised revaluations of debt securities of EUR -3,230 million. During 2023 interest rates decreased
resulting in unrealised revaluations of EUR 657\u00a0million.
Reference is made to Note 6 'Debt securities' for details on ING Group\u2019s total exposure to debt securities.
6\u00a0 Debt securities
ING Group\u2019s exposure to debt securities is included in the following lines in the statement of financial
position:
Exposure to debt securities
in EUR million
2023
2022
Debt securities at fair value through other comprehensive income
38,281
29,095
Debt securities at amortised cost
48,313
48,160
Debt securities at fair value through other comprehensive income and amortised cost
86,594
77,255
Trading assets
6,907
4,189
Debt securities at fair value through profit or loss
5,363
6,258
Total debt securities at fair value through profit or loss
12,270
10,447
98,864
87,703
ING Group\u2019s total exposure to debt securities (excluding debt securities held in the trading portfolio) of EUR
91,957 million (31\u00a0December 2022: EUR 83,513 million) is specified as follows:
Debt securities by type of exposure
Debt Securities\u00a0 at
FVPL
Debt Securities at
FVOCI
Debt Securities at
AC
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Government bonds
362
63
20,988
16,016
24,050
24,629
45,400
40,708
Central bank bonds 1
446
307
2,043
2,331
2,489
2,638
Sub-sovereign, Supranationals
and Agencies
1,354
2,343
11,587
8,529
14,639
14,210
27,580
25,082
Covered bonds
4,084
2,663
5,231
5,543
9,315
8,206
Corporate bonds
799
857
127
108
109
26
1,035
991
Financial institutions' bonds
1,645
1,931
483
772
186
220
2,314
2,923
ABS portfolio
758
758
1,025
1,028
2,077
1,217
3,860
3,003
5,363
6,258
38,293
29,116
48,335
48,177
91,991
83,551
Loan loss provisions
-13
-21
-22
-17
-34
-39
Debt securities portfolio
5,363
6,258
38,281
29,095
48,313
48,160
91,957
83,513
1 In 2023 Central bank bonds have been included as a separate type of exposure. These bonds were previously included in Financial
Institutions bonds. The prior period has been updated for consistency and comparability.
7\u00a0 Loans and advances to customers
Loans and advances to customers by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to public authorities
1,070
837
13,314
11,840
14,384
12,677
Residential mortgages
110,475
107,952
214,120
205,511
324,596
313,463
Other personal lending
5,036
5,835
31,535
30,345
36,571
36,180
Corporate Lending
62,677
68,077
209,795
211,092
272,472
279,169
179,258
182,701
468,764
458,789
648,023
641,490
Loan loss provisions
-830
-993
-4,791
-4,990
-5,621
-5,984
178,429
181,708
463,973
453,798
642,402
635,506
For details on credit quality and loan loss provisioning, refer to \u2018Risk management \u2013 Credit risk\u2019 paragraphs
\u2018Credit quality\u2019 and 'Loan loss provisioning'.
As at 31\u00a0December 2023 EUR 642,209 million (2022: EUR 635,310 million) of loans and advances to
customers are non-subordinated.
Loans and advances to customers and to banks include finance lease receivables and are detailed as
follows:
Finance lease receivables 1
in EUR million
2023
2022
Maturities of gross investment in finance lease receivables
-\u00a0 within 1 year
3,827
3,452
-\u00a0 between 1-2 years
2,742
2,463
-\u00a0 between 2-3 years
2,133
1,870
-\u00a0 between 3-4 years
1,475
1,294
-\u00a0 between 4-5 years
875
747
-\u00a0 more than 5 years
1,451
1,423
12,503
11,251
Unearned future finance income on finance leases
-1,040
-792
Net investment in finance leases
11,463
10,459
Included in Loans and advances to banks
5
6
Included in Loans and advances to customers
11,459
10,453
11,463
10,459
1 The total loan loss provision of EUR 160 million (2022: EUR\u00a0160 million) for finance lease receivables is classified into the following loan
loss provision stages: Stage 1: EUR 6 million (2022: EUR 9 million), Stage 2: EUR 14 million (2022: EUR 28 million) and Stage 3: EUR 139
million (2022: EUR 123 million).
The finance lease receivables mainly relate to the financing of equipment and real estate and are mainly
part of corporate lending. To a lesser extent, the finance lease receivables relate to real estate for third
parties, where ING is the lessor. Interest income in 2023 on finance lease receivables amounts to EUR 429
million (2022: EUR 292 million).
12\u00a0 Deposits from banks
Deposits from banks by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Non-interest bearing
3
86
174
315
177
400
Interest bearing
7,803
32,858
15,277
23,374
23,080
56,232
7,806
32,943
15,451
23,689
23,257
56,632
Deposits from banks includes non-subordinated deposits and reverse repurchase transactions, for more
information on reverse repurchase transaction refer to Note 4 'Financial assets at fair value through profit or
loss'.
Deposits from banks includes ING\u2019s participation in the Targeted Longer-Term Refinancing Operations
(TLTRO) of EUR 6.0 billion (2022: EUR 36.0 billion). In 2023, EUR 30.0 billion of ING's TLTRO III participation was
repaid.
For the details of the applicable rates and impact on net interest income reference is made to Note 20 'Net
interest income'.
13\u00a0 Customer deposits
Customer deposits 1
in EUR million
2023
2022
Current accounts / Overnight deposits
221,773
260,350
Savings accounts
334,287
329,501
Time deposits
92,154
48,524
Other
2,053
2,395
650,267
640,770
1 ING changed the presentation of customer deposits as of 2023. The comparative figure for 2022 has been updated accordingly.
Current accounts / Overnight deposits, Saving accounts and Time deposits include balances with individuals,
respectively EUR 107,711\u00a0million (2022: EUR 124,067\u00a0million), EUR 305,734\u00a0million (2022: EUR
304,276\u00a0million) and EUR 46,762\u00a0million (2022: EUR 16,729\u00a0million).
Customer deposits by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Non-interest bearing
239
2,332
25,316
24,229
25,556
26,561
Interest bearing 1
232,539
231,885
392,172
382,324
624,711
614,209
232,779
234,217
417,488
406,552
650,267
640,770
1 Interest bearing includes current accounts which are not remunerated, however ING holds the contractual right to revise.
14\u00a0 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
in EUR million
2023
2022
Trading liabilities
37,220
39,088
Non-trading derivatives
2,019
3,048
Designated at fair value through profit or loss
55,400
50,883
94,638
93,019
Trading liabilities
Trading liabilities by type
in EUR million
2023
2022
Equity securities
1,156
935
Debt securities
2,492
1,291
Funds on deposit
10,443
5,993
Derivatives
23,129
30,869
37,220
39,088
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in:
-\u00a0 fair value hedges
113
244
-\u00a0 cash flow hedges
458
1,275
-\u00a0 hedges of net investments in foreign operations
92
83
Other non-trading derivatives
1,356
1,446
2,019
3,048
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives used for
hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign currency swaps for hedging
purposes, but for which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
8,672
6,537
Funds entrusted
46,633
44,263
Subordinated liabilities
95
82
55,400
50,883
As at 31\u00a0December 2023, the change in the fair value of financial liabilities designated at fair value through
profit or loss attributable to changes in credit risk is EUR -34 million (2022: EUR\u00a0-75 million) on a cumulative
basis. This change has been determined as the amount of change in fair value of the financial liability that is
not attributable to changes in market conditions that gave rise to market risk (i.e. mainly interest rate risk
based on yield curves).
The amount that ING Group is contractually required to pay at maturity to the holders of financial liabilities
designated at fair value through profit or loss excluding repurchase agreements (part of funds entrusted) is
EUR 9,957 million (2022: EUR\u00a08,408 million).
Funds entrusted include mainly repurchase agreements. For more information on repurchase transactions
refer to Note 4 'Financial assets at fair value through profit or loss'.
17\u00a0 Debt securities in issue
Debt securities in issue relates to debentures and other issued debt securities with either fixed interest rates
or interest rates based on floating interest rate levels, such as certificates of deposit and accepted bills
issued by ING Group, except for subordinated items. Debt securities in issue does not include debt securities
presented as Financial liabilities at fair value through profit or loss. ING Group does not have debt securities
that are issued on terms other than those available in the normal course of business.
Debt securities in issue \u2013 maturities
In EUR million
2023
2022
Fixed rate debt securities
Within 1 year
31,255
21,176
More than 1 year but less than 2 years
7,855
2,777
More than 2 years but less than 3 years
13,361
7,897
More than 3 years but less than 4 years
10,265
10,067
More than 4 years but less than 5 years
11,924
8,039
More than 5 years
26,987
28,582
Total fixed rate debt securities
101,645
78,539
Floating rate debt securities
Within 1 year
17,871
15,286
More than 1 year but less than 2 years
226
307
More than 2 years but less than 3 years
2,624
256
More than 3 years but less than 4 years
880
958
More than 4 years but less than 5 years
0
467
More than 5 years
1,423
105
Total floating rate debt securities
23,025
17,379
Total debt securities
124,670
95,918
Reference is made to Note 32 'Changes in liabilities arising from financing activities' for further information
on issuances, redemptions and non-cash movements.
18\u00a0 Subordinated loans
Subordinated loans
In EUR million
2023
2022
Subordinated loans
15,401
15,786
Subordinated loans are bonds issued by ING Groep N.V. and ING Bank N.V. to raise Tier 1 and Tier 2 (CRD IV
eligible) capital. Under IFRS these bonds are classified as liabilities and for regulatory purposes, they are
considered capital.\u00a0
In 2023 ING Groep N.V. issued in February EUR 500 million 5.00% Fixed Rate Subordinated Tier 2 Notes, GBP
750 million\u00a0 6.25% Fixed Rate Subordinated Tier 2 Notes and USD 1 billion 7.50% Perpetual AT1 Contingent
Convertible Capital Securities.
In 2023 ING Groep N.V. redeemed in March\u00a0 USD 1,250 million 4.70% Fixed Subordinated Tier 2 notes, in April\u00a0
EUR 1 billion 3.00% Fixed Subordinated Tier 2 notes on the first call dates.
In 2023 ING Bank N.V. redeemed in September USD 810 million 5.80% Fixed Rate Subordinated Tier 2 notes.
Reference is made to Note 32 'Changes in liabilities arising from financing activities' for further information
on issuances and redemptions.
The average interest rate on subordinated loans is 4.44% (2022: 4.01%). The interest expense during the
year 2023 was EUR 708 million (2022: EUR 648 million).
37\u00a0 Assets by contractual maturity
Amounts presented in these tables by contractual maturity are the amounts as presented in the statement
of financial position and are discounted cash flows. Reference is made to \u2018Risk Management \u2013 Funding and
liquidity risk\u2019.
Assets by contractual maturity
in EUR million
2023
Less than 1 month 1
1-3 months
3-12 months
1-5 years
Over 5 years
Maturity not applicable
Total
Cash and balances with central banks
90,214
90,214
Loans and advances to banks
11,985
1,021
1,744
1,527
431
16,709
Financial assets at fair value through profit or loss
\u2013\u00a0 Trading assets
17,000
7,363
11,448
13,216
11,201
60,229
\u2013\u00a0 Non-trading derivatives
138
80
297
613
900
2,028
\u2013\u00a0 Mandatorily at fair value through profit or loss
32,835
12,040
5,303
3,587
1,040
179
54,983
\u2013\u00a0 Designated as at fair value through profit or loss
550
200
792
2,092
2,141
5,775
Financial assets at fair value through other comprehensive income
\u2013\u00a0 Equity securities
1,885
1,885
\u2013\u00a0 Debt securities
579
232
2,021
13,686
21,763
38,281
\u2013\u00a0 Loans and advances
3
41
619
287
951
Securities at amortised cost
2,220
1,142
6,667
22,540
15,744
48,313
Loans and advances to customers
49,633
21,298
57,516
206,438
307,517
642,402
Other assets 2
5,658
257
1,088
1,146
1,020
4,645
13,813
Total assets
210,812
43,636
86,917
265,465
362,045
6,709
975,583
2022
Cash and balances with central banks
87,614
87,614
Loans and advances to banks
28,734
1,633
2,331
2,190
216
35,104
Financial assets at fair value through profit or loss
\u2013\u00a0 Trading assets
15,520
5,399
9,991
13,062
12,900
56,870
\u2013\u00a0 Non-trading derivatives
623
95
592
1,555
1,027
3,893
\u2013\u00a0 Mandatorily at fair value through profit or loss
29,153
10,504
3,753
2,329
901
203
46,844
\u2013\u00a0 Designated as at fair value through profit or loss
287
158
185
2,497
3,031
6,159
Financial assets at fair value through other comprehensive income
\u2013\u00a0 Equity securities
1,887
1,887
\u2013\u00a0 Debt securities
167
420
2,458
12,587
13,463
29,095
\u2013\u00a0 Loans and advances
3
1
7
226
407
643
Securities at amortised cost
1,810
1,719
4,566
24,689
15,376
48,160
Loans and advances to customers
54,431
23,554
54,056
197,275
306,190
635,506
Other assets 2
7,155
272
1,162
1,435
1,418
4,600
16,041
Total assets
225,499
43,754
79,101
257,845
354,928
6,690
967,817
1 Includes assets on demand.
2 Includes assets such as current and deferred tax assets as presented in the consolidated statement of the financial position. Additionally, assets are included in that position where maturities are not applicable such as property and equipment and investments in associates and
joint ventures. Due to their nature non-financial assets consist mainly of assets expected to be recovered after more than 12 months.
38\u00a0 Liabilities and off-balance sheet commitments by maturity
The tables below include all liabilities and off-balance sheet commitments by maturity based on
contractual, undiscounted cash flows. These balances are included in the maturity analysis as follows:
\u2022 Perpetual liabilities are included in the column \u2018Maturity not applicable\u2019.
\u2022 Derivative liabilities are included on a net basis if cash flows are settled net. For other derivative liabilities
the contractual gross cash flow payable is included.
\u2022 Undiscounted future coupon interest on financial liabilities payable is included in a separate line and in
the relevant maturity bucket.
\u2022 Non-financial liabilities are included based on a breakdown of the amounts per statement of financial
position, per expected maturity.
\u2022 Loans and other credit-related commitments are classified on the basis of the earliest date they can be
drawn down.
ING Group\u2019s expected cash flows on some financial liabilities vary significantly from contractual cash flows.
Principal differences are in demand deposits from customers that are expected to remain stable or increase
and in unrecognised loan commitments that are not all expected to be drawn down immediately. Reference
is made to the liquidity risk paragraph in \u2018Risk Management \u2013 Funding and liquidity risk\u2019 for a description on
how liquidity risk is managed.
Liabilities and off-balance sheet commitments by maturity
in EUR million
2023
Less than 1 month 1
1\u20133 months
3\u201312 months
1\u20135 years
Over 5 years
Maturity not applicable
Adjustment\u00a0 2
Total
Deposits from banks
9,294
7,800
2,074
1,898
2,002
189
23,257
Customer deposits
583,335
19,510
40,976
3,585
1,931
930
650,267
Financial liabilities at fair value through profit or loss
\u2013\u00a0 Other trading liabilities
10,981
697
545
1,003
897
-36
14,087
\u2013\u00a0 Trading derivatives
2,292
2,243
5,148
10,204
7,110
-3,865
23,132
\u2013\u00a0 Non-trading derivatives
505
96
139
1,002
355
-78
2,019
\u2013\u00a0 Designated at fair value through profit or loss
29,856
12,754
5,442
3,834
3,546
25
-57
55,400
Debt securities in issue
3,442
10,801
34,882
47,134
31,196
-2,786
124,670
Subordinated loans
9,104
6,988
-691
15,401
Lease liabilities
17
45
175
627
359
-61
1,162
Financial liabilities
639,722
53,946
89,381
69,286
56,500
7,014
-6,455
909,394
Other liabilities 3
9,739
619
2,829
399
420
14,005
Total liabilities
649,462
54,565
92,209
69,685
56,920
7,014
-6,455
923,400
Coupon interest due on financial liabilities
1,047
1,653
6,014
10,007
5,030
402
24,153
Contingent liabilities in respect of
\u2013\u00a0 Discounted bills
2
2
\u2013\u00a0 Guarantees
27,340
4
550
27,894
\u2013\u00a0 Irrevocable letters of credit
14,925
14,925
Guarantees issued by ING Groep N.V.
197
197
Irrevocable facilities
166,361
12
63
314
60
166,810
208,825
12
63
318
610
209,828
1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.
Liabilities and off-balance sheet commitments by maturity
in EUR million
2022
Less than 1 month 1
1\u20133 month
3\u201312 months
1\u20135 years
Over 5 years
Maturity not applicable
Adjustment 2
Total
Deposits from banks
10,053
2,238
33,268
9,878
1,794
-598
56,632
Customer deposits
605,154
16,127
15,045
2,729
1,872
-158
640,770
Financial liabilities at fair value through profit or loss
\u2013\u00a0 Other trading liabilities
5,778
875
304
771
575
-83
8,219
\u2013\u00a0 Trading derivatives
2,100
2,319
4,942
9,330
3,609
8,570
30,869
\u2013\u00a0 Non-trading derivatives
345
288
216
1,204
470
525
3,048
\u2013\u00a0 Designated at fair value through profit or loss
31,505
11,472
1,626
3,177
3,701
22
-620
50,883
Debt securities in issue
2,049
11,227
23,187
30,769
34,335
-5,648
95,918
Subordinated loans
760
9,936
6,307
-1,218
15,786
Lease liabilities
19
43
170
593
377
-28
1,174
Financial liabilities
657,001
44,588
79,518
58,451
56,669
6,329
742
903,298
Other liabilities 3
9,913
683
2,466
638
406
14,106
Total liabilities
666,914
45,271
81,984
59,090
57,075
6,329
742
917,405
Coupon interest due on financial liabilities
430
714
3,132
6,346
3,208
347
14,175
Contingent liabilities in respect of
\u2013\u00a0 Discounted bills
\u2013\u00a0 Guarantees
28,304
4
550
28,859
\u2013\u00a0 Irrevocable letters of credit
15,660
19
3
15,682
\u2013\u00a0 other
3
3
Guarantees issued by ING Groep N.V.
336
336
Irrevocable facilities
161,147
194
434
166
161,940
205,447
19
197
438
719
206,820
1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.
40\u00a0 Offsetting financial assets and liabilities
The following tables include information about rights to offset and the related arrangements. The amounts
included consist of all recognised financial instruments that are presented net in the statement of financial
position under the IFRS netting criteria (legal right to offset and intention to settle net or to realise the asset
and settle the liability simultaneously) and amounts presented gross in the statement of financial position
but subject to enforceable master netting arrangements or similar arrangements.
At ING Group amounts that are offset mainly relate to derivatives transactions, sale and repurchase
agreements, securities lending agreements and cash pooling arrangements. A significant portion of
offsetting is applied to OTC derivatives which are cleared through central clearing parties.
Related amounts not set off in the statement of financial position include transactions where:
\u2022 The counterparty has an offsetting exposure and a master netting or similar arrangement is in place with
a right to set off only in the event of default, insolvency or bankruptcy, or the offsetting criteria are
otherwise not satisfied, and
\u2022 In the case of derivatives and securities lending or sale and repurchase agreements, cash and non-cash
collateral has been received or pledged to cover net exposure in the event of a default or other
predetermined events. The effect of over-collateralisation is excluded.
The net amounts resulting after set off are not intended to represent ING\u2019s actual exposure to counterparty
risk, as risk management employs a number of credit risk mitigation strategies in addition to netting and
collateral arrangements. Reference is made in the Risk Management Credit risk\u2019 section \u2018Credit risk
mitigation'.
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
Related amounts not offset in the
statement of financial position
in EUR million
2023
Gross amounts of
recognised financial
assets
Gross amounts of
recognised financial
liabilities offset in
the statement of
financial position
Net amounts of
financial assets
presented in the
statement of
financial position
Financial
instruments
Cash and financial
instruments received
as collateral
Net amount
Amounts not subject
to enforceable
netting
arrangements
Statement of
financial position
total \u00b9
Statement of financial position line item
Financial instrument
Loans and advances to banks 2
Reverse repurchase, securities\u00a0
borrowing and similar agreements
1,840
-29
1,811
1,811
3,440
5,251
Other
1,840
-29
1,811
1,811
3,440
5,251
Financial assets at fair value through
profit or loss
Trading and Non-trading
Reverse repurchase, securities
borrowing and similar agreements
76,304
-34,738
41,566
235
41,063
268
22,091
63,657
Derivatives 3
105,928
-83,312
22,617
14,868
2,915
4,834
5,091
27,708
182,232
-118,049
64,183
15,103
43,977
5,102
27,182
91,365
Loans and advances to customers 4
Reverse repurchase, securities
borrowing and similar agreements
499
499
Cash pools
236,233
-234,617
1,616
41
1,217
358
1,616
236,233
-234,617
1,616
41
1,217
358
499
2,115
Other items where offsetting is applied
in the statement of financial position 5
7,124
-6,428
695
21
675
695
Total financial assets
427,428
-359,124
68,305
15,165
47,005
6,135
31,121
99,425
1 \u2018The statement of financial position total\u2019 is the sum of \u2018Net amounts of financial assets presented in the statement of financial position\u2019 and \u2019Amounts not subject to enforceable master netting arrangements\u2019.
2 At 31\u00a0December 2023 , the total amount of \u2018Loans and advances to banks\u2019 excluding repurchase agreements is EUR 11,458 million which is not subject to offsetting.
3 Derivative assets and derivative liabilities include certain exchange traded future and option positions with the same underlying.
4 At 31\u00a0December 2023, the total amount of \u2018Loans and advances to customers\u2019 excluding repurchase agreements is EUR 641,903 million of which the net cash pool position of EUR 1,616 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
5 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in \u2018Other Assets \u2013 Amounts to be settled\u2019 for EUR 3,869 million in the statement of financial position of which EUR 695 million
is subject to offsetting as at 31\u00a0December 2023.
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
Related amounts not offset in the
statement of financial position
in EUR million
2022
Gross amounts of
recognised financial
assets
Gross amounts of
recognised financial
liabilities offset in
the statement of
financial position
Net amounts of
financial assets
presented in the
statement of
financial position
Financial
instruments
Cash and financial
instruments received
as collateral
Net amount
Amounts not
subject to
enforceable netting
arrangements
Statement of
financial position
total \u00b9
Statement of financial position line item
Financial instrument
Loans and advances to banks 2
Reverse repurchase, securities
borrowing and similar agreements
2,576
2,576
2,549
27
16,820
19,395
Other
1
1
1
-1
2,576
2,576
1
2,549
27
16,819
19,395
Financial assets at fair value through
profit or loss
Trading and Non-trading
Reverse repurchase, securities
borrowing and similar agreements
51,870
-21,245
30,625
102
29,813
710
22,260
52,886
Derivatives
134,253
-106,523
27,730
18,190
4,525
5,015
7,004
34,734
186,123
-127,768
58,355
18,292
34,337
5,726
29,264
87,619
Loans and advances to customers 3
Reverse repurchase, securities
borrowing and similar agreements
155
155
155
1,151
1,306
Cash pools
224,261
-222,857
1,404
74
889
441
1,404
224,416
-222,857
1,559
74
1,044
441
1,151
2,710
Other items where offsetting is applied
in the statement of financial position 4
6,750
-5,899
851
74
777
851
Total financial assets
419,865
-356,524
63,341
18,440
37,930
6,971
47,234
110,576
1 \u2018The statement of financial position total\u2019 is the sum of \u2018Net amounts of financial assets presented in the statement of financial position\u2019 and \u2019Amounts not subject to enforceable master netting arrangements\u2019.
2 At 31\u00a0December 2022, the total amount of \u2018Loans and advances to banks\u2019 excluding repurchase agreements is EUR 15,709 million which is not subject to offsetting.
3 At 31\u00a0December 2022, the total amount of \u2018Loans and advances to customers\u2019 excluding repurchase agreements is EUR 634,200 million of which the net cash pool position of EUR 1,404 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
4 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in \u2018Other Assets \u2013 Amounts to be settled\u2019 for EUR 5,191 million in the statement of financial position of which EUR 851 million
is subject to offsetting as at 31\u00a0December 2022.
Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million
2023
Related amounts not offset in the
statement of financial position
Amounts not
subject to
enforceable netting
arrangements
Statement of financial
position total \u00b9
Gross amounts of
recognised financial
liabilities
Gross amounts of
recognised financial
assets offset in the
statement of financial
position
Net amounts of
financial liabilities
presented in the
statement of
financial position
Financial
instruments
Cash and financial
instruments
pledged as
collateral
Net amount
Statement of financial position line item
Financial instrument
Deposits from banks 2
Repurchase, securities lending
and similar agreements
29
-29
2,064
2,064
Other
290
-290
319
-319
2,064
2,064
Customer deposits 4
Repurchase, securities lending
and similar agreements
Cash pools
249,734
-234,617
15,116
13
15,103
15,116
249,734
-234,617
15,116
13
15,103
15,116
Financial liabilities at fair value through
profit or loss
Trading and Non-trading
Repurchase, securities lending
and similar agreements
76,581
-34,738
41,844
235
41,653
-44
14,222
56,065
Derivatives 3
101,218
-82,677
18,541
14,881
3,455
204
6,607
25,148
177,799
-117,415
60,384
15,117
45,108
160
20,829
81,213
Other items where offsetting is applied
in the statement of financial position 5
7,285
-6,773
512
35
477
512
Total financial liabilities
435,137
-359,124
76,013
15,165
45,108
15,740
22,892
98,905
1 \u2018The statement of financial position total\u2019 is the sum of \u2018Net amounts of financial liabilities presented in the statement of financial position\u2019 and \u2019Amounts not subject to enforceable master netting arrangements\u2019.
2 At 31\u00a0December 2023, the total amount of \u2018Deposits from banks\u2019 excluding repurchase agreements is EUR 21,193 million of which EUR 0 million is subject to offsetting.
3 Derivative assets and derivative liabilities include certain exchange traded future and option positions with the same underlying.
4 At 31\u00a0December 2023, the total amount of \u2018Customers deposits\u2019 excluding repurchase agreements is EUR 650,170 million of which the net cash pool position of EUR 15,116 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
5 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in \u2018Other Liabilities \u2013 Amounts to be settled\u2019 for EUR 6,509 million in the statement of financial position of which EUR 512
million is subject to offsetting as at 31\u00a0December 2023.
Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million
2022
Related amounts not offset in the
statement of financial position
Amounts not
subject to
enforceable netting
arrangements
Statement of financial
position total \u00b9
Gross amounts of
recognised
financial liabilities
Gross amounts of
recognised financial
assets offset in the
statement of financial
position
Net amounts of
financial liabilities
presented in the
statement of
financial position
Financial
instruments
Cash and financial
instruments
pledged as
collateral
Net amount
Statement of financial position line item
Financial instrument
Deposits from banks 2
Repurchase, securities lending
and similar agreements
3,809
3,809
Other
3,809
3,809
Customer deposits 3
Repurchase, securities lending
and similar agreements
Cash pools
236,219
-222,857
13,362
52
13,310
13,362
236,219
-222,857
13,362
52
13,310
13,362
Financial liabilities at fair value through
profit or loss
Trading and Non-trading
Repurchase, securities lending
and similar agreements
57,871
-21,245
36,626
102
31,868
4,655
12,220
48,846
Derivatives
127,937
-103,988
23,949
18,215
4,964
770
9,967
33,917
185,808
-125,233
60,575
18,317
36,833
5,425
22,187
82,762
Other items where offsetting is applied
in the statement of financial position 4
8,535
-8,435
100
70
30
100
Total financial liabilities
430,561
-356,524
74,037
18,440
36,833
18,765
25,996
100,033
1 \u2018The statement of financial position total\u2019 is the sum of \u2018Net amounts of financial liabilities presented in the statement of financial position\u2019 and \u2019Amounts not subject to enforceable master netting arrangements\u2019.
2 At 31\u00a0December 2022, the total amount of \u2018Deposits from banks\u2019 excluding repurchase agreements is EUR 52,823 million of which EUR 0 million is subject to offsetting.
3 At 31\u00a0December 2022, the total amount of \u2018Customers deposits\u2019 excluding repurchase agreements is EUR 640,770 million of which the net cash pool position of EUR 13,362 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
4 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in \u2018Other Liabilities \u2013 Amounts to be settled\u2019 for EUR 6,715 million in the statement of financial position of which EUR 100
million is subject to offsetting as at 31\u00a0December 2022.
41\u00a0 Contingent liabilities and commitments
In the normal course of business, ING Group is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.
Contingent liabilities and commitments
in EUR million
2023
2022
Contingent liabilities in respect of
\u2013\u00a0 Guarantees
27,894
28,859
\u2013\u00a0 Irrevocable letters of credit
14,925
15,682
\u2013\u00a0 Other
3
42,821
44,544
Guarantees issued by ING Groep N.V.
197
336
Irrevocable facilities
166,810
161,940
209,828
206,820
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Group in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer\u2019s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Group\u2019s credit risk in these transactions is
limited since these transactions are collateralised by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Group\u2019s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers\u2019 assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
In addition to the items included in contingent liabilities, ING Group has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (\u2018Einlagensicherungsfonds\u2019 or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 42 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-708": { "value": "
3\u00a0 Loans and advances to banks
Loans and advances to banks
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to banks
9,453
23,463
7,286
11,679
16,739
35,141
Loan loss provisions
-11
-12
-18
-26
-30
-37
9,441
23,451
7,268
11,653
16,709
35,104
Loans and advances mainly include balances of reverse repurchase transactions, term loans and cash
collateral transactions. For more information on the balance of reverse repurchase transactions refer to
Note 4 'Financial assets at fair value through profit or loss'. Reference is made to Note 7 'Loans and
advances to customers' for information on finance lease receivables included in Loans and advances to
banks.
As at 31\u00a0December 2023 and at 31 December 2022, all loans and advances to banks are non-subordinated.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-710": { "value": "
4\u00a0 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
in EUR million
2023
2022
Trading assets
60,229
56,870
Non-trading derivatives
2,028
3,893
Designated at fair value through profit or loss
5,775
6,159
Mandatorily measured at fair value through profit or loss
54,983
46,844
123,015
113,766
(Reverse) repurchase transactions
Financial assets at fair value through profit or loss includes securities lending and sales and repurchase
transactions with securities. At ING, these types of transactions are recognised in several lines in the
statement of financial position depending on business model assessment and counterparty. Furthermore,
for repurchase agreements the gross amount of assets must be considered together with the gross amount
of related liabilities, which are presented separately on the statement of financial position since IFRS does
not always allow netting of these positions in the statement of financial position.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the consolidated statement of financial position as the counterparty
continues to be exposed to substantially all risks and rewards of the transferred security. Based on the
business model assessment and counterparty, the consideration paid to purchase securities is recognised as
Loans and advances to customers, Loans and advances to banks, financial assets mandatorily at FVPL or
Trading assets.
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the consolidated statement of financial position as ING Group continues to be
exposed to substantially all risks and rewards of the transferred financial asset. The counterparty liability is
designated and measured at FVPL if the asset is measured at FVPL. Otherwise, the counterparty liability is
included in Deposits from banks, Customer deposits or Trading.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
information on transferred assets which were not derecognised.
ING Group\u2019s exposure to (reverse) repurchase transactions is included in the following lines in the statement
of financial position:
Exposure to (reverse) repurchase agreements
in EUR million
2023
2022
Reverse repurchase transactions
Loans and advances to banks
5,251
19,395
Loans and advances to customers
499
1,306
Trading assets, loans and receivables
12,121
9,732
Loans and receivables mandatorily measured at fair value through profit or loss
51,536
43,153
69,407
73,587
Repurchase transactions
Deposits from banks
2,064
3,809
Customer deposits
97
1
Trading liabilities, funds on deposit
10,337
5,715
Funds entrusted designated and measured at fair value through profit or loss
45,729
43,131
58,227
52,655
Trading assets
Trading assets by type
in EUR million
2023
2022
Equity securities
15,412
11,737
Debt securities
6,907
4,189
Derivatives
25,680
30,841
Loans and receivables
12,231
10,103
60,229
56,870
Trading assets include assets that are closely related to servicing the needs of the clients of ING Group. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in
-\u00a0 fair value hedges
716
836
-\u00a0 cash flow hedges
440
814
-\u00a0 hedges of net investments in foreign operations
100
119
Other non-trading derivatives
771
2,124
2,028
3,893
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives designated
in hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign exchange currency swaps for
which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
4,470
5,437
Loans and receivables
1,306
722
5,775
6,159
\u2018Financial assets designated at fair value through profit or loss\u2019 is partly economically hedged by credit
derivatives. The hedges do not meet the criteria for hedge accounting and the loans and debt securities are
recorded at fair value to avoid an accounting mismatch. The maximum credit exposure of the loans and
receivables and debt securities included in \u2018Financial assets designated at fair value through profit or loss\u2019
approximates its carrying value and amounts to EUR 5,775 million (2022: EUR 6,159 million). In 2023, the
change in fair value of these loans and debt securities amounts EUR -48 million (2022: EUR 357 million).\u00a0 \u00a0
ING has mitigated the credit risk exposure on some of the portfolio. The cost at initial recognition of the
financial assets designated at fair value through profit or loss that are economically hedged by credit
derivatives is EUR 3,181 million (31 December 2022: EUR 3,051 million and the cumulative change in fair
value attributable to changes in credit risk is EUR 150 million (31 December 2022: EUR 150 million).
The notional value of the related credit derivatives is EUR 3,679\u00a0million (2022: EUR 3,370 million).The
cumulative change in fair value of the credit derivatives since the financial assets were first designated,
amounts to EUR -119\u00a0million ( 2022: EUR 3\u00a0million) and the change for the current year is EUR -122\u00a0million
(2022: EUR 72\u00a0million).
The changes in fair value attributable to changes in credit risk have been calculated by determining the
changes in credit spread implicit in the fair value of loans and bonds issued by entities with similar credit
characteristics.
Mandatorily at fair value through profit or loss
Mandatorily at fair value through profit or loss by type
in EUR million
2023
2022
Equity securities
179
203
Debt securities
894
821
Loans and receivables
53,911
45,820
54,983
46,844
Equity securities are individually insignificant for ING Group. For debt securities total exposure reference is
made to Note 6 'Debt securities' . Loans and receivables include mainly reverse repurchase agreements.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss (31 December 2023: EUR 538\u00a0million). For further information
on the change in accounting policies, reference is made to Note 1 'Basis of preparation and material
accounting policy information'.\u00a0
14\u00a0 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
in EUR million
2023
2022
Trading liabilities
37,220
39,088
Non-trading derivatives
2,019
3,048
Designated at fair value through profit or loss
55,400
50,883
94,638
93,019
Trading liabilities
Trading liabilities by type
in EUR million
2023
2022
Equity securities
1,156
935
Debt securities
2,492
1,291
Funds on deposit
10,443
5,993
Derivatives
23,129
30,869
37,220
39,088
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in:
-\u00a0 fair value hedges
113
244
-\u00a0 cash flow hedges
458
1,275
-\u00a0 hedges of net investments in foreign operations
92
83
Other non-trading derivatives
1,356
1,446
2,019
3,048
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives used for
hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign currency swaps for hedging
purposes, but for which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
8,672
6,537
Funds entrusted
46,633
44,263
Subordinated liabilities
95
82
55,400
50,883
As at 31\u00a0December 2023, the change in the fair value of financial liabilities designated at fair value through
profit or loss attributable to changes in credit risk is EUR -34 million (2022: EUR\u00a0-75 million) on a cumulative
basis. This change has been determined as the amount of change in fair value of the financial liability that is
not attributable to changes in market conditions that gave rise to market risk (i.e. mainly interest rate risk
based on yield curves).
The amount that ING Group is contractually required to pay at maturity to the holders of financial liabilities
designated at fair value through profit or loss excluding repurchase agreements (part of funds entrusted) is
EUR 9,957 million (2022: EUR\u00a08,408 million).
Funds entrusted include mainly repurchase agreements. For more information on repurchase transactions
refer to Note 4 'Financial assets at fair value through profit or loss'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-709": { "value": "
4\u00a0 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
in EUR million
2023
2022
Trading assets
60,229
56,870
Non-trading derivatives
2,028
3,893
Designated at fair value through profit or loss
5,775
6,159
Mandatorily measured at fair value through profit or loss
54,983
46,844
123,015
113,766
(Reverse) repurchase transactions
Financial assets at fair value through profit or loss includes securities lending and sales and repurchase
transactions with securities. At ING, these types of transactions are recognised in several lines in the
statement of financial position depending on business model assessment and counterparty. Furthermore,
for repurchase agreements the gross amount of assets must be considered together with the gross amount
of related liabilities, which are presented separately on the statement of financial position since IFRS does
not always allow netting of these positions in the statement of financial position.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the consolidated statement of financial position as the counterparty
continues to be exposed to substantially all risks and rewards of the transferred security. Based on the
business model assessment and counterparty, the consideration paid to purchase securities is recognised as
Loans and advances to customers, Loans and advances to banks, financial assets mandatorily at FVPL or
Trading assets.
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the consolidated statement of financial position as ING Group continues to be
exposed to substantially all risks and rewards of the transferred financial asset. The counterparty liability is
designated and measured at FVPL if the asset is measured at FVPL. Otherwise, the counterparty liability is
included in Deposits from banks, Customer deposits or Trading.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
information on transferred assets which were not derecognised.
ING Group\u2019s exposure to (reverse) repurchase transactions is included in the following lines in the statement
of financial position:
Exposure to (reverse) repurchase agreements
in EUR million
2023
2022
Reverse repurchase transactions
Loans and advances to banks
5,251
19,395
Loans and advances to customers
499
1,306
Trading assets, loans and receivables
12,121
9,732
Loans and receivables mandatorily measured at fair value through profit or loss
51,536
43,153
69,407
73,587
Repurchase transactions
Deposits from banks
2,064
3,809
Customer deposits
97
1
Trading liabilities, funds on deposit
10,337
5,715
Funds entrusted designated and measured at fair value through profit or loss
45,729
43,131
58,227
52,655
Trading assets
Trading assets by type
in EUR million
2023
2022
Equity securities
15,412
11,737
Debt securities
6,907
4,189
Derivatives
25,680
30,841
Loans and receivables
12,231
10,103
60,229
56,870
Trading assets include assets that are closely related to servicing the needs of the clients of ING Group. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in
-\u00a0 fair value hedges
716
836
-\u00a0 cash flow hedges
440
814
-\u00a0 hedges of net investments in foreign operations
100
119
Other non-trading derivatives
771
2,124
2,028
3,893
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives designated
in hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign exchange currency swaps for
which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
4,470
5,437
Loans and receivables
1,306
722
5,775
6,159
\u2018Financial assets designated at fair value through profit or loss\u2019 is partly economically hedged by credit
derivatives. The hedges do not meet the criteria for hedge accounting and the loans and debt securities are
recorded at fair value to avoid an accounting mismatch. The maximum credit exposure of the loans and
receivables and debt securities included in \u2018Financial assets designated at fair value through profit or loss\u2019
approximates its carrying value and amounts to EUR 5,775 million (2022: EUR 6,159 million). In 2023, the
change in fair value of these loans and debt securities amounts EUR -48 million (2022: EUR 357 million).\u00a0 \u00a0
ING has mitigated the credit risk exposure on some of the portfolio. The cost at initial recognition of the
financial assets designated at fair value through profit or loss that are economically hedged by credit
derivatives is EUR 3,181 million (31 December 2022: EUR 3,051 million and the cumulative change in fair
value attributable to changes in credit risk is EUR 150 million (31 December 2022: EUR 150 million).
The notional value of the related credit derivatives is EUR 3,679\u00a0million (2022: EUR 3,370 million).The
cumulative change in fair value of the credit derivatives since the financial assets were first designated,
amounts to EUR -119\u00a0million ( 2022: EUR 3\u00a0million) and the change for the current year is EUR -122\u00a0million
(2022: EUR 72\u00a0million).
The changes in fair value attributable to changes in credit risk have been calculated by determining the
changes in credit spread implicit in the fair value of loans and bonds issued by entities with similar credit
characteristics.
Mandatorily at fair value through profit or loss
Mandatorily at fair value through profit or loss by type
in EUR million
2023
2022
Equity securities
179
203
Debt securities
894
821
Loans and receivables
53,911
45,820
54,983
46,844
Equity securities are individually insignificant for ING Group. For debt securities total exposure reference is
made to Note 6 'Debt securities' . Loans and receivables include mainly reverse repurchase agreements.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss (31 December 2023: EUR 538\u00a0million). For further information
on the change in accounting policies, reference is made to Note 1 'Basis of preparation and material
accounting policy information'.\u00a0
5\u00a0 Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income by type
in EUR million
2023
2022
Equity securities
1,885
1,887
Debt securities 1
38,281
29,095
Loans and advances 1
951
643
41,116
31,625
1 Debt securities include an amount of EUR -13 million (2022: EUR -21 million) and the Loans and advances includes EUR -8 million\u00a0
(2022: EUR -1 million) of Loan loss provisions.
Exposure to equity securities
Equity securities designated as at fair value through other comprehensive income
Carrying
value
Carrying
value
Dividend
income
Dividend
income
in EUR million
2023
2022
2023
2022
Investment in Bank of Beijing
1,590
1,614
98
111
Other Investments
295
273
7
38
1,885
1,887
105
149
As at 31\u00a0December 2023 ING holds approximately 13% (2022: 13%) of the shares of Bank of Beijing, a bank
listed on the stock exchange of Shanghai. Bank of Beijing stake is part of the Corporate Line segment. As per
regulatory requirements set by China Banking and Insurance Regulatory Commission, ING, as a shareholder
holding more than 5% or more of the shares, is required to supply additional capital when necessary. No
request for additional capital was received in 2023 (2022 : nil).
Changes in fair value through other comprehensive income
The following table presents changes in financial assets at fair value through other comprehensive income.
Changes in fair value through other comprehensive income financial assets
FVOCI equity
securities
FVOCI debt
instruments 1
Total
in EUR million
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
1,887
2,457
29,739
28,178
31,625
30,635
Additions
28
17
19,967
18,789
19,995
18,806
Amortisation
31
-18
31
-18
Transfers and reclassifications\u00a0
5
10
5
10
Changes in unrealised revaluations 2
68
-65
657
-3,230
725
-3,295
Impairments
-1
-1
Reversals of impairments
6
3
6
3
Disposals and redemptions
-2
-492
-11,912
-14,034
-11,913
-14,526
Exchange rate differences
-100
-39
751
49
651
10
Changes in the composition of the group and other
changes
-6
1
-6
1
Closing balance
1,885
1,887
39,231
29,739
41,116
31,625
1 Fair value through other comprehensive income debt instruments includes both debt securities and loans and advances.
2 Changes in unrealised revaluations of FVOCI debt instruments include changes on hedged items which are recognized in the
statement of profit or loss. Reference is made to Note 19 'Equity' for details on the changes in revaluation reserve.
FVOCI equity securities
Exchange rate differences of EUR -100\u00a0million (31 December 2022: EUR -39 million) are mainly related to the
stake in Bank of Beijing following the depreciation of CNY versus EUR. Furthermore in 2023, changes in
unrealised revaluations of equity securities are mainly related to the revaluation of the stake in Bank of
Beijing of EUR 77\u00a0million following changes in share price (31 December 2022: EUR -49\u00a0million).
In 2022, disposals of EUR 492 million mainly relate to the sale in the second quarter of HQLA eligible equity
instruments triggered by the changing interest rate environment and deteriorating market sentiment. This
portfolio was built up in early 2021 (additions in 2021: EUR 499 million) and was a relatively small part of the
HQLA portfolio. This was a diversified buy-and-hold portfolio aimed at generating stable dividend income
stream.
FVOCI debt instruments
In 2022, interest rates in both short and longer tenors increased significantly which resulted in changes in
unrealised revaluations of debt securities of EUR -3,230 million. During 2023 interest rates decreased
resulting in unrealised revaluations of EUR 657\u00a0million.
Reference is made to Note 6 'Debt securities' for details on ING Group\u2019s total exposure to debt securities.
14\u00a0 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
in EUR million
2023
2022
Trading liabilities
37,220
39,088
Non-trading derivatives
2,019
3,048
Designated at fair value through profit or loss
55,400
50,883
94,638
93,019
Trading liabilities
Trading liabilities by type
in EUR million
2023
2022
Equity securities
1,156
935
Debt securities
2,492
1,291
Funds on deposit
10,443
5,993
Derivatives
23,129
30,869
37,220
39,088
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in:
-\u00a0 fair value hedges
113
244
-\u00a0 cash flow hedges
458
1,275
-\u00a0 hedges of net investments in foreign operations
92
83
Other non-trading derivatives
1,356
1,446
2,019
3,048
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives used for
hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign currency swaps for hedging
purposes, but for which no hedge accounting is applied.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
8,672
6,537
Funds entrusted
46,633
44,263
Subordinated liabilities
95
82
55,400
50,883
As at 31\u00a0December 2023, the change in the fair value of financial liabilities designated at fair value through
profit or loss attributable to changes in credit risk is EUR -34 million (2022: EUR\u00a0-75 million) on a cumulative
basis. This change has been determined as the amount of change in fair value of the financial liability that is
not attributable to changes in market conditions that gave rise to market risk (i.e. mainly interest rate risk
based on yield curves).
The amount that ING Group is contractually required to pay at maturity to the holders of financial liabilities
designated at fair value through profit or loss excluding repurchase agreements (part of funds entrusted) is
EUR 9,957 million (2022: EUR\u00a08,408 million).
Funds entrusted include mainly repurchase agreements. For more information on repurchase transactions
refer to Note 4 'Financial assets at fair value through profit or loss'.
22\u00a0 Valuation results and net trading income
Valuation results and net trading income
in EUR million
2023
2022
2021
Securities trading results
873
-356
787
Derivatives trading results
116
11
-554
Other trading results
273
71
84
Change in fair value of derivatives relating to
\u2013\u00a0 fair value hedges
-3,028
5,265
-85
\u2013\u00a0 cash flow hedges (ineffective portion)
48
20
1
\u2013\u00a0 other non-trading derivatives
563
1,164
-53
Change in fair value of assets and liabilities (hedged items)
2,962
-5,150
113
Valuation results on assets and liabilities designated at FVPL (excluding trading)
-128
439
-13
Foreign exchange transactions results
1,230
38
567
2,910
1,501
847
In general, the fair value movements are influenced by changes in the market conditions, such as stock
prices, credit spreads, interest rates and currency exchange rates. In 2023, the financial markets were
characterised by elevated levels of volatility. In the first quarter of the year, the markets worldwide were
shaken by the demise of SVB bank and the stress surrounding Credit Suisse, fuelling uncertainty around
possible additional defaults. Furthermore, the ongoing interest-rate hikes by the central banks in Europe and
the US led to a fast increase in rates worldwide. Toward the end of the year, the probability increased for
interest rates going down, which has been reflected in the forward interest rates. In 2022, the market was
affected by a significant increase in interest-rates volatility, interest-rate hikes across EU and US, and a
steady fall of the EUR value and appreciation of USD, while in 2021 the market recovered from the Covid-19
pandemic, stabilised and returned to pre-pandemic levels.
Securities trading results includes the results of market making in instruments such as government
securities, equity securities, corporate debt securities, money-market instruments. Derivatives trading
results includes the results of derivatives such as interest rate swaps, options, futures, and forward
contracts. Trading gains and losses relating to trading securities still held as at 31\u00a0December 2023 amount
to EUR 160\u00a0million ( 2022: EUR -157\u00a0million ; 2021: EUR\u00a0-268\u00a0million). The majority of the risks involved in
security and currency trading are economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading
results.
Other trading results include the results of trading loans and funds entrusted.
Foreign exchange transactions results include gains and losses from spot and forward contracts, options,
futures, and translated foreign currency assets and liabilities. The result on currency trading is included in
foreign exchange transactions results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that
are classified under IFRS as Trading but are closely related to servicing the needs of the clients of ING. ING
offers products that are traded on the financial markets to institutional clients, corporate clients, and
governments. ING\u2019s trading books are managed based on internal limits and comprise a mix of products
with results which could be offset. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate
exposures. From a risk perspective, the gross amount of trading assets must be considered together with
the gross amount of trading liabilities, which are presented separately on the statement of financial
position. However, IFRS does not always allow netting of these positions in the statement of financial
position. Reference is made to Note 4 'Financial assets at fair value through profit or loss' and Note 14
'Financial liabilities at fair value through profit or loss' for information on trading assets and trading liabilities
respectively.
\u2018Valuation results and net trading income\u2019 include the fair value movements on derivatives (used for both
hedge accounting and economically hedging exposures) as well as the changes in the fair value of assets
and liabilities included in hedging relationships as hedged items. During 2023, the interest-rate movements
significantly affected the fair value changes of other non-trading derivatives as well as the fair value
changes of both the derivatives and the hedged items designated in fair value hedges. Reference is made to
Note 36 'Derivatives and hedge accounting' for information on derivatives used for hedge accounting.
Furthermore, derivatives trading results is also impacted by fair value movements arising from changes in
credit spreads (CVA and DVA), bid offer spreads, model risk and incremental cost of funding on derivatives
(FVA and CollVA). Refer to Note 35 'Fair value of assets and liabilities' for information on these valuation
adjustments.
Valuation results on assets and liabilities designated at fair value through profit or loss (excluding trading)\u2019
include fair value changes on financial assets and financial liabilities driven by changed market conditions.
Refer to Note 4 'Financial assets at fair value through profit or loss' and to Note 14 'Financial liabilities at fair
value through profit or loss'.
In addition, \u2018Valuation results on assets and liabilities designated at fair value through profit or loss
(excluding trading)\u2019 include fair value adjustments on own issued notes amounting to EUR -230\u00a0million
(2022: EUR 745 million; 2021: EUR 65 million).
35\u00a0 Fair value of assets and liabilities
a) Valuation Methods
The estimated fair values represent the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. It is a market-
based measurement, which is based on assumptions that market participants would use and takes into
account the characteristics of the asset or liability that market participants would take into account when
pricing the asset or liability.
Fair values of financial assets and liabilities are based on quoted prices in active market where available.
When such quoted prices are not available, the fair value is determined by using valuation techniques.
In 2023, the financial markets were characterised by elevated levels of volatility. In the first quarter of the
year, the markets worldwide were shaken by the demise of SVB bank and the stress surrounding Credit
Suisse, fuelling uncertainty around possible additional defaults. Furthermore, the ongoing interest rate hikes
by the central banks in Europe and the US led to a fast increase in rates worldwide. Towards the end of the
year, the probability increased for interest rates to go down, which has been reflected in the forward
interest rates. Additionally, geopolitical risk increased with the Israel-Gaza conflict adding to the risk arising
from the ongoing Russia-Ukraine war.
Financial assets and liabilities, including Level 3, are valued using agreed methodologies, targeting the most
appropriate estimate of fair value.
b) Valuation control framework
The valuation control framework covers the product approval process (PARP), pricing, market data
assessment and independent price verification (IPV), valuation adjustments, model use, fair value hierarchy
and day one profit or loss. Valuation processes are governed by various governance bodies, including Local
Parameter Committees, Global Valuation and Impairment Committee, Market Data Committee and
Valuation Model Committee. All relevant committees meet on a regular basis (monthly/quarterly), where
agenda covers the aforementioned valuation controls.
The Global Valuation and Impairment Committee is responsible for the oversight and the approval of the
outcome of impairments (other than loan loss provisions) and valuation processes. It oversees the quality
and coherence of valuation methodologies and performance. The Valuation Model Committee is responsible
for the approval of all valuation models used for the Fair valuation (IFRS) and Prudent Valuation (CRR) of
positions measured at fair value. The Local Parameter Committee discusses the valuation results and
monitors the performance of the valuation activities carried out on local or regional level. The Global
Financial Markets Parameter Committee reviews the consolidated valuation outcome and resulting P&L for
Financial Market products, targeting a globally consistent treatment across Financial Market. The Market
Data Committee is responsible for the approval of the market data used in valuation.\u00a0
c) Valuation Adjustments
Valuation adjustments are an integral part of the fair value. They are the adjustments to the output from a
valuation technique in order to appropriately determine a fair value in accordance with IFRS13. ING
considers various fair value adjustments including Bid-Offer adjustments, Model Risk adjustments, Bilateral
Valuation Adjustments (BVA, consisting of Credit Valuation Adjustments or CVA, and Debit valuation
Adjustments or DVA), Collateral Valuation Adjustment (CollVA) and Funding Valuation Adjustment (FVA).
For financial instruments where the fair value at initial recognition is based on one or more significant
unobservable inputs, a difference between the transaction price and the fair value resulting from the
internal valuation process can occur. Such difference is referred to as Day One Profit or Day One Loss
(hereafter: DOP). ING defers material Day One Profit or Loss of instruments with significant unobservable
valuation inputs, which are the financial instruments classified as Level 3 and financial instruments with
material unobservable inputs into CVA which are not necessarily classified as Level 3. The DOP is amortised
over the life of the instrument, or until the significant unobservable inputs become observable, or until the
significant unobservable inputs become non-significant. Both the impact on the profit and loss in 2023 and
the DOP reserve is disclosed in the below table.
Deferred Day One Profit or Loss Reserve
The table below summarizes the movement in the aggregate DOP not recognised when financial
instruments were initially recognised, because of the use of valuation techniques for which not all the inputs
were market observable data.
Deferred day one profit or loss reserve
in EUR million
2023
2022
Opening balance at 1 January
-108
-7
DOP deferred on new transactions during the period
-83
-107
DOP recognised in the statement of profit or loss during the period:
\u2022 of which release
85
6
\u2022 of which amortisation and exchange differences
15
0
Closing balance at 31 December
-90
-108
The following table presents the models reserves for financial assets and liabilities.
Valuation adjustment reserves on financial assets and liabilities
in EUR million
2023
2022
Deferred Day One Profit or Loss
-90
-108
Own credit adjustments
34
75
Bid/Offer
-154
-216
Model Risk
-26
-13
CVA
-131
-192
DVA
55
99
CollVA
-4
-8
FVA
-68
-78
Total Valuation Adjustments
-385
-441
Own Credit Adjustment
Own issued debt and structured notes that are designated at fair value through profit or loss are adjusted
for ING`s own credit risk by means of DVA.
Bid-Offer Adjustment
For positions priced based upon mid-market input parameters, Bid-Offer adjustments are required in order
to reflect the valuation of that position based on bid price or offer price. In practice this adjustment accounts
for the difference in valuation from \u2018mid to bid\u2019 and \u2018mid to offer\u2019 for long and short exposures respectively.
In principle assets are valued at the bid prices and liabilities are valued at the offer price. For certain assets
or liabilities, where a market quoted price is not available, the price used is the fair value that is most
representative within the bid-offer spread.
Model Risk Adjustment
Financial instruments that are valued using a valuation model can be subject to model risk. Model risk is the
risk of possible financial loss resulting from pricing model or model-based parameter deficiencies and/or
uncertainties.
Bilateral Valuation Adjustments (Credit and Debit Valuation Adjustments)\u00a0
Bilateral Valuation Adjustment is the valuation adjustment reflecting the counterparty credit risk of
derivative contracts. It has a bilateral nature, where both the counterparty\u2019s credit risk (i.e. Credit Valuation
Adjustment or CVA) and ING\u2019s own credit risk (Debit Valuation Adjustment or DVA) are taken into account:
\u2022 CVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
the counterparty defaults (i.e. it is the market value of the counterparty\u2019s credit risk).
\u2022 DVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
ING defaults (i.e. it is the market value of ING\u2019s credit risk).
The calculation of CVA and DVA on derivatives is based on their expected exposures, the counterparties\u2019 and
ING\u2019s risk of default, taking into account the collateral agreements as well as netting agreements. The
counterparties\u2019 risk of default is measured by probability of default and expected loss given default, which is
based on market information including credit default swap (CDS) spreads. Where counterparty CDS spreads
are not available, relevant proxy spreads are used. Additionally, wrong-way risk (which occurs when the
probability of default by the counterparty increases (decreases) when ING\u2019s exposure to the counterparty
increases (decreases)) and right-way risk (which occurs when the probability of default by the counterparty
increases (decreases) when ING\u2019s exposure to the counterparty decreases (increases)) are included in the
adjustment.
Collateral Valuation Adjustment (CollVA)
Collateral Valuation Adjustment is a fair valuation adjustment applied on derivative instruments to capture
specific features of CSA (Credit Support Annex) with a counterparty that the regular OIS discounting
framework does not capture. Non-standard CSA features may include deviations in relation to the
currencies in which ING posts or receives collateral, deviations in remuneration rate on collateral which may
pay lower or higher rate than overnight rate or even no interest at all; other deviations can be posting
securities rather than cash as collateral, etc.
Funding Valuation Adjustment (FVA)
Funding Valuation Adjustment (FVA) is a fair valuation adjustment applied on derivative instruments to
address the asymmetry in funding costs or funding benefits between collateralized and uncollateralized
derivatives portfolios. This adjustment is based on the expected exposure profiles of the uncollateralized or
partially collateralized OTC derivatives and market-based funding spreads.
d) Fair value hierarchy
ING Group has categorised its financial instruments that are either measured in the statement of financial
position at fair value or of which the fair value is disclosed, into a three level hierarchy based on the
observability of the valuation inputs. Highest priority is retained to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to valuation techniques supported by
unobservable inputs.
Transfers into and transfers out of fair value hierarchy levels are made on a quarterly basis at the end of the
reporting period.
Level 1 \u2013 (Unadjusted) quoted prices in active markets
This category includes financial instruments whose fair value is determined directly by reference to
(unadjusted) quoted prices in an active market. A financial instrument is regarded as quoted in an active
market if quoted prices are readily and regularly available from an exchange, dealer markets, brokered
markets, or principal to principal markets. Those prices represent actual and regularly occurring market
transactions with sufficient frequency and volume to provide pricing information on an ongoing basis.
Transfers out of Level 1 into Level 2 or Level 3 occur when ING Group establishes that markets are no longer
active and therefore (unadjusted) quoted prices no longer provide reliable pricing information.
Level 2 \u2013 Valuation technique supported by observable inputs
This category includes financial instruments whose fair value is based on market observable inputs, either
directly or indirectly, other than quoted prices included within Level 1. The fair value for financial
instruments in this category can be determined by reference to quoted prices for similar instruments in
active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other
than quoted prices that are observable or market-corroborated inputs. ING analyses how the prices are
derived and determines whether the prices are liquid tradable prices or model-based consensus prices
taking various data as inputs.
For financial instruments that do not have a reference price available, fair value is determined using a
valuation technique (e.g., a model), where inputs in the model are taken from an active market or are
observable, such as interest rates and yield curves observable at commonly quoted intervals, implied
volatilities, and credit spreads.
Instruments, where inputs are unobservable are classified in this category, provided that the impact of
those unobservable inputs on the overall valuation is insignificant. The notion of significant is particularly
relevant for the distinction between Level 2 and Level 3 assets and liabilities, as the significance assessment
of the valuation input on the entire fair value measurement will determine whether the instrument should
be classified as Level 2 or Level 3. Expert judgement is required on the significance assessment approach.
Level 3 \u2013 Valuation technique supported by unobservable inputs
This category includes financial instruments whose fair value is determined using a valuation technique for
which a significant part of the overall valuation is driven by unobservable valuation inputs. Where valuation
inputs are unobservable, the Group must use the best information available to value the instruments. This
may require internally derived inputs taking into account market participants assumptions that are
reasonably available, including assumptions on the risk inherent in a particular valuation technique used to
measure fair value and the risk inherent in the inputs to the valuation technique. Unobservable inputs may
include, among others, volatility, correlation, spreads to discount rates, default rates, recovery rates,
prepayment rates, and certain credit spreads.
Financial instruments at fair value
The fair values of the financial instruments\u00a0 were determined as follows:
Methods applied in determining fair values of financial assets and liabilities (carried at fair value)
Level 1
Level 2
Level 3
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Financial assets at fair value
through profit or loss
- Equity securities
15,438
11,783
3
2
150
156
15,590
11,941
- Debt securities
4,825
1,636
4,081
5,361
3,364
3,450
12,270
10,447
- Derivatives
39
22
27,134
34,229
535
483
27,708
34,734
- Loans and receivables
0
0
63,316
54,097
4,131
2,547
67,446
56,644
20,302
13,441
94,533
93,690
8,179
6,635
123,015
113,766
Financial assets at fair value
through other
comprehensive income
- Equity securities
1,622
1,639
0
0
263
247
1,885
1,887
- Debt securities
35,848
25,644
2,433
3,451
0
0
38,281
29,095
- Loans and receivables
0
0
275
0
676
643
951
643
37,470
27,284
2,707
3,451
938
891
41,116
31,625
Financial liabilities
Financial liabilities at fair
value through profit or loss
\u2013\u00a0 Debt securities
1,088
822
7,635
5,743
47
53
8,770
6,619
\u2013\u00a0 Deposits
0
0
57,063
50,257
13
0
57,076
50,257
\u2013\u00a0 Trading securities
3,604
1,952
41
273
0
1
3,645
2,226
\u2013\u00a0 Derivatives
41
40
24,437
33,200
670
678
25,148
33,917
4,733
2,814
89,175
89,473
729
732
94,638
93,019
The following methods and assumptions were used by ING Group to estimate the fair value of the financial
instruments:
Equity securities
Instrument description: Equity securities include stocks and shares, corporate investments and private
equity investments.
Valuation: If available, the fair values of publicly traded equity securities and private equity securities are
based on quoted market prices. In absence of active markets, fair values are estimated by analysing the
investee\u2019s financial position, result, risk profile, prospect, price, earnings comparisons and revenue multiples.
Additionally, reference is made to valuations of peer entities where quoted prices in active markets are
available. For equity securities best market practice will be applied using the most relevant valuation
method. All non-listed equity investments, including investments in private equity funds, are subject to a
standard review framework which ensures that valuations reflect the fair values.
Fair value hierarchy: The majority of equity securities are publicly traded and quoted prices are readily and
regularly available. Hence, these securities are classified as Level 1.\u00a0 Equity securities which are not traded in
active markets mainly include corporate investments, fund investments and other equity securities and are
classified as Level 3.
Debt securities
Instrument description: Debt securities include government bonds, financial institutions bonds and Asset-
backed securities (ABS).
Valuation: Where available, fair values for debt securities are generally based on quoted market prices.
Quoted market prices are obtained from an exchange market, dealer, broker, industry group, pricing service,
or regulatory service. The quoted prices from non-exchange sources are reviewed on their tradability of
market prices. If quoted prices in an active market are not available, fair value is based on an analysis of
available market inputs, which includes consensus prices obtained from one or more pricing services.
Furthermore, fair values are determined by valuation techniques discounting expected future cash flows
using market interest rate curves, referenced credit spreads, maturity of the investment, and estimated
prepayment rates where applicable.
Fair value hierarchy: Government bonds and financial institutions bonds are generally traded in active
markets, where quoted prices are readily and regularly available and are hence, classified as Level 1. The
remaining positions are classified as Level 2 or Level 3. Asset backed securities for which no active market is
available and a wide discrepancy in quoted prices exists, are classified as Level 3.
Derivatives
Instrument description: Derivatives contracts can either be exchange-traded or over the counter (OTC).
Derivatives include interest rate derivatives, FX derivatives, Credit derivatives, Equity derivatives and
commodity derivatives.
Valuation: The fair value of exchange-traded derivatives is determined using quoted market prices in an
active market and are classified as Level 1 of the fair value hierarchy. For instruments that are not actively
traded, fair values are estimated based on valuation techniques. OTC derivatives and derivatives trading in
an inactive market are valued using valuation techniques. The valuation techniques and inputs depend on
the type of derivatives and the nature of the underlying instruments. The principal techniques used to value
these instruments are based on (amongst others) discounted cash flows, option pricing models and Monte
Carlo simulations. These valuation models calculate the present value of expected future cash flows, based
on \u2018no-arbitrage\u2019 principles. The models are commonly used in the financial industry and inputs to the
validation models are determined from observable market data where possible. Certain inputs may not be
observable in the market, but can be determined from observable prices via valuation model calibration
procedures. These inputs include prices available from exchanges, dealers, brokers or providers of pricing,
yield curves, credit spreads, default rates, recovery rates, dividend rates, volatility of underlying interest
rates, equity prices, and foreign currency exchange rates and reference is made to quoted prices, recently
executed trades, independent market quotes and consensus data, where available.
For uncollateralised OTC derivatives, ING applies Credit Valuation Adjustment to correctly reflect the
counterparty credit risk in the valuation and Debit Valuation Adjustments to reflect the credit risk of ING for
its counterparty. In addition, for these derivatives ING applies Funding Valuation Adjustment. See sections
CVA/DVA and FVA in section c) Valuation Adjustments for more details regarding the calculation.
Fair value hierarchy: The majority of the derivatives are priced using observable inputs and are classified as
Level 2. Derivatives for which the input cannot be implied from observable market data are classified as
Level 3.
Loans and receivables
Instrument description: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables carried at fair value includes
trading loans, being securities lending and similar agreement comparable to collateralised lending,
syndicated loans, loans expected to be sold and receivables with regards to reverse repurchase
transactions.
Valuation: The fair value of loans and receivables is generally estimated by discounting expected future cash
flows using a discount rate that reflects credit risk, liquidity, and other current market conditions. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour.
Fair value hierarchy: Loans and receivables are predominantly classified as Level 2. Loans and receivables
for which current market information about similar assets to use as observable, corroborated data for all
significant inputs into a valuation model is not available, are classified as Level 3.
Financial liabilities at fair value through profit and loss
Instrument description: Financial liabilities at fair value through profit and loss include debt securities, debt
instruments, primarily comprised of structured notes, which are held at fair value under the fair value
option. Besides that, it includes derivative contracts and repurchase agreements.
Valuation: The fair values of securities in the trading portfolio and other liabilities at fair value through profit
or loss are based on quoted market prices, where available. For those securities not actively traded, fair
values are estimated based on internal discounted cash flow valuation techniques using interest rates and
credit spreads that apply to similar instruments.
Fair value hierarchy: The majority of the derivatives and debt instruments are classified as Level 2.
Derivatives and debt instruments for which the input cannot be derived from observable market data are
classified as Level 3.
e) Transfers between Level 1 and 2
As a consequence of change in observable inputs, ING recorded an EUR 2.4 billion transfer from Level 2 to
Level 1 in debt securities measured at fair value through other comprehensive income. Furthermore, EUR
1.7 billion transfers from Level 1 to Level 2 were recorded in the reporting period 2023.
f) Level 3: Valuation techniques and inputs used
Financial assets and liabilities in Level 3 include both assets and liabilities for which the fair value was
determined using (i) valuation techniques that incorporate unobservable inputs as well as (ii) quoted prices
which have been adjusted to reflect that the market was not actively trading at or around the balance sheet
date. Unobservable inputs are inputs which are based on ING\u2019s own assumptions about the factors that
market participants would use in pricing an asset or liability, developed based on the best information
available in the circumstances. Unobservable inputs may include volatility, correlation, spreads to discount
rates, default rates and recovery rates, prepayment rates, and certain credit spreads. Valuation techniques
that incorporate unobservable inputs are sensitive to the inputs used.
Of the total amount of financial assets classified as Level 3 as at 31\u00a0December 2023 of EUR 9.1 billion
(31\u00a0December 2022: EUR 7.5 billion), an amount of EUR 7.0 billion (76.7%) (31\u00a0December 2022: EUR 2.2
billion, being 29.2%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial assets includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 4.2
billion) which relates to financial assets that are part of structures that are designed to be fully neutral in
terms of market risk. Such structures include various financial assets and liabilities for which the overall
sensitivity to market risk is insignificant. Whereas the fair value of individual components of these structures
may be determined using different techniques and the fair value of each of the components of these
structures may be sensitive to unobservable inputs, the overall sensitivity is by design not significant.
The remaining EUR 1.8 billion (31\u00a0December 2022: EUR 1.1 billion of the fair value classified in Level 3
financial assets is established using valuation techniques that incorporates certain inputs that are
unobservable.
Of the total amount of financial liabilities classified as Level 3 as at 31\u00a0December 2023 of EUR 0.7 billion
(31\u00a0December 2022: EUR 0.7 billion), an amount of EUR 0.4 billion (50.0%) (31\u00a0December 2022: EUR 0.02
billion, being 2.5%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial liabilities includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 0.6
billion) which relates to financial liabilities that are part of structures that are designed to be fully neutral in
terms of market risk. As explained above, the fair value of each of the components of these structures may
be sensitive to unobservable inputs, but the overall sensitivity is by design not significant.
The remaining EUR 0.1 billion (31\u00a0December 2022: EUR 0.1 billion of the fair value classified in Level 3
financial liabilities is established using valuation techniques that incorporates certain inputs that are
unobservable.
The table below provides a summary of the valuation techniques, key unobservable inputs and the lower
and upper range of such unobservable inputs, by type of Level 3 asset/liability. The lower and upper range
mentioned in the overview represent the lowest and highest variance of the respective valuation input as
actually used in the valuation of the different financial instruments. Amounts and percentages stated are
unweighted. The range can vary from period to period subject to market movements and change in Level\u00a03
position. Lower and upper bounds reflect the variability of Level 3 positions and their underlying valuation
inputs in the portfolio, but do not adequately reflect their level of valuation uncertainty. For valuation
uncertainty assessment, reference is made to section Sensitivity analysis of unobservable inputs (Level 3).
Valuation techniques and range of unobservable inputs (Level 3)
Assets
Liabilities
Valuation techniques
Significant unobservable inputs
Lower range
Upper range
In EUR million
2023
2022
2023
2022
2023
2022
2023
2022
At fair value through profit or loss
Debt securities
3,364
3,447
0
1
Price based
Price (%)
0%
0%
122%
125%
Price (price per share)
97
208
236
208
Present value techniques
Credit spread (bps)
94
60
94
100
Price (%)
n.a.
97%
n.a.
100%
Equity securities
150
156
Price based
Price (price per share)
0
0
5,457
5,457
Loans and advances
2,298
1,485
13
Price based
Price (%)
0%
0%
117%
100%
Present value techniques
Credit spread (bps)
1
2
12
12
(Reverse) repo's
1,832
1,062
Present value techniques
Interest rate (%)
n.a.
3%
n.a.
5%
Structured notes
3
47
53
Price based
Price (%)
88%
84%
96%
107%
Option pricing model
Equity volatility (%)
9%
13%
23%
42%
Equity/Equity correlation
0.8
0.5
0.9
1.0
Equity/FX correlation
-0.2
-0.4
0.6
0.6
Dividend yield (%)
0%
0%
4%
8%
Present value techniques
Credit spreads (bps)
100
96
101
96
Derivatives
\u2013\u00a0\u00a0Rates
283
431
301
476
Option pricing model
Interest rate volatility (bps)
1
49
3
148
Present value techniques
Reset spread (%)
n.a.
0%
n.a.
1%
Interest rate (%)
n.a.
2%
n.a.
2%
Prepayment rate (%)
0%
5%
0%
13%
\u2013\u00a0\u00a0FX
2
5
3
4
Option pricing model
Implied volatility (%)
3%
6%
18%
20%
\u2013\u00a0\u00a0Credit
216
13
343
175
Present value techniques
Credit spread (bps)
3
5
149
623
Price based
Price (%)
0%
0%
100%
100%
\u2013\u00a0\u00a0Equity
20
33
17
22
Option pricing model
Equity volatility (%)
12%
0%
75%
77%
Equity/Equity correlation
0.2
0.5
1.0
0.9
Equity/FX correlation
-0.5
-0.5
1.0
0.1
Dividend yield (%)
0%
1%
14%
14%
Price based
Price (%)
0%
n.a
21%
n.a
\u2013\u00a0\u00a0Other
14
1
7
Option pricing model
Commodity volatility (%)
11%
0%
94%
63%
At fair value through other comprehensive income
\u2013\u00a0\u00a0Loans and advances
676
643
Present value techniques
Prepayment rate (%)
n.a.
6%
n.a.
6%
Price based
Price (%)
85%
67%
96%
99%
\u2013\u00a0\u00a0Equity
263
247
Present value techniques
Credit spread (bps)
5.2
6.7
5.2
6.7
Interest rate (%)
4%
4%
4%
4%
Price based
Price (%)
122%
n.a
122%
n.a
Price based
Other (EUR)
n.a
70
n.a
90
Total
9,117
7,526
729
732
Price
For securities where market prices are not available, fair value is measured by comparison with observable
pricing data from similar instruments. Prices of 0% are distressed to the point that no recovery is expected,
while prices significantly in excess of 100% or par are expected to pay a yield above current market rates.
Credit spreads
Credit spread is the premium above a benchmark interest rate required by the market participant to accept
a lower credit quality. Higher credit spreads indicate lower credit quality and a lower value of an asset.
Volatility
Volatility is a measure for variation of the price of a financial instrument or other valuation input over time.
Volatility is one of the key inputs in option pricing models. Typically, the higher the volatility, the higher
value of the option. Volatility varies by the underlying reference (equity, commodity, foreign currency and
interest rates), by strike, and maturity of the option. The minimum level of volatility is 0% and there is no
theoretical maximum.
Correlation
Correlation is a measure of dependence between two underlying references which is relevant for valuing
derivatives and other instruments having more than one underlying reference. High positive correlation
(close to 1) indicates strong positive (statistical) relationship, where underliers move, everything else equal,
into the same direction. The same holds for a high negative correlation.
Interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or
borrowed.
Reset spread
Reset spreads are key inputs to mortgage linked prepayment swaps valuation. Reset spread is the future
spread at which mortgages will re-price at interest rate reset dates.
Dividend yield
Dividend yield is an important input for equity option pricing models showing how much dividends a
company is expected to pay out each year relative to its share price. Dividend yields are generally expressed
as an annualised percentage of share price.
Prepayment rate
Prepayment rate is a key input to mortgage and loan valuation. Prepayment rate is the estimated rate at
which mortgage borrowers will repay their mortgages early, e.g. 5% per year. Prepayment rate and reset
spread are key inputs to mortgage linked prepayment swaps valuation.
Level 3: Changes during the period
Changes in Level 3 Financial assets
Trading assets
Non-trading derivatives
Financial assets
mandatorily at FVPL
Financial assets
designated at FVPL
Financial assets at
FVOCI
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
873
822
421
1
1,849
1,862
3,492
2,480
891
1,063
7,526
6,228
Realised gain/loss recognised in the statement of profit or loss during the period 1
235
53
-142
52
-33
-57
-383
122
8
-322
178
Revaluation recognised in other comprehensive income during the period 2
-6
-84
-6
-84
Purchase of assets
1,246
694
76
15
2,208
1,586
873
772
331
221
4,735
3,288
Sale of assets
-889
-49
-55
-4
-1,109
-669
-138
-191
-243
-275
-2,433
-1,187
Maturity/settlement
-1,005
-511
-15
-2
-576
-617
-292
-22
-59
-1,910
-1,188
Reclassifications
723
-18
5
10
728
-8
Transfers into Level 3
879
288
474
981
605
1
322
-43
1,860
1,646
Transfers out of Level 3
-459
-442
-115
-534
-856
-994
-1,414
Exchange rate differences
-31
18
-9
14
-9
-12
-10
49
-59
68
Changes in the composition of the group and other changes
2
-8
-6
0
Closing balance
848
873
286
421
3,499
1,849
3,547
3,492
938
891
9,118
7,526
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amounts includes EUR 316 million (2022: EUR -171 million) of unrealised gains and losses recognised in the statement of profit or loss.
2 Revaluation recognised in other comprehensive income is included on the line \u2018Net change in fair value of debt instruments at fair value through other comprehensive income\u2019.
In 2023, transfers into and out of Level 3 of financial assets mandatorily at fair value mainly relate to (long
term) reverse repurchase transactions for which the valuation being significantly impacted by unobservable
inputs and no longer significantly impacted by unobservable inputs, respectively.
In 2023, the transfer into Level 3 trading assets is mainly driven by debt securities that are part of a
structure transferred into level 3 due to market illiquidity which decreased observability for an input.
In 2022, the transfers into Level 3 mainly consisted of (non) trading derivatives that were transferred to
Level 3 as a result of the valuation being significantly impacted by unobservable inputs. Furthermore, it
relates to debt obligations of which the valuation is being significantly impacted by unobservable inputs.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss as shown in reclassifications. For further information on the
change in accounting policies, reference is made to Note 1 'Basis of preparation and material accounting
policy information'.
In 2022, following the enhancement of the significance assessment, transfers into and out of Level 3 of
financial assets mandatorily at fair value mainly relate to a portfolio of securitization loans. Furthermore,
transfers out of Level 3 relate to two syndicated deals due to the unobservable parameters were
insignificant.
In 2022, transfers into level 3 financial assets designated at fair value relate to government bonds of which
the valuation being significantly impacted by unobservable inputs.
Changes in Level 3 Financial liabilities
Trading liabilities
Non-trading
derivatives
Financial liabilities
designated as at fair
value through profit
or loss
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1
January
229
160
449
35
54
135
732
330
Realised gain/loss recognised
in the statement of profit or
loss during the period1
224
131
-151
59
-2
-10
72
179
Additions
53
124
72
16
18
13
142
153
Redemptions
-102
-38
-53
0
-2
-13
-156
-51
Maturity/settlement
-13
-282
-16
-7
-1
-71
-30
-360
Transfers into Level 3
40
254
0
368
32
88
72
710
Transfers out of Level 3
-49
-117
0
-21
-54
-88
-102
-226
Exchange rate differences
0
-3
0
0
0
0
0
-3
Closing balance
382
229
301
449
47
54
729
732
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amount
includes EUR 72 million (2022: EUR 179\u00a0million) of unrealised gains and losses recognised in the statement of profit or loss.
In 2023, financial liabilities transfers into and out of Level 3 mainly consisted of structured notes, measured
as designated at fair value through profit or loss. The structured notes were transferred out of Level 3 as the
valuation was no longer impacted by significantly unobservable inputs.
In 2022, the transfers into Level 3 mainly consisted of non-trading derivatives that were transferred to Level
3 as a result of the valuation being significantly impacted by unobservable inputs.
g) Recognition of unrealised gains and losses in Level 3
Amounts recognised in the statement of profit or loss relating to unrealised gains and losses during the year
that relates to Level 3 assets and liabilities are included in the line item \u2018Valuation results and net trading
income\u2019 in the statement of profit or loss.
h) Level 3: Sensitivity analysis of unobservable inputs
Where the fair value of a financial instrument is determined using inputs which are unobservable and which
have a more than insignificant impact on the fair value of the instrument, the actual value of those inputs at
the balance date may be drawn from a range of reasonably possible alternatives. In line with market
practice the upper and lower bounds of the range of alternative input values reflect a level of valuation
certainty. The actual levels chosen for the unobservable inputs in preparing the financial statements are
consistent with the valuation methodology used for fair valued financial instruments.
In practice valuation uncertainty is measured and managed per exposure to individual valuation inputs (i.e.
risk factors) at portfolio level across different product categories. Where the disclosure looks at individual
Level 3 inputs, the actual valuation adjustments may also reflect the benefits of portfolio offsets.
This disclosure does not attempt to indicate or predict future fair value movement. The numbers in isolation
give limited information as in most cases these Level 3 assets and liabilities should be seen in combination
with other instruments (for example as a hedge) that are classified as Level 2.
The valuation uncertainty in the table below is broken down by related risk class rather than by product. The
possible impact of a change of unobservable inputs in the fair value of financial instruments where
unobservable inputs are significant to the valuation is as follows:
Sensitivity analysis of Level 3 instruments
Positive fair\u00a0value
movements from
using reasonable
possible alternatives
Negative fair\u00a0value
movements from
using reasonable
possible alternatives
in EUR million
2023
2022
2023
2022
Equity (equity derivatives, structured notes)
18
12
-9
-6
Interest rates (Rates derivatives, FX derivatives)
3
22
0
-14
Credit (Debt securities, Loans, structured notes, credit derivatives)
45
32
-54
-28
Loans and advances
3
-17
-32
69
65
-80
-80
i) Financial instruments not measured at fair value
The following table presents the estimated fair values of the financial instruments not measured at fair
value in the statement of financial position.
Methods applied in determining fair values of financial assets and liabilities (carried at amortised cost)
Carrying Amount
Carrying amount
presented as fair value1
Level 1
Level 2
Level 3
Total fair value
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Loans and advances to banks
16,709
35,104
2,722
2,859
11,430
29,459
2,511
2,786
16,662
35,104
Loans and advances to customers
642,402
635,506
15,681
19,095
14,602
15,264
593,098
575,805
623,381
610,164
Securities at amortised cost
48,313
48,160
40,041
39,787
4,277
3,160
1,693
1,406
46,010
44,353
707,424
718,770
18,403
21,954
40,041
39,788
30,308
47,883
597,302
579,996
686,053
689,621
Financial liabilities
Deposits from banks
23,257
56,632
3,764
3,696
15,066
48,524
3,968
3,954
22,799
56,174
Customer deposits
650,267
640,770
556,060
589,851
52,486
35,123
41,063
15,331
649,609
640,306
Debt securities in issue
124,670
95,918
62,197
43,352
42,606
35,642
20,450
17,796
125,253
96,790
Subordinated loans
15,401
15,786
15,050
7,843
311
7,705
15,361
15,548
813,594
809,106
559,824
593,547
77,248
51,194
110,469
126,995
65,482
37,082
813,022
808,818
1 In accordance with IFRS and for the purpose of this disclosure, the carrying amount of financial instruments with an immediate on demand feature is presented as fair value
The aggregation of the fair values presented above does not represent, and should not be construed as
representing, the underlying value of ING Group. These fair values were calculated for disclosure purposes
only. The carrying amount of financial instruments presented in the above table includes, when applicable,
the fair value hedge adjustment, this explains why (for these cases) the carrying amount approximates fair
value.
Loans and advances to banks
For short term receivables from banks carrying amounts represent a reasonable estimate of the fair value.
The fair value of long term receivables from banks is estimated by discounting expected future cash flows
using a discount rate based on specific available market data, such as interest rates and appropriate
spreads that reflects current credit risk or quoted bonds.
Loans and advances to customers
For short term loans carrying amounts represent a reasonable estimate of the fair value. The fair value of
long term loans is estimated by discounting expected future cash flows using a discount rate that reflects
current credit risk, current interest rates, and other current market conditions where applicable. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour. Loans with similar
characteristics are aggregated for calculation purposes.
Securities at amortised cost
Where available, fair values for debt securities are generally based on quoted market prices. Quoted market
prices are obtained from an exchange market, dealer, broker, industry group, pricing service, or regulatory
service. The quoted prices from non-exchange sources are reviewed on their tradability of market prices. If
quoted prices in an active market are not available, fair value is based on an analysis of available market
inputs, which includes consensus prices obtained from one or more pricing services. Furthermore, fair values
are determined by valuation techniques discounting expected future cash flows using market interest rate
curves, referenced credit spreads, maturity of the investment, and estimated prepayment rates where
applicable.
Deposits from banks
For short term payables to banks carrying amounts represent a reasonable estimate of the fair value. The
fair value of long term payables to banks is estimated by discounting expected future cash flows using a
discount rate based on available market interest rates and appropriate spreads that reflects ING\u2019s own
credit risk.
Customer deposits
In the current interest rate environment there is significant embedded value in our on-demand deposits,
therefore providing a natural hedge against the impact from rising rates on financial assets. However, for
the purpose of this disclosure and in accordance with IFRS, the carrying amounts of deposits with an
immediate on demand feature is presented as fair value.
The fair value of deposits with fixed contractual terms has been estimated based on discounting future cash
flows using the interest rates currently applicable to deposits of similar maturities.
Debt securities in issue
The fair value of debt securities in issue is generally based on quoted market prices, or if not available, on
estimated prices by discounting expected future cash flows using a current market interest rate and credit
spreads applicable to the yield, credit quality and maturity.
Subordinated loans
The fair value of publicly traded subordinated loans are based on quoted market prices when available.
Where no quoted market prices are available, fair value of the subordinated loans is estimated using
discounted cash flows based on interest rates and credit spreads that apply to similar instruments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-711": { "value": "
(Reverse) repurchase transactions
Financial assets at fair value through profit or loss includes securities lending and sales and repurchase
transactions with securities. At ING, these types of transactions are recognised in several lines in the
statement of financial position depending on business model assessment and counterparty. Furthermore,
for repurchase agreements the gross amount of assets must be considered together with the gross amount
of related liabilities, which are presented separately on the statement of financial position since IFRS does
not always allow netting of these positions in the statement of financial position.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the consolidated statement of financial position as the counterparty
continues to be exposed to substantially all risks and rewards of the transferred security. Based on the
business model assessment and counterparty, the consideration paid to purchase securities is recognised as
Loans and advances to customers, Loans and advances to banks, financial assets mandatorily at FVPL or
Trading assets.
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the consolidated statement of financial position as ING Group continues to be
exposed to substantially all risks and rewards of the transferred financial asset. The counterparty liability is
designated and measured at FVPL if the asset is measured at FVPL. Otherwise, the counterparty liability is
included in Deposits from banks, Customer deposits or Trading.
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
information on transferred assets which were not derecognised.
ING Group\u2019s exposure to (reverse) repurchase transactions is included in the following lines in the statement
of financial position:
Exposure to (reverse) repurchase agreements
in EUR million
2023
2022
Reverse repurchase transactions
Loans and advances to banks
5,251
19,395
Loans and advances to customers
499
1,306
Trading assets, loans and receivables
12,121
9,732
Loans and receivables mandatorily measured at fair value through profit or loss
51,536
43,153
69,407
73,587
Repurchase transactions
Deposits from banks
2,064
3,809
Customer deposits
97
1
Trading liabilities, funds on deposit
10,337
5,715
Funds entrusted designated and measured at fair value through profit or loss
45,729
43,131
58,227
52,655
", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-713": { "value": "
Trading assets
Trading assets by type
in EUR million
2023
2022
Equity securities
15,412
11,737
Debt securities
6,907
4,189
Derivatives
25,680
30,841
Loans and receivables
12,231
10,103
60,229
56,870
Trading assets include assets that are closely related to servicing the needs of the clients of ING Group. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
Trading liabilities
Trading liabilities by type
in EUR million
2023
2022
Equity securities
1,156
935
Debt securities
2,492
1,291
Funds on deposit
10,443
5,993
Derivatives
23,129
30,869
37,220
39,088
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-712": { "value": "
Trading assets
Trading assets by type
in EUR million
2023
2022
Equity securities
15,412
11,737
Debt securities
6,907
4,189
Derivatives
25,680
30,841
Loans and receivables
12,231
10,103
60,229
56,870
Trading assets include assets that are closely related to servicing the needs of the clients of ING Group. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-714": { "value": "
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in
-\u00a0 fair value hedges
716
836
-\u00a0 cash flow hedges
440
814
-\u00a0 hedges of net investments in foreign operations
100
119
Other non-trading derivatives
771
2,124
2,028
3,893
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives designated
in hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign exchange currency swaps for
which no hedge accounting is applied.
Non-trading derivatives
Non-trading derivatives by type
in EUR million
2023
2022
Derivatives used in:
-\u00a0 fair value hedges
113
244
-\u00a0 cash flow hedges
458
1,275
-\u00a0 hedges of net investments in foreign operations
92
83
Other non-trading derivatives
1,356
1,446
2,019
3,048
Reference is made to Note 36 'Derivatives and hedge accounting' for information on derivatives used for
hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign currency swaps for hedging
purposes, but for which no hedge accounting is applied.
36\u00a0 Derivatives and hedge accounting
Use of derivatives
ING uses derivatives for economic hedging purposes to manage its asset and liability portfolios and
structural risk positions. The primary objective of ING\u2019s hedging activities is to manage the risks which arises
from structural imbalances in the duration and other profiles of its assets and liabilities. The objective of
economic hedging is to enter into positions with an opposite risk profile to an identified risk exposure to
reduce that exposure. The main risks which are being hedged are interest rate risk and foreign currency
exchange rate risk. These risks are primarily hedged with interest rate swaps, cross currency swaps and
foreign exchange forwards/swaps.
ING uses credit derivatives to manage its economic exposure to credit risk, including total return swaps and
credit default swaps, to sell or buy protection for credit risk exposures in the loan, investment, and trading
portfolios. Hedge accounting is not applied in relation to these credit derivatives.
Hedge accounting
Derivatives that qualify for hedge accounting under IFRS are classified and accounted for in accordance with
the nature of the instrument hedged and the type of IFRS hedge accounting model that is applicable. The
three models applicable under IFRS are: fair value hedge accounting, cash flow hedge accounting, and
hedge accounting of a net investment in a foreign operation. How and to what extent these models are
applied are described under the relevant headings below. The company\u2019s detailed accounting policies for
these three hedge models are set out in paragraph 1.5 \u2018Financial instruments\u2019 of Note 1 \u2018Basis of preparation
and material accounting policy information\u2019.
IBOR transition
Reference is made to the note 'Risk management/ IBOR Transition' for information on how ING is managing
the transition to alternative benchmark rates and ING's progress in completing the transition with respect to
derivatives in hedge accounting relationships.
TLTRO
In 2022, ING hedged the interest rate risk of the TLTRO-III funding with derivatives and designated this in a
fair value hedge relationship. In Q4 2022 the ECB changed the terms of the TLTRO-III, resulting in the
discontinuation of the hedging relationship. The fair value hedge adjustment was amortized to profit or loss
over the revised interest period (i.e. until the date the change in TLTRO-III terms became effective). The
impact of this was recorded in net interest income. Refer to Note 20 'Net interest income' for more details.
Fair value hedge accounting
ING\u2019s fair value hedges principally consist of interest rate swaps that are used to protect against changes in
the fair value of fixed-rate instruments due to movements in market interest rates. ING\u2019s approach to
manage market risk, including interest rate risk, is discussed in \u2018Risk management \u2013Market risk\u2019. ING\u2019s
exposure to interest rate risk is disclosed in paragraph \u2018Interest rate risk in banking book\u2019.
ING Group designates specific non-contractual risk components of hedged items. This is usually determined
by designating benchmark interest rates such as EURIBOR, SOFR, SONIA or TONAR, between others, because
the fair value of a fixed-rate instrument varies directly in response to changes in its benchmark interest rate.
By using derivative financial instruments to hedge exposures to changes in interest rates, ING also exposes
itself to credit risk of the derivative counterparty, which is not offset by the hedged item. ING minimises
counterparty credit risk in derivative instruments by clearing most of the derivatives through Central
Clearing Counterparties. In addition, ING only enters into transactions with high-quality counterparties and
requires posting collateral.
ING applies fair value hedge accounting on micro level in which one hedged item is hedged with one or
multiple hedging instruments as well as on macro level whereby a portfolio of items is hedged with multiple
hedging instruments. For these macro hedges of interest rate risk ING applies the EU carve-out. The EU
\u2018carve-out\u2019 for macro hedging enables a group of derivatives (or proportions) to be viewed in combination
and jointly designated as the hedging instrument and removes some of the limitations in fair value hedge
accounting relating to hedging core deposits and under-hedging strategies. In retail operations, exposure on
retail funding (savings and current accounts) and retail lending (mortgages) is initially offset. The remaining
exposure is hedged in a portfolio hedge, using the EU carve-out, in which a portion of the retail lending
portfolio and core deposits are designated as a hedged item for hedge accounting purposes.
For portfolio hedges the fair value is projected based on contractual terms and other variables including
prepayment expectations. These projected fair values of the portfolios form the basis for identifying the
notional amount subject to interest rate risk that is designated under fair value hedge accounting.
Micro fair value hedge accounting is mainly applied on issued debt securities and purchased debt
instruments for hedging interest rate risk.
Before fair value hedge accounting is applied, ING determines whether an economic relationship between
the hedged item and the hedging instrument exists based on an evaluation of the quantitative
characteristics of these items and the hedged risk that is supported by quantitative analysis. ING considers
whether the critical terms of the hedged item and hedging instrument closely align when assessing the
presence of an economic relationship. ING evaluates whether the fair value of the hedged item and the
hedging instrument respond similarly to similar risks. In addition, ING is mainly using regression analysis to
assess whether the hedging instrument is expected to be and has been highly effective in offsetting
changes in the fair value of the hedged item.
For the macro hedge on the loan portfolio ING follows a dynamic hedging strategy. This means that on
monthly basis, based on the new portfolio projection, the hedging relationship is renewed. From an
operational point of view, the existing hedging relationship is adjusted based on the new portfolio projection
and additional hedging instruments are added to the hedging relationship.
ING uses the following derivative financial instruments in a fair value hedge accounting relationship:
Gross carrying value of derivatives designated under fair value hedge accounting
Assets
Liabilities
Assets
Liabilities
in EUR million
2023
2023
2022
2022
As at 31\u00a0December
Hedging instrument on interest rate risk
\u2013 Interest rate swaps
32,612
27,350
40,346
32,482
\u2013 Other interest derivatives
284
34
395
39
The derivatives used for fair value hedge accounting are included in the statement of financial position line-
item \u2018Financial assets at fair value through profit or loss \u2013 Non-trading derivatives\u2019 for EUR 716 million (2022:
EUR 836 million) respectively \u2018Financial liabilities at fair value through profit or loss \u2013 Non-trading derivatives\u2019
EUR 113 million (2022: EUR 244 million). The difference between the gross carrying value as presented in the
table and the net carrying value as presented in the statement of financial position is due to offsetting with
other derivatives and collaterals paid or received.
For our main currencies the average fixed rate for interest rate swaps used in fair value hedge accounting
are 1.32% (2022: 0.54%) for EUR and 3.93% (2022: 3.86%) for USD.
The following table shows the net notional amount of derivatives designated in fair value hedging, split into
the maturity of the instruments. The net notional amounts presented in the table are a combination of
payer (-) and receiver (+) swaps.
Maturity derivatives designated in fair value hedging
in EUR million
As at 31\u00a0December 2023
Less
than 1
month
1 to 3
months
3 to 12
months
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
>5 years
Total
Hedging instrument on
interest rate risk
\u2013 Interest rate swaps
-670
253
8,381
4,156
3,193
-800
7,559
-58,679
-36,609
\u2013 Other interest derivatives
25
190
116
302
250
-144
974
1,712
As at 31\u00a0December 2022
Hedging instrument on
interest rate risk
- Interest rate swaps
-15
-3,184
-1,343
-677
6,864
5,396
8,204
-29,530
-14,284
\u2013 Other interest derivatives
-10
-55
-190
180
61
349
147
933
1,416
Gains and losses on derivatives designated under fair value hedge accounting are recognised in the
statement of profit or loss. The effective portion of the fair value change on the hedged item is also
recognised in the statement of profit or loss in 'Valuation results and net trading income'. As a result, only
the net accounting ineffectiveness has an impact on the net result.
Hedged items included in a fair value hedging relationship
Carrying amount of the hedged items
Accumulated amount of fair value hedge
adjustment on the hedged item included in
the carrying amount of the hedged item
Change in fair value of\u00a0
the hedged item for
measuring
ineffectiveness for the
period
Change in fair value
hedging instruments
for the period
Hedge ineffectiveness
recognised in the statement
of profit or loss gain (+) / loss
(-)
in EUR million
Assets
Liabilities
Assets
Liabilities
As at 31\u00a0December 2023
Interest rate risk
\u2013 Amounts due from banks
\u2013 Debt securities at fair value through other comprehensive income
31,224
n/a
1,224
\u2013 Loans at FVOCI
5
n/a
1
\u2013 Loans and advances to customers
78,787
-7,104
4,705
\u2013 Debt instruments at amortised cost
8,272
-205
234
\u2013 Debt securities in issue
70,280
-3,383
-2,680
\u2013 Subordinated loans
14,643
-834
-473
\u2013 Amounts due to banks
\u2013 Customer deposits and other funds on deposit
1,527
-17
-49
\u2013 Discontinued hedges
2,285
3
Total
118,287
86,450
-5,024
-4,230
2,962
-3,028
-66
As at 31\u00a0December 2022
Interest rate risk
\u2013 Amounts due from banks
\u2013 Debt securities at fair value through other comprehensive income
19,816
n/a
-2,798
\u2013 Loans at FVOCI
35
n/a
-4
\u2013 Loans and advances to customers
58,673
-12,112
-11,466
\u2013 Debt instruments at amortised cost
4,098
-448
-678
\u2013 Debt securities in issue
61,449
-6,122
7,658
\u2013 Subordinated loans
14,750
-1,344
1,470
\u2013 Amounts due to banks
483
\u2013 Customer deposits and other funds on deposit
1,435
-65
187
\u2013 Discontinued hedges
2,966
34
Total
82,623
77,633
-9,594
-7,497
-5,150
5,265
115
During 2023, the interest rate movements significantly affected the fair value changes of both the
derivatives and the hedged items designated in fair value hedges. However, no material hedging
relationship was discontinued as a result of the interest rate movements in 2023. Refer to note 22 \u2018Valuation
results and net trading income'.
In addition, the increase in hedged items is due to higher volumes in loans and advances and debt securities
designated in hedge accounting. Discontinued hedges further mainly relate to the transfer of derivatives
from UK based clearing houses to EU based clearing houses related to Brexit in 2020.
The main sources of ineffectiveness are:
\u2022 differences in maturities of the hedged item(s) and hedging instrument(s);
\u2022 different interest rate curves applied to discount the hedged item(s) and hedging instrument(s);
\u2022 differences in timing of cash flows of the hedged item(s) and hedging instrument(s).
Additionally, for portfolio (macro) fair value hedges of ING\u2019s fixed rate mortgage portfolio, ineffectiveness
also arises from the disparity between expected and actual prepayments (prepayment risk).
There were no other sources of significant ineffectiveness in these hedging relationships.
Cash flow hedge accounting
ING applies cash flow hedge accounting on micro and macro level. ING\u2019s cash flow hedges mainly consist of
interest rate swaps and cross-currency swaps that are used to protect against the exposure to variability in
future cash flows on non-trading assets and liabilities that bear interest at variable rates or are expected to
be refunded or reinvested in the future. The amounts and timing of future cash flows, representing both
principal and interest flows, are projected for each portfolio of financial assets and liabilities, based on
contractual terms and other variables including estimates of prepayments. These projected cash flows form
the basis for identifying the notional amount subject to interest rate risk or foreign currency exchange rate
risk that is designated under cash flow hedge accounting.
ING\u2019s approach to manage market risk, including interest rate risk and foreign currency exchange rate risk, is
discussed in \u2018Risk management \u2013 Credit risk and Market risk\u2019. ING determines the amount of the exposures
to which it applies hedge accounting by assessing the potential impact of changes in interest rates and
foreign currency exchange rates on the future cash flows from its floating-rate assets and liabilities. This
assessment is performed using analytical techniques.
As noted above for fair value hedges, by using derivative financial instruments to hedge exposures to
changes in interest rates and foreign currency exchange rates, ING exposes itself to credit risk of the
derivative counterparty, which is not offset by the hedged items. This exposure is managed similarly to that
for fair value hedges.
Gains and losses on the effective portions of derivatives designated under cash flow hedge accounting are
recognised in Other Comprehensive Income. Interest cash flows on these derivatives are recognised in the
statement of profit or loss in \u2018Net interest income\u2019 consistent with the manner in which the forecasted cash
flows affect net result. The gains and losses on ineffective portions of such derivatives are recognised
immediately in the statement of profit or loss in \u2018Valuation results and net trading income\u2019.
ING determines an economic relationship between the cash flows of the hedged item and the hedging
instrument based on an evaluation of the quantitative characteristics of these items and the hedged risk
that is supported by quantitative analysis. ING considers whether the critical terms of the hedged item and
hedging instrument closely align when assessing the presence of an economic relationship. ING evaluates
whether the cash flows of the hedged item and the hedging instrument respond similarly to the hedged
risk, such as the benchmark interest rate of foreign currency. In addition, a regression analysis is performed
to assess whether the hedging instrument is expected to be and has been highly effective in offsetting
changes in the fair value of the hedged item.
ING uses the following derivative financial instruments in a cash flow hedge accounting relationship:
Gross carrying value of derivatives used for cash flow hedge accounting
Assets
Liabilities
Assets
Liabilities
in EUR million
2023
2023
2022
2022
As at 31\u00a0December
Hedging instrument on interest rate risk
\u2013 Interest rate swaps
11,839
14,051
10,038
14,836
Hedging instrument on FX rate risk
\u2013 Cross currency swaps
324
39
Hedging instrument on combined interest and FX rate risk
\u2013 Cross currency interest rate swaps
57
428
168
The derivatives used for cash flow hedge accounting are included in the statement of financial position line-
item \u2018Financial assets at fair value through profit or loss \u2013 Non-trading derivatives\u2019 EUR 440 million (2022:
EUR 814 million) respectively \u2018Financial liabilities at fair value through profit or loss \u2013 Non-trading derivatives\u2019
EUR 458 million (2022: EUR 1,275 million). The difference between the gross carrying value as presented in
the table and the net carrying value as presented in the statement of financial position is due to offsetting
with other derivatives and collaterals paid or received.
For the main currencies the average fixed rate for interest rate swaps used in cash flow hedge accounting
are 1.26% (2022: 0.51%) for EUR, 4.09% (2022: 3.27%) for PLN, 4.33% (2022: 1.96%) for USD and 2.80%
(2022: 1.28%) for AUD. The average currency exchange rates for cross currency swaps used in cash flow
hedge accounting is for EUR/USD 0.98 (2022: 0.99) and for EUR/AUD 1.58 (2022: 1.58).
The following table shows the net notional amount of derivatives designated in cash flow hedging split into
the maturity of the instruments. The net notional amounts presented in the table are a combination of
payer (+) and receiver (-) swaps.
Maturity derivatives designated in cash flow hedging
in EUR million
As at 31\u00a0December 2023
Less
than 1
month
1 to 3
months
3 to 12
months
1 to 2
years
2 to 3
years
3 to\u00a0 4
years
4 to 5
years
>5
years
Total
Hedging instrument on interest rate
risk
\u2013 Interest rate swaps
-214
184
-8,557
-18,551
-6,636
-7,246
-4,896
-3,384
-49,300
Hedging instrument on FX rate risk
\u2013 Cross currency swaps
249
1,029
-932
503
-683
167
-693
-362
Hedging instrument on combined
interest and FX rate risk
\u2013 Cross currency interest rate swaps
-24
-1,232
-1,479
-2,736
As at 31\u00a0December 2022
Hedging instrument on interest rate
risk
\u2013 Interest rate swaps
-562
-935
-6,730
-12,464
-8,926
-8,115
-3,620
-8,947
-50,300
Hedging instrument on combined
interest and FX rate risk
\u2013 Cross currency interest rate swaps
-834
-1,535
-721
-2,140
-52
7
-48
-5,323
The following table shows the cash flow hedge accounting impact on profit or loss and comprehensive
income:
Cash flow hedging \u2013 impact of hedging instruments on the statement of profit or loss and other comprehensive income
in EUR million
Change in value of hedged item
used for calculating hedge
ineffectiveness for the period
Carrying amount cash flow
hedge reserve at the end of
the reporting period1
Amount reclassified from
CFH reserve to profit or
loss2
Cash flow is no longer
expected to occur
Change in value of
hedging instrument
recognised in OCI for the
period
Hedge ineffectiveness recognised
in the statement of profit or loss,
gain (+) / loss (-)
As at 31\u00a0December 2023
Interest rate risk on:
\u2013 Floating rate lending
-2,694
-3,545
590
\u2013 Floating rate borrowing
933
151
-497
\u2013 Other
\u2013 Discontinued hedges
194
-150
Total interest rate risk
-1,760
-3,200
-57
1,654
58
FX rate risk on:
\u2013 Floating rate lending
27
-42
-185
\u2013 Floating rate borrowing
-25
1
-33
\u2013 Other
\u2013 Discontinued hedges
7
-5
Total FX risk
2
-35
-223
200
-12
Combined interest and FX rate risk on:
\u2013 Floating rate lending
-20
78
-46
\u2013 Floating rate borrowing
1
\u2013 Other
\u2013 Discontinued hedges
-1
Total combined interest and FX risk
-20
78
-46
68
2
Total cash flow hedge
-1,778
-3,157
-325
1,922
48
As at 31\u00a0December 2022
Interest rate risk on:
\u2013 Floating rate lending
4,817
-5,460
395
\u2013 Floating rate borrowing
-775
923
-181
\u2013 Other
-5
-2
\u2013 Discontinued hedges
330
-263
Total interest rate risk
4,037
-4,210
-50
-4,279
21
Combined interest and FX rate risk on:
\u2013 Floating rate lending
-47
-16
-269
\u2013 Floating rate borrowing
-7
-4
14
\u2013 Other
4
-2
-3
\u2013 Discontinued hedges
4
-5
Total combined interest and FX risk
-51
-18
-263
296
-1
Total cash flow hedge
3,986
-4,227
-313
-3,982
20
1 The carrying amount is the gross amount, excluding tax adjustments
2. The amounts are reclassified to Net interest income - interest income and/or expense on non-trading derivatives (hedge accounting).
The increase in the carrying amount of the cash flow hedge reserve is driven by the interest rate
movements. No material hedging relationship was discontinued as a result of the interest rate movements
in 2023.
The main sources of ineffectiveness for cash flow hedges are:
\u2022 differences in timing of cash flows of the hedged item(s) and hedging instrument(s);
\u2022 mismatches in reset frequency between hedged item and hedging instrument.
The following table shows the movement of the cash flow hedge reserve:
Movement cash flow hedge reserve
in EUR million
2023
2022
Opening balance
-3,055
-153
Value changes recognised in OCI
1,922
-3,982
Amounts recycled to profit or loss
-325
-313
Income tax
-381
1,123
Exchange rate and other changes
-103
20
Adjustment for non controlling interest
-116
251
Movement for the year
997
-2,901
Ending balance
-2,058
-3,055
Hedges of net investments in foreign operations
A foreign currency exposure arises from a net investment in subsidiaries that have a different functional
currency from the presentation currency of ING. The risk arises from the fluctuation in spot exchange rates
between the functional currency of the subsidiaries and ING\u2019s presentation currency, which causes the
amount of the net investment to vary in the consolidated financial statements of ING. This risk may have a
significant impact on ING\u2019s financial statements. ING\u2019s policy is to hedge these exposures only when not
doing so it is expected to have a significant impact on the regulatory capital ratios of ING and its
subsidiaries.
ING\u2019s net investment hedges principally consist of derivatives (including currency forwards and swaps) and
non-derivative financial instruments such as foreign currency denominated funding. When the hedging
instrument is foreign currency denominated debt, ING assesses effectiveness by comparing past changes in
the carrying amount of the debt that are attributable to a change in the spot rate with past changes in the
investment in the foreign operation due to movement in the spot rate (the offset method).
Gains and losses on the effective portions of derivatives designated under net investment hedge accounting
are recognised in Other Comprehensive Income. The balance in equity is recognised in the statement of
profit or loss when the related foreign subsidiary is disposed. The gains and losses on ineffective portions are
recognised immediately in the statement of profit or loss in 'Valuation results and net trading income'.
ING has the following derivative financial instruments used for net investment hedging:
Gross carrying value of derivatives used for net investment hedging
Assets
Liabilities
Assets
Liabilities
in EUR million
2023
2023
2022
2022
As at 31\u00a0December
\u2013 FX forwards and Cross currency swaps
100
92
119
83
The derivatives used for net investment hedge accounting are included in the statement of financial position
line-item \u2018Financial assets at fair value through profit or loss \u2013 Non-trading derivatives\u2019 EUR 100 million
(2022: EUR 119 million) respectively \u2018Financial liabilities at fair value through profit or loss \u2013 Non trading
derivatives\u2019 EUR 92 million (2022: EUR 83 million).
For ING\u2019s main currencies the average exchange rates used in net investment hedge accounting for 2023
are EUR/USD 1.08 (2022: 1.06), EUR/PLN 4.54 (2022: 4.68), EUR/AUD 1.63 (2022: 1.52) and EUR/THB 37.65
(2022: 36.87).
The following table shows the notional amount of derivatives designated in net investment hedging split
into the maturity of the instruments:
Maturity derivatives designated in net investment hedging
in EUR million
As at 31\u00a0December 2023
Less
than 1
month
1 to 3
months
3 to 12
months
1 to 2
years
2 to 3
years
3 to\u00a0 4
years
4 to 5
years
>5
years
Total
\u2013 FX forwards and cross
currency swaps
-6,009
-4,576
-87
-10,672
As at 31\u00a0December 2022
\u2013 FX forwards and Cross
currency swaps
-6,164
-2,638
-97
-8,899
The effect of the net investment hedge accounting in the statement of profit or loss and other
comprehensive income is as follows:
Net investment hedge accounting \u2013 Impact on statement of profit or loss and other comprehensive
income
in EUR million
As at 31\u00a0December 2023
Change in
value of
hedged item
used for
calculating
hedge
ineffectiveness
for the period
Carrying
amount net
investment
hedge reserve
at the end of
the reporting
period 1
Hedged item
affected
statement of
profit or loss
Change in
value of
hedging
instrument
recognised in
OCI
Hedge
ineffectiveness
recognised in
the statement
of profit or loss,
gain(+) /
Loss(-)
Investment in foreign operations
-183
123
0
183
0
Discontinued hedges
0
263
0
0
0
As at 31\u00a0December 2022
Investment in foreign operations
0
-33
0
0
0
Discontinued hedges
0
304
-1
0
0
1 The carrying amount is the gross amount, excluding tax adjustments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-715": { "value": "
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
4,470
5,437
Loans and receivables
1,306
722
5,775
6,159
\u2018Financial assets designated at fair value through profit or loss\u2019 is partly economically hedged by credit
derivatives. The hedges do not meet the criteria for hedge accounting and the loans and debt securities are
recorded at fair value to avoid an accounting mismatch. The maximum credit exposure of the loans and
receivables and debt securities included in \u2018Financial assets designated at fair value through profit or loss\u2019
approximates its carrying value and amounts to EUR 5,775 million (2022: EUR 6,159 million). In 2023, the
change in fair value of these loans and debt securities amounts EUR -48 million (2022: EUR 357 million).\u00a0 \u00a0
ING has mitigated the credit risk exposure on some of the portfolio. The cost at initial recognition of the
financial assets designated at fair value through profit or loss that are economically hedged by credit
derivatives is EUR 3,181 million (31 December 2022: EUR 3,051 million and the cumulative change in fair
value attributable to changes in credit risk is EUR 150 million (31 December 2022: EUR 150 million).
The notional value of the related credit derivatives is EUR 3,679\u00a0million (2022: EUR 3,370 million).The
cumulative change in fair value of the credit derivatives since the financial assets were first designated,
amounts to EUR -119\u00a0million ( 2022: EUR 3\u00a0million) and the change for the current year is EUR -122\u00a0million
(2022: EUR 72\u00a0million).
The changes in fair value attributable to changes in credit risk have been calculated by determining the
changes in credit spread implicit in the fair value of loans and bonds issued by entities with similar credit
characteristics.
Designated at fair value through profit or loss
Designated at fair value through profit or loss by type
in EUR million
2023
2022
Debt securities
8,672
6,537
Funds entrusted
46,633
44,263
Subordinated liabilities
95
82
55,400
50,883
As at 31\u00a0December 2023, the change in the fair value of financial liabilities designated at fair value through
profit or loss attributable to changes in credit risk is EUR -34 million (2022: EUR\u00a0-75 million) on a cumulative
basis. This change has been determined as the amount of change in fair value of the financial liability that is
not attributable to changes in market conditions that gave rise to market risk (i.e. mainly interest rate risk
based on yield curves).
The amount that ING Group is contractually required to pay at maturity to the holders of financial liabilities
designated at fair value through profit or loss excluding repurchase agreements (part of funds entrusted) is
EUR 9,957 million (2022: EUR\u00a08,408 million).
Funds entrusted include mainly repurchase agreements. For more information on repurchase transactions
refer to Note 4 'Financial assets at fair value through profit or loss'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-716": { "value": "
Mandatorily at fair value through profit or loss
Mandatorily at fair value through profit or loss by type
in EUR million
2023
2022
Equity securities
179
203
Debt securities
894
821
Loans and receivables
53,911
45,820
54,983
46,844
Equity securities are individually insignificant for ING Group. For debt securities total exposure reference is
made to Note 6 'Debt securities' . Loans and receivables include mainly reverse repurchase agreements.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss (31 December 2023: EUR 538\u00a0million). For further information
on the change in accounting policies, reference is made to Note 1 'Basis of preparation and material
accounting policy information'.\u00a0
5\u00a0 Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income by type
in EUR million
2023
2022
Equity securities
1,885
1,887
Debt securities 1
38,281
29,095
Loans and advances 1
951
643
41,116
31,625
1 Debt securities include an amount of EUR -13 million (2022: EUR -21 million) and the Loans and advances includes EUR -8 million\u00a0
(2022: EUR -1 million) of Loan loss provisions.
Exposure to equity securities
Equity securities designated as at fair value through other comprehensive income
Carrying
value
Carrying
value
Dividend
income
Dividend
income
in EUR million
2023
2022
2023
2022
Investment in Bank of Beijing
1,590
1,614
98
111
Other Investments
295
273
7
38
1,885
1,887
105
149
As at 31\u00a0December 2023 ING holds approximately 13% (2022: 13%) of the shares of Bank of Beijing, a bank
listed on the stock exchange of Shanghai. Bank of Beijing stake is part of the Corporate Line segment. As per
regulatory requirements set by China Banking and Insurance Regulatory Commission, ING, as a shareholder
holding more than 5% or more of the shares, is required to supply additional capital when necessary. No
request for additional capital was received in 2023 (2022 : nil).
Changes in fair value through other comprehensive income
The following table presents changes in financial assets at fair value through other comprehensive income.
Changes in fair value through other comprehensive income financial assets
FVOCI equity
securities
FVOCI debt
instruments 1
Total
in EUR million
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
1,887
2,457
29,739
28,178
31,625
30,635
Additions
28
17
19,967
18,789
19,995
18,806
Amortisation
31
-18
31
-18
Transfers and reclassifications\u00a0
5
10
5
10
Changes in unrealised revaluations 2
68
-65
657
-3,230
725
-3,295
Impairments
-1
-1
Reversals of impairments
6
3
6
3
Disposals and redemptions
-2
-492
-11,912
-14,034
-11,913
-14,526
Exchange rate differences
-100
-39
751
49
651
10
Changes in the composition of the group and other
changes
-6
1
-6
1
Closing balance
1,885
1,887
39,231
29,739
41,116
31,625
1 Fair value through other comprehensive income debt instruments includes both debt securities and loans and advances.
2 Changes in unrealised revaluations of FVOCI debt instruments include changes on hedged items which are recognized in the
statement of profit or loss. Reference is made to Note 19 'Equity' for details on the changes in revaluation reserve.
FVOCI equity securities
Exchange rate differences of EUR -100\u00a0million (31 December 2022: EUR -39 million) are mainly related to the
stake in Bank of Beijing following the depreciation of CNY versus EUR. Furthermore in 2023, changes in
unrealised revaluations of equity securities are mainly related to the revaluation of the stake in Bank of
Beijing of EUR 77\u00a0million following changes in share price (31 December 2022: EUR -49\u00a0million).
In 2022, disposals of EUR 492 million mainly relate to the sale in the second quarter of HQLA eligible equity
instruments triggered by the changing interest rate environment and deteriorating market sentiment. This
portfolio was built up in early 2021 (additions in 2021: EUR 499 million) and was a relatively small part of the
HQLA portfolio. This was a diversified buy-and-hold portfolio aimed at generating stable dividend income
stream.
FVOCI debt instruments
In 2022, interest rates in both short and longer tenors increased significantly which resulted in changes in
unrealised revaluations of debt securities of EUR -3,230 million. During 2023 interest rates decreased
resulting in unrealised revaluations of EUR 657\u00a0million.
Reference is made to Note 6 'Debt securities' for details on ING Group\u2019s total exposure to debt securities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-717": { "value": "
7\u00a0 Loans and advances to customers
Loans and advances to customers by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Loans and advances to public authorities
1,070
837
13,314
11,840
14,384
12,677
Residential mortgages
110,475
107,952
214,120
205,511
324,596
313,463
Other personal lending
5,036
5,835
31,535
30,345
36,571
36,180
Corporate Lending
62,677
68,077
209,795
211,092
272,472
279,169
179,258
182,701
468,764
458,789
648,023
641,490
Loan loss provisions
-830
-993
-4,791
-4,990
-5,621
-5,984
178,429
181,708
463,973
453,798
642,402
635,506
For details on credit quality and loan loss provisioning, refer to \u2018Risk management \u2013 Credit risk\u2019 paragraphs
\u2018Credit quality\u2019 and 'Loan loss provisioning'.
As at 31\u00a0December 2023 EUR 642,209 million (2022: EUR 635,310 million) of loans and advances to
customers are non-subordinated.
Loans and advances to customers and to banks include finance lease receivables and are detailed as
follows:
Finance lease receivables 1
in EUR million
2023
2022
Maturities of gross investment in finance lease receivables
-\u00a0 within 1 year
3,827
3,452
-\u00a0 between 1-2 years
2,742
2,463
-\u00a0 between 2-3 years
2,133
1,870
-\u00a0 between 3-4 years
1,475
1,294
-\u00a0 between 4-5 years
875
747
-\u00a0 more than 5 years
1,451
1,423
12,503
11,251
Unearned future finance income on finance leases
-1,040
-792
Net investment in finance leases
11,463
10,459
Included in Loans and advances to banks
5
6
Included in Loans and advances to customers
11,459
10,453
11,463
10,459
1 The total loan loss provision of EUR 160 million (2022: EUR\u00a0160 million) for finance lease receivables is classified into the following loan
loss provision stages: Stage 1: EUR 6 million (2022: EUR 9 million), Stage 2: EUR 14 million (2022: EUR 28 million) and Stage 3: EUR 139
million (2022: EUR 123 million).
The finance lease receivables mainly relate to the financing of equipment and real estate and are mainly
part of corporate lending. To a lesser extent, the finance lease receivables relate to real estate for third
parties, where ING is the lessor. Interest income in 2023 on finance lease receivables amounts to EUR 429
million (2022: EUR 292 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-718": { "value": "
Finance lease receivables 1
in EUR million
2023
2022
Maturities of gross investment in finance lease receivables
-\u00a0 within 1 year
3,827
3,452
-\u00a0 between 1-2 years
2,742
2,463
-\u00a0 between 2-3 years
2,133
1,870
-\u00a0 between 3-4 years
1,475
1,294
-\u00a0 between 4-5 years
875
747
-\u00a0 more than 5 years
1,451
1,423
12,503
11,251
Unearned future finance income on finance leases
-1,040
-792
Net investment in finance leases
11,463
10,459
Included in Loans and advances to banks
5
6
Included in Loans and advances to customers
11,459
10,453
11,463
10,459
1 The total loan loss provision of EUR 160 million (2022: EUR\u00a0160 million) for finance lease receivables is classified into the following loan
loss provision stages: Stage 1: EUR 6 million (2022: EUR 9 million), Stage 2: EUR 14 million (2022: EUR 28 million) and Stage 3: EUR 139
million (2022: EUR 123 million).
The finance lease receivables mainly relate to the financing of equipment and real estate and are mainly
part of corporate lending. To a lesser extent, the finance lease receivables relate to real estate for third
parties, where ING is the lessor. Interest income in 2023 on finance lease receivables amounts to EUR 429
million (2022: EUR 292 million).
9\u00a0 Property and equipment
Property and equipment by type
in EUR million
2023
2022
Property in own use
616
681
Equipment:
- Data processing equipment
213
213
- Other equipment
492
476
Right- of- use assets:
- ROU property
972
1,000
- ROU cars
97
64
- ROU other leases
9
12
2,399
2,446
Changes in property and equipment
Property in own use
Equipment
Right-of-use assets
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
681
702
688
699
1,076
1,113
2,446
2,515
Additions
4
2
241
229
279
173
525
404
Transfers
-1
-1
-4
-1
-4
-4
-9
-5
Depreciation
-12
-13
-204
-220
-246
-252
-461
-485
Impairments1
-19
-9
-10
-16
-12
-9
-41
-35
Reversals of impairments1
10
16
10
16
Remeasurements
4
15
9
67
13
81
Disposals
-47
-67
-10
-15
-20
-15
-78
-98
Exchange rate differences
-4
36
4
13
-4
3
-5
52
Closing balance
616
681
705
688
1,078
1,076
2,399
2,446
Cost price
753
847
3,140
3,554
1,851
1,680
5,744
6,081
Accumulated depreciation
-305
-362
-2,430
-2,853
-904
-714
-3,639
-3,929
Accumulated impairments
-99
-107
-6
-12
-32
-21
-136
-140
Accumulated revaluation surplus
267
304
267
304
Accumulated remeasurement
163
130
163
130
Net carrying value
616
681
705
688
1,078
1,076
2,399
2,446
1 (Reversals of) impairments of property and equipment are presented as Other operating expenses in the statement of Profit or Loss.
ING considers valuations from third-party experts in determining the fair values of property in own use. The
vast majority of the land and buildings are appraised during 2023. Property in own use purchase costs
amounted to EUR 753 million (2022: EUR\u00a0847\u00a0million). Cost or the purchase price less accumulated
depreciation and impairments would have been EUR 350 million (2022: EUR 368 million) had property in
own use been valued at cost instead of at fair value.
The reported impairment losses of EUR -41 million (2022: EUR -35 million) mainly result from changes in the
post-pandemic way of working through downscaling of physical office spaces and closure of branches for
commercial reasons.
16\u00a0 Other liabilities
Other liabilities by type
In EUR million
2023
2022
Net defined benefit liability
164
139
Other post-employment benefits
30
29
Other staff-related liabilities
719
633
Share-based payment plan liabilities
0
3
Other taxation and social security contributions
641
365
Rents received in advance
14
30
Costs payable
2,170
2,016
Amounts to be settled
6,509
6,715
Lease liabilities
1,162
1,174
Other
2,258
2,543
13,667
13,646
Disclosures in respect of Net defined benefit liabilities are provided in Note 33 'Pensions and other post-
employment benefits'.
Other staff-related liabilities includes vacation leave provisions, jubilee provisions, disability/illness provisions
and liabilities related with variable compensations.
As of 2023, ING decided to no longer issue shares in order to fund obligations arising from share-based
employee incentive programmes but buy back shares from the market. Reference is made to Note 19
'Equity' for further information.
Amounts to be settled includes primarily transactions not settled at the balance sheet date. The nature of
these transactions is short term and have settled after the closing date of the balance sheet.
Lease liabilities relate to right-of-use assets. Disclosures in respect to right-of-use assets are provided in
Note 9 'Property and equipment'. The total cash outflow for leases in 2023 was EUR 291\u00a0million (2022: EUR
296\u00a0million).
The line other relates mainly to amounts payable to customers which also includes the remaining EUR
538\u00a0million (2022: EUR 297\u00a0million) obligation to the shareholders regarding the share buyback programme.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-721": { "value": "
8\u00a0 Investment in associates and joint ventures
Investments in associates and joint ventures
in EUR million
2023
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
976
1,128
46,666
40,776
1,386
943
Other investments in associates and
joint ventures
381
1,509
Investments in associates and joint ventures
in EUR million
2022
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
849
1,109
49,506
43,677
1,303
957
Other investments in associates and
joint ventures
391
1,500
TMBThanachart Bank Public Company Limited
ING Group has a 23% investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), a bank
listed on the Stock Exchange of Thailand. TTB is providing products and services to Wholesale, Small and
Medium Enterprise (SME), and Retail customers. TTB is accounted for as an investment in associate based on
the size of ING shareholding and representation on the Board. TTB is part of the Corporate Line segment.
Other investments in associates and joint ventures
Included in Other investments in associates and joint ventures are mainly financial services and (non)
financial technology funds or vehicles operating predominantly in Europe, and represents a number of
associates and joint ventures that are individually not significant to ING Group.
Significant influence for associates in which the interest held is below 20%, is based on the combination of
ING Group\u2019s financial interest and other arrangements, such as participation in the Board of Directors.
The associates and joint ventures of ING are subject to legal and regulatory restrictions regarding the
amount of dividends they can pay to ING. These restrictions are for example dependent on the laws in the
country of incorporation for declaring dividends or as a result of minimum capital requirements that are
imposed by industry regulators in the countries in which the associates and joint ventures operate.
In addition, the associates and joint ventures also consider other factors in determining the appropriate
levels of equity needed. These factors and limitations include, but are not limited to, rating agency and
regulatory views, which can change over time.
Changes in Investments in associates and joint ventures
in EUR million
2023
2022
Opening balance as at 1 January
1,500
1,587
Additions
55
48
Revaluations
4
-8
Share of results
149
92
Dividends received
-74
-48
Disposals
-89
-10
Impairments
-5
-192
Exchange rate differences
-32
27
Other
4
Closing balance
1,509
1,500
Share of results from associates and joint ventures of EUR 149 million (2022: EUR 92 million) as included in
the table above is mainly attributable to results of TTB of EUR 107\u00a0million (2022: EUR 81 million).
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395\u00a0million (2022: EUR 395\u00a0million) have been recognised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-720": { "value": "
8\u00a0 Investment in associates and joint ventures
Investments in associates and joint ventures
in EUR million
2023
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
976
1,128
46,666
40,776
1,386
943
Other investments in associates and
joint ventures
381
1,509
Investments in associates and joint ventures
in EUR million
2022
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
849
1,109
49,506
43,677
1,303
957
Other investments in associates and
joint ventures
391
1,500
TMBThanachart Bank Public Company Limited
ING Group has a 23% investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), a bank
listed on the Stock Exchange of Thailand. TTB is providing products and services to Wholesale, Small and
Medium Enterprise (SME), and Retail customers. TTB is accounted for as an investment in associate based on
the size of ING shareholding and representation on the Board. TTB is part of the Corporate Line segment.
Other investments in associates and joint ventures
Included in Other investments in associates and joint ventures are mainly financial services and (non)
financial technology funds or vehicles operating predominantly in Europe, and represents a number of
associates and joint ventures that are individually not significant to ING Group.
Significant influence for associates in which the interest held is below 20%, is based on the combination of
ING Group\u2019s financial interest and other arrangements, such as participation in the Board of Directors.
The associates and joint ventures of ING are subject to legal and regulatory restrictions regarding the
amount of dividends they can pay to ING. These restrictions are for example dependent on the laws in the
country of incorporation for declaring dividends or as a result of minimum capital requirements that are
imposed by industry regulators in the countries in which the associates and joint ventures operate.
In addition, the associates and joint ventures also consider other factors in determining the appropriate
levels of equity needed. These factors and limitations include, but are not limited to, rating agency and
regulatory views, which can change over time.
Changes in Investments in associates and joint ventures
in EUR million
2023
2022
Opening balance as at 1 January
1,500
1,587
Additions
55
48
Revaluations
4
-8
Share of results
149
92
Dividends received
-74
-48
Disposals
-89
-10
Impairments
-5
-192
Exchange rate differences
-32
27
Other
4
Closing balance
1,509
1,500
Share of results from associates and joint ventures of EUR 149 million (2022: EUR 92 million) as included in
the table above is mainly attributable to results of TTB of EUR 107\u00a0million (2022: EUR 81 million).
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395\u00a0million (2022: EUR 395\u00a0million) have been recognised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-719": { "value": "
8\u00a0 Investment in associates and joint ventures
Investments in associates and joint ventures
in EUR million
2023
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
976
1,128
46,666
40,776
1,386
943
Other investments in associates and
joint ventures
381
1,509
Investments in associates and joint ventures
in EUR million
2022
Interest
held (%)
Fair value of
listed invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMBThanachart Bank Public Company
Limited
23%
849
1,109
49,506
43,677
1,303
957
Other investments in associates and
joint ventures
391
1,500
TMBThanachart Bank Public Company Limited
ING Group has a 23% investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), a bank
listed on the Stock Exchange of Thailand. TTB is providing products and services to Wholesale, Small and
Medium Enterprise (SME), and Retail customers. TTB is accounted for as an investment in associate based on
the size of ING shareholding and representation on the Board. TTB is part of the Corporate Line segment.
Other investments in associates and joint ventures
Included in Other investments in associates and joint ventures are mainly financial services and (non)
financial technology funds or vehicles operating predominantly in Europe, and represents a number of
associates and joint ventures that are individually not significant to ING Group.
Significant influence for associates in which the interest held is below 20%, is based on the combination of
ING Group\u2019s financial interest and other arrangements, such as participation in the Board of Directors.
The associates and joint ventures of ING are subject to legal and regulatory restrictions regarding the
amount of dividends they can pay to ING. These restrictions are for example dependent on the laws in the
country of incorporation for declaring dividends or as a result of minimum capital requirements that are
imposed by industry regulators in the countries in which the associates and joint ventures operate.
In addition, the associates and joint ventures also consider other factors in determining the appropriate
levels of equity needed. These factors and limitations include, but are not limited to, rating agency and
regulatory views, which can change over time.
Changes in Investments in associates and joint ventures
in EUR million
2023
2022
Opening balance as at 1 January
1,500
1,587
Additions
55
48
Revaluations
4
-8
Share of results
149
92
Dividends received
-74
-48
Disposals
-89
-10
Impairments
-5
-192
Exchange rate differences
-32
27
Other
4
Closing balance
1,509
1,500
Share of results from associates and joint ventures of EUR 149 million (2022: EUR 92 million) as included in
the table above is mainly attributable to results of TTB of EUR 107\u00a0million (2022: EUR 81 million).
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395\u00a0million (2022: EUR 395\u00a0million) have been recognised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-722": { "value": "
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395\u00a0million (2022: EUR 395\u00a0million) have been recognised.
The reported impairment losses of EUR -41 million (2022: EUR -35 million) mainly result from changes in the
post-pandemic way of working through downscaling of physical office spaces and closure of branches for
commercial reasons.
Impairment testing
Goodwill is tested for impairment annually in the fourth quarter by comparing the recoverable amount of
each goodwill-carrying CGU with its carrying amount. The key assumptions used in the calculation of the
recoverable amounts are included in the table above. Furthermore, ING Group tests goodwill whenever a
triggering event is identified.
At the annual impairment test in the fourth quarter, the recoverable amount exceeds the carrying value of
the CGUs as at 31 December 2023 and therefore no impairment is required (31 December 2022: EUR 32
million for T\u00fcrkiye CGU).
Methodology
In line with IFRS, the recoverable amount is determined as the higher of the fair value less costs of disposal
and Value in Use (VIU). The VIU calculation is based on a Dividend Discount model using three year
management approved plans, updated for expected changes in the macroeconomic environment. When
estimating the VIU of a CGU, local conditions and requirements determine the capital requirements,
discount rates, and terminal growth rates. These local conditions and requirements determine the ability to
upstream excess capital and profits to ING Group. The discount rate calculation includes other inputs such as
equity market premium, country risk premium, and long term inflation which are based on market sources
and management\u2019s judgement. The long term growth rate is based on the long term inflation rate obtained
from market sources. The impacts of climate risk are included to the extent that they are observable in
discount rates and assets prices.
Sensitivity of key assumptions
Key assumptions in the goodwill impairment test model are the projected locally available cash flows (based
on local capital requirements and projected profits), discount rates (cost of equity), and long-term growth
rates.
The recoverable amounts of the CGUs are sensitive to the above key assumptions. A decrease in the
available cash flows of 10%, an increase in the discount rate of 1 percent point or a reduction of future
growth rate to zero are considered reasonably possible changes in key assumptions. If the aforementioned
changes occur to one of the above key assumptions holding the other key assumptions constant, goodwill
of the remaining CGUs will continue to be recoverable.
Software is reviewed for indicators of impairment. Irrespective of whether there is an indication of
impairment, software under development is tested annually for impairment. In 2023, individually
immaterial items were impaired for an amount of EUR 5\u00a0million (31 December 2022: 22 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-723": { "value": "
9\u00a0 Property and equipment
Property and equipment by type
in EUR million
2023
2022
Property in own use
616
681
Equipment:
- Data processing equipment
213
213
- Other equipment
492
476
Right- of- use assets:
- ROU property
972
1,000
- ROU cars
97
64
- ROU other leases
9
12
2,399
2,446
Changes in property and equipment
Property in own use
Equipment
Right-of-use assets
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
681
702
688
699
1,076
1,113
2,446
2,515
Additions
4
2
241
229
279
173
525
404
Transfers
-1
-1
-4
-1
-4
-4
-9
-5
Depreciation
-12
-13
-204
-220
-246
-252
-461
-485
Impairments1
-19
-9
-10
-16
-12
-9
-41
-35
Reversals of impairments1
10
16
10
16
Remeasurements
4
15
9
67
13
81
Disposals
-47
-67
-10
-15
-20
-15
-78
-98
Exchange rate differences
-4
36
4
13
-4
3
-5
52
Closing balance
616
681
705
688
1,078
1,076
2,399
2,446
Cost price
753
847
3,140
3,554
1,851
1,680
5,744
6,081
Accumulated depreciation
-305
-362
-2,430
-2,853
-904
-714
-3,639
-3,929
Accumulated impairments
-99
-107
-6
-12
-32
-21
-136
-140
Accumulated revaluation surplus
267
304
267
304
Accumulated remeasurement
163
130
163
130
Net carrying value
616
681
705
688
1,078
1,076
2,399
2,446
1 (Reversals of) impairments of property and equipment are presented as Other operating expenses in the statement of Profit or Loss.
ING considers valuations from third-party experts in determining the fair values of property in own use. The
vast majority of the land and buildings are appraised during 2023. Property in own use purchase costs
amounted to EUR 753 million (2022: EUR\u00a0847\u00a0million). Cost or the purchase price less accumulated
depreciation and impairments would have been EUR 350 million (2022: EUR 368 million) had property in
own use been valued at cost instead of at fair value.
The reported impairment losses of EUR -41 million (2022: EUR -35 million) mainly result from changes in the
post-pandemic way of working through downscaling of physical office spaces and closure of branches for
commercial reasons.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-725": { "value": "
10\u00a0 Intangible assets
Changes in intangible assets
Goodwill
Software
Other
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
464
472
636
682
2
2
1,102
1,156
Opening balance adjustment 1
25
25
Additions
64
54
64
54
Capitalised expenses
246
144
246
144
Amortisation
-213
-226
-213
-226
Impairments 1 2
-32
-5
-22
-5
-54
Exchange rate differences
5
-1
2
4
7
2
Disposals
-10
-3
-10
-3
Changes in the composition of the group and
other changes
8
3
1
8
3
Closing balance
469
464
727
636
2
2
1,198
1,102
Gross carrying amount
469
464
2,646
2,491
8
8
3,123
2,962
Accumulated amortisation
-1,876
-1,787
-4
-4
-1,879
-1,790
Accumulated impairments
-43
-69
-2
-2
-45
-70
Net carrying value
469
464
727
636
2
2
1,198
1,102
1 In 2022, the allocated goodwill to T\u00fcrkiye cash generating unit after first being adjusted for hyperinflation accounting for EUR 25
million, was fully impaired for the amount of EUR 32 million (based on discount rate 24.04% and terminal growth rate 10.40% as per
1 January 2022). T\u00fcrkiye is part of the Retail Other segment.
2 Impairments of intangible assets are presented within Other operating expenses in the statement of Profit or Loss.
Goodwill
Goodwill is allocated to groups of cash generating units (CGUs) as follows:
Goodwill allocation to group of CGUs
in EUR million
Method used for
recoverable amount
Discount rate
Terminal
growth rate
Goodwill
Goodwill
Group of CGU\u2019s
2023
2022
Retail Netherlands
Value in use
8.80%
2.20%
30
30
Retail Germany
Value in use
8.68%
2.00%
349
349
Retail Poland
Value in use
10.44%
2.40%
75
69
Retail Romania
Value in use
12.72%
2.60%
15
15
469
464
Impairment testing
Goodwill is tested for impairment annually in the fourth quarter by comparing the recoverable amount of
each goodwill-carrying CGU with its carrying amount. The key assumptions used in the calculation of the
recoverable amounts are included in the table above. Furthermore, ING Group tests goodwill whenever a
triggering event is identified.
At the annual impairment test in the fourth quarter, the recoverable amount exceeds the carrying value of
the CGUs as at 31 December 2023 and therefore no impairment is required (31 December 2022: EUR 32
million for T\u00fcrkiye CGU).
Methodology
In line with IFRS, the recoverable amount is determined as the higher of the fair value less costs of disposal
and Value in Use (VIU). The VIU calculation is based on a Dividend Discount model using three year
management approved plans, updated for expected changes in the macroeconomic environment. When
estimating the VIU of a CGU, local conditions and requirements determine the capital requirements,
discount rates, and terminal growth rates. These local conditions and requirements determine the ability to
upstream excess capital and profits to ING Group. The discount rate calculation includes other inputs such as
equity market premium, country risk premium, and long term inflation which are based on market sources
and management\u2019s judgement. The long term growth rate is based on the long term inflation rate obtained
from market sources. The impacts of climate risk are included to the extent that they are observable in
discount rates and assets prices.
Sensitivity of key assumptions
Key assumptions in the goodwill impairment test model are the projected locally available cash flows (based
on local capital requirements and projected profits), discount rates (cost of equity), and long-term growth
rates.
The recoverable amounts of the CGUs are sensitive to the above key assumptions. A decrease in the
available cash flows of 10%, an increase in the discount rate of 1 percent point or a reduction of future
growth rate to zero are considered reasonably possible changes in key assumptions. If the aforementioned
changes occur to one of the above key assumptions holding the other key assumptions constant, goodwill
of the remaining CGUs will continue to be recoverable.
Software
Software includes internally developed software amounting to EUR 628 million (2022: EUR 540 million).
Software is reviewed for indicators of impairment. Irrespective of whether there is an indication of
impairment, software under development is tested annually for impairment. In 2023, individually
immaterial items were impaired for an amount of EUR 5\u00a0million (31 December 2022: 22 million", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-724": { "value": "
10\u00a0 Intangible assets
Changes in intangible assets
Goodwill
Software
Other
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
464
472
636
682
2
2
1,102
1,156
Opening balance adjustment 1
25
25
Additions
64
54
64
54
Capitalised expenses
246
144
246
144
Amortisation
-213
-226
-213
-226
Impairments 1 2
-32
-5
-22
-5
-54
Exchange rate differences
5
-1
2
4
7
2
Disposals
-10
-3
-10
-3
Changes in the composition of the group and
other changes
8
3
1
8
3
Closing balance
469
464
727
636
2
2
1,198
1,102
Gross carrying amount
469
464
2,646
2,491
8
8
3,123
2,962
Accumulated amortisation
-1,876
-1,787
-4
-4
-1,879
-1,790
Accumulated impairments
-43
-69
-2
-2
-45
-70
Net carrying value
469
464
727
636
2
2
1,198
1,102
1 In 2022, the allocated goodwill to T\u00fcrkiye cash generating unit after first being adjusted for hyperinflation accounting for EUR 25
million, was fully impaired for the amount of EUR 32 million (based on discount rate 24.04% and terminal growth rate 10.40% as per
1 January 2022). T\u00fcrkiye is part of the Retail Other segment.
2 Impairments of intangible assets are presented within Other operating expenses in the statement of Profit or Loss.
Goodwill
Goodwill is allocated to groups of cash generating units (CGUs) as follows:
Goodwill allocation to group of CGUs
in EUR million
Method used for
recoverable amount
Discount rate
Terminal
growth rate
Goodwill
Goodwill
Group of CGU\u2019s
2023
2022
Retail Netherlands
Value in use
8.80%
2.20%
30
30
Retail Germany
Value in use
8.68%
2.00%
349
349
Retail Poland
Value in use
10.44%
2.40%
75
69
Retail Romania
Value in use
12.72%
2.60%
15
15
469
464
Impairment testing
Goodwill is tested for impairment annually in the fourth quarter by comparing the recoverable amount of
each goodwill-carrying CGU with its carrying amount. The key assumptions used in the calculation of the
recoverable amounts are included in the table above. Furthermore, ING Group tests goodwill whenever a
triggering event is identified.
At the annual impairment test in the fourth quarter, the recoverable amount exceeds the carrying value of
the CGUs as at 31 December 2023 and therefore no impairment is required (31 December 2022: EUR 32
million for T\u00fcrkiye CGU).
Methodology
In line with IFRS, the recoverable amount is determined as the higher of the fair value less costs of disposal
and Value in Use (VIU). The VIU calculation is based on a Dividend Discount model using three year
management approved plans, updated for expected changes in the macroeconomic environment. When
estimating the VIU of a CGU, local conditions and requirements determine the capital requirements,
discount rates, and terminal growth rates. These local conditions and requirements determine the ability to
upstream excess capital and profits to ING Group. The discount rate calculation includes other inputs such as
equity market premium, country risk premium, and long term inflation which are based on market sources
and management\u2019s judgement. The long term growth rate is based on the long term inflation rate obtained
from market sources. The impacts of climate risk are included to the extent that they are observable in
discount rates and assets prices.
Sensitivity of key assumptions
Key assumptions in the goodwill impairment test model are the projected locally available cash flows (based
on local capital requirements and projected profits), discount rates (cost of equity), and long-term growth
rates.
The recoverable amounts of the CGUs are sensitive to the above key assumptions. A decrease in the
available cash flows of 10%, an increase in the discount rate of 1 percent point or a reduction of future
growth rate to zero are considered reasonably possible changes in key assumptions. If the aforementioned
changes occur to one of the above key assumptions holding the other key assumptions constant, goodwill
of the remaining CGUs will continue to be recoverable.
Software
Software includes internally developed software amounting to EUR 628 million (2022: EUR 540 million).
Software is reviewed for indicators of impairment. Irrespective of whether there is an indication of
impairment, software under development is tested annually for impairment. In 2023, individually
immaterial items were impaired for an amount of EUR 5\u00a0million (31 December 2022: 22 million", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-726": { "value": "
Changes in intangible assets
Goodwill
Software
Other
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
464
472
636
682
2
2
1,102
1,156
Opening balance adjustment 1
25
25
Additions
64
54
64
54
Capitalised expenses
246
144
246
144
Amortisation
-213
-226
-213
-226
Impairments 1 2
-32
-5
-22
-5
-54
Exchange rate differences
5
-1
2
4
7
2
Disposals
-10
-3
-10
-3
Changes in the composition of the group and
other changes
8
3
1
8
3
Closing balance
469
464
727
636
2
2
1,198
1,102
Gross carrying amount
469
464
2,646
2,491
8
8
3,123
2,962
Accumulated amortisation
-1,876
-1,787
-4
-4
-1,879
-1,790
Accumulated impairments
-43
-69
-2
-2
-45
-70
Net carrying value
469
464
727
636
2
2
1,198
1,102
1 In 2022, the allocated goodwill to T\u00fcrkiye cash generating unit after first being adjusted for hyperinflation accounting for EUR 25
million, was fully impaired for the amount of EUR 32 million (based on discount rate 24.04% and terminal growth rate 10.40% as per
1 January 2022). T\u00fcrkiye is part of the Retail Other segment.
2 Impairments of intangible assets are presented within Other operating expenses in the statement of Profit or Loss.
Goodwill
Goodwill is allocated to groups of cash generating units (CGUs) as follows:
Goodwill allocation to group of CGUs
in EUR million
Method used for
recoverable amount
Discount rate
Terminal
growth rate
Goodwill
Goodwill
Group of CGU\u2019s
2023
2022
Retail Netherlands
Value in use
8.80%
2.20%
30
30
Retail Germany
Value in use
8.68%
2.00%
349
349
Retail Poland
Value in use
10.44%
2.40%
75
69
Retail Romania
Value in use
12.72%
2.60%
15
15
469
464
Impairment testing
Goodwill is tested for impairment annually in the fourth quarter by comparing the recoverable amount of
each goodwill-carrying CGU with its carrying amount. The key assumptions used in the calculation of the
recoverable amounts are included in the table above. Furthermore, ING Group tests goodwill whenever a
triggering event is identified.
At the annual impairment test in the fourth quarter, the recoverable amount exceeds the carrying value of
the CGUs as at 31 December 2023 and therefore no impairment is required (31 December 2022: EUR 32
million for T\u00fcrkiye CGU).
Methodology
In line with IFRS, the recoverable amount is determined as the higher of the fair value less costs of disposal
and Value in Use (VIU). The VIU calculation is based on a Dividend Discount model using three year
management approved plans, updated for expected changes in the macroeconomic environment. When
estimating the VIU of a CGU, local conditions and requirements determine the capital requirements,
discount rates, and terminal growth rates. These local conditions and requirements determine the ability to
upstream excess capital and profits to ING Group. The discount rate calculation includes other inputs such as
equity market premium, country risk premium, and long term inflation which are based on market sources
and management\u2019s judgement. The long term growth rate is based on the long term inflation rate obtained
from market sources. The impacts of climate risk are included to the extent that they are observable in
discount rates and assets prices.
Sensitivity of key assumptions
Key assumptions in the goodwill impairment test model are the projected locally available cash flows (based
on local capital requirements and projected profits), discount rates (cost of equity), and long-term growth
rates.
The recoverable amounts of the CGUs are sensitive to the above key assumptions. A decrease in the
available cash flows of 10%, an increase in the discount rate of 1 percent point or a reduction of future
growth rate to zero are considered reasonably possible changes in key assumptions. If the aforementioned
changes occur to one of the above key assumptions holding the other key assumptions constant, goodwill
of the remaining CGUs will continue to be recoverable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-727": { "value": "
11\u00a0 Other assets
Other assets by type
in EUR million
2023
2022
Net defined benefit assets
554
617
Investment properties
14
18
Property development and obtained from foreclosures
32
34
Prepayments
438
366
Accrued assets
523
551
Amounts to be settled
3,869
5,191
Other
1,687
2,073
7,117
8,850
Disclosures in respect of Net defined benefit assets are provided in Note 33 'Pensions and other post-
employment benefits' .
Amounts to be settled include primarily transactions not settled at the balance sheet date. The nature of
these transaction is short term and they are expected to settle shortly after the closing date of the balance
sheet.
Other relates to various receivables in the normal course of business, amongst others, short term
receivables relating to mortgage issuance and other amounts receivable from customers.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-728": { "value": "
12\u00a0 Deposits from banks
Deposits from banks by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Non-interest bearing
3
86
174
315
177
400
Interest bearing
7,803
32,858
15,277
23,374
23,080
56,232
7,806
32,943
15,451
23,689
23,257
56,632
Deposits from banks includes non-subordinated deposits and reverse repurchase transactions, for more
information on reverse repurchase transaction refer to Note 4 'Financial assets at fair value through profit or
loss'.
Deposits from banks includes ING\u2019s participation in the Targeted Longer-Term Refinancing Operations
(TLTRO) of EUR 6.0 billion (2022: EUR 36.0 billion). In 2023, EUR 30.0 billion of ING's TLTRO III participation was
repaid.
For the details of the applicable rates and impact on net interest income reference is made to Note 20 'Net
interest income'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-729": { "value": "
13\u00a0 Customer deposits
Customer deposits 1
in EUR million
2023
2022
Current accounts / Overnight deposits
221,773
260,350
Savings accounts
334,287
329,501
Time deposits
92,154
48,524
Other
2,053
2,395
650,267
640,770
1 ING changed the presentation of customer deposits as of 2023. The comparative figure for 2022 has been updated accordingly.
Current accounts / Overnight deposits, Saving accounts and Time deposits include balances with individuals,
respectively EUR 107,711\u00a0million (2022: EUR 124,067\u00a0million), EUR 305,734\u00a0million (2022: EUR
304,276\u00a0million) and EUR 46,762\u00a0million (2022: EUR 16,729\u00a0million).
Customer deposits by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2023
2022
2023
2022
Non-interest bearing
239
2,332
25,316
24,229
25,556
26,561
Interest bearing 1
232,539
231,885
392,172
382,324
624,711
614,209
232,779
234,217
417,488
406,552
650,267
640,770
1 Interest bearing includes current accounts which are not remunerated, however ING holds the contractual right to revise.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-730": { "value": "
Trading liabilities
Trading liabilities by type
in EUR million
2023
2022
Equity securities
1,156
935
Debt securities
2,492
1,291
Funds on deposit
10,443
5,993
Derivatives
23,129
30,869
37,220
39,088
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-731": { "value": "
15\u00a0 Provisions
Provisions by type 1
in EUR million
2023
2022
Reorganisation provisions
231
418
Litigation provisions
193
150
Other provisions
355
455
779
1,022
Loan loss provisions for guarantees
142
29
920
1,052
1 In 2023, the table was updated to present the IFRS 9 loan loss provisions for guarantees separately. The comparatives for 2022
have been updated accordingly.
Changes in provisions
Reorganisation
Litigation
Other Provisions 2
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
418
421
150
132
455
407
1,022
961
Additions 1
207
217
78
59
39
230
325
506
Interest
-2
-2
Releases 1
-34
-46
-26
-8
-22
-166
-82
-221
Utilised
-356
-170
-23
-33
-11
-15
-389
-218
Exchange rate differences
-1
1
-3
-4
-1
Other changes
-3
-4
13
-104
-94
-3
Closing balance
231
418
193
150
355
455
779
1,022
1 Additions to provisions and unused amounts released are presented in Note 26 'Other operating expenses' in the Statement of Profit\u00a0
or Loss.
2 In 2023, the table was updated to exclude the IFRS 9 loan loss provisions for guarantees. The comparatives for 2022 have been
updated accordingly.
As at 31\u00a0December 2023, amounts expected to be settled within 12 months in provisions amount to EUR
720 million (2022: EUR 837 million). The amounts included are based on best estimates with regard to
amounts and timing of cash flows required to settle the obligation.
Reorganisation provisions
In 2023, the additions to the reorganisation provisions mainly relate to restructuring activities in Belgium,
Poland and the Netherlands. The additions in 2022 mainly relate to the discontinuation of retail banking
activities in France and the restructuring of the branch network and retail advice organisation in the
Netherlands, as well as to restructuring activities in Belgium.
These initiatives are implemented over a period of several years and the estimate of the reorganisation
provisions is inherently uncertain.
Litigation provisions
Reference is made to Note 42 'Legal proceedings' for developments in litigation provisions.
Other provisions
In 2023 ING Group voluntarily changed its accounting policy for non-financial guarantees that are subject to
contractual indemnification rights from IAS 37 principles to loan commitment accounting under IFRS 9. The
change from IAS 37 to IFRS 9 resulted in derecognition of the existing IAS 37 provision of EUR 109 million as
per 1 January 2023 and recognition of a provision for Expected credit losses of EUR 151 million for non-
financial guarantees as per 1 January 2023 (EUR 42 million pre-tax impact on Equity at the beginning of
2023). This change is included in Other changes in the movement table.
For details and changes on loan loss provisioning, refer to \u2018Risk management \u2013 Credit risk\u2019 paragraph 'Loan
loss provisioning'. For details on the IFRS change, refer to Note 1.3.1 'Changes in IFRS effective in 2023'.
In 2022, the additions and releases include EUR 138 million and EUR 141 million respectively related to IAS
37 off balance facilities that in 2023 are included in IFRS 9 loan loss provisions.
The additions to the Other provisions in 2022 include EUR 75 million which relates to the provision for the
compensation of Dutch retail customers for past interest charges that did not sufficiently track market rates
and largely reflects the impact of interest-on-interest compensation. This is in addition to the provision of
EUR 180 million recognised in 2021.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-733": { "value": "
16\u00a0 Other liabilities
Other liabilities by type
In EUR million
2023
2022
Net defined benefit liability
164
139
Other post-employment benefits
30
29
Other staff-related liabilities
719
633
Share-based payment plan liabilities
0
3
Other taxation and social security contributions
641
365
Rents received in advance
14
30
Costs payable
2,170
2,016
Amounts to be settled
6,509
6,715
Lease liabilities
1,162
1,174
Other
2,258
2,543
13,667
13,646
Disclosures in respect of Net defined benefit liabilities are provided in Note 33 'Pensions and other post-
employment benefits'.
Other staff-related liabilities includes vacation leave provisions, jubilee provisions, disability/illness provisions
and liabilities related with variable compensations.
As of 2023, ING decided to no longer issue shares in order to fund obligations arising from share-based
employee incentive programmes but buy back shares from the market. Reference is made to Note 19
'Equity' for further information.
Amounts to be settled includes primarily transactions not settled at the balance sheet date. The nature of
these transactions is short term and have settled after the closing date of the balance sheet.
Lease liabilities relate to right-of-use assets. Disclosures in respect to right-of-use assets are provided in
Note 9 'Property and equipment'. The total cash outflow for leases in 2023 was EUR 291\u00a0million (2022: EUR
296\u00a0million).
The line other relates mainly to amounts payable to customers which also includes the remaining EUR
538\u00a0million (2022: EUR 297\u00a0million) obligation to the shareholders regarding the share buyback programme.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-732": { "value": "
16\u00a0 Other liabilities
Other liabilities by type
In EUR million
2023
2022
Net defined benefit liability
164
139
Other post-employment benefits
30
29
Other staff-related liabilities
719
633
Share-based payment plan liabilities
0
3
Other taxation and social security contributions
641
365
Rents received in advance
14
30
Costs payable
2,170
2,016
Amounts to be settled
6,509
6,715
Lease liabilities
1,162
1,174
Other
2,258
2,543
13,667
13,646
Disclosures in respect of Net defined benefit liabilities are provided in Note 33 'Pensions and other post-
employment benefits'.
Other staff-related liabilities includes vacation leave provisions, jubilee provisions, disability/illness provisions
and liabilities related with variable compensations.
As of 2023, ING decided to no longer issue shares in order to fund obligations arising from share-based
employee incentive programmes but buy back shares from the market. Reference is made to Note 19
'Equity' for further information.
Amounts to be settled includes primarily transactions not settled at the balance sheet date. The nature of
these transactions is short term and have settled after the closing date of the balance sheet.
Lease liabilities relate to right-of-use assets. Disclosures in respect to right-of-use assets are provided in
Note 9 'Property and equipment'. The total cash outflow for leases in 2023 was EUR 291\u00a0million (2022: EUR
296\u00a0million).
The line other relates mainly to amounts payable to customers which also includes the remaining EUR
538\u00a0million (2022: EUR 297\u00a0million) obligation to the shareholders regarding the share buyback programme.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-734": { "value": "
17\u00a0 Debt securities in issue
Debt securities in issue relates to debentures and other issued debt securities with either fixed interest rates
or interest rates based on floating interest rate levels, such as certificates of deposit and accepted bills
issued by ING Group, except for subordinated items. Debt securities in issue does not include debt securities
presented as Financial liabilities at fair value through profit or loss. ING Group does not have debt securities
that are issued on terms other than those available in the normal course of business.
Debt securities in issue \u2013 maturities
In EUR million
2023
2022
Fixed rate debt securities
Within 1 year
31,255
21,176
More than 1 year but less than 2 years
7,855
2,777
More than 2 years but less than 3 years
13,361
7,897
More than 3 years but less than 4 years
10,265
10,067
More than 4 years but less than 5 years
11,924
8,039
More than 5 years
26,987
28,582
Total fixed rate debt securities
101,645
78,539
Floating rate debt securities
Within 1 year
17,871
15,286
More than 1 year but less than 2 years
226
307
More than 2 years but less than 3 years
2,624
256
More than 3 years but less than 4 years
880
958
More than 4 years but less than 5 years
0
467
More than 5 years
1,423
105
Total floating rate debt securities
23,025
17,379
Total debt securities
124,670
95,918
Reference is made to Note 32 'Changes in liabilities arising from financing activities' for further information
on issuances, redemptions and non-cash movements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-735": { "value": "
18\u00a0 Subordinated loans
Subordinated loans
In EUR million
2023
2022
Subordinated loans
15,401
15,786
Subordinated loans are bonds issued by ING Groep N.V. and ING Bank N.V. to raise Tier 1 and Tier 2 (CRD IV
eligible) capital. Under IFRS these bonds are classified as liabilities and for regulatory purposes, they are
considered capital.\u00a0
In 2023 ING Groep N.V. issued in February EUR 500 million 5.00% Fixed Rate Subordinated Tier 2 Notes, GBP
750 million\u00a0 6.25% Fixed Rate Subordinated Tier 2 Notes and USD 1 billion 7.50% Perpetual AT1 Contingent
Convertible Capital Securities.
In 2023 ING Groep N.V. redeemed in March\u00a0 USD 1,250 million 4.70% Fixed Subordinated Tier 2 notes, in April\u00a0
EUR 1 billion 3.00% Fixed Subordinated Tier 2 notes on the first call dates.
In 2023 ING Bank N.V. redeemed in September USD 810 million 5.80% Fixed Rate Subordinated Tier 2 notes.
Reference is made to Note 32 'Changes in liabilities arising from financing activities' for further information
on issuances and redemptions.
The average interest rate on subordinated loans is 4.44% (2022: 4.01%). The interest expense during the
year 2023 was EUR 708 million (2022: EUR 648 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-736": { "value": "
19\u00a0 Equity
Total equity
In EUR million
2023
2022
2021
Share capital and share premium
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Share capital
35
37
39
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Share premium
17,116
17,116
17,105
17,151
17,154
17,144
Other reserves
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Revaluation reserve: Equity securities at FVOCI
1,152
1,187
1,282
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Revaluation reserve: Debt instruments at FVOCI
-277
-339
92
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Revaluation reserve: Cash flow hedge
-2,058
-3,055
-153
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Revaluation reserve: Credit liability
31
70
-80
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Revaluation reserve: Property in own use
178
176
208
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Net defined benefit asset/liability remeasurement reserve
-317
-232
-212
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Currency translation reserve
-2,527
-2,395
-3,483
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Share of associates and joint ventures and other reserves
3,047
3,603
3,416
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-\u00a0\u00a0Treasury shares
-1,994
-1,205
-1,612
-2,763
-2,189
-544
Retained earnings
36,852
34,944
37,318
Shareholders\u2019 equity (parent)
51,240
49,909
53,919
Non-controlling interests
944
504
736
Total equity
52,184
50,413
54,654
Adjustments for hyperinflation
ING applies IAS 29 \u2018Hyperinflation\u2019 on its investment in T\u00fcrkiye since 2022. The IAS 29 indexation impact on
equity was EUR 54 million (2022: EUR 100 million including a one-off impact of EUR 64 million) of which EUR
284 million (2022: EUR 1,011 million) in the currency translation reserve, EUR 0 million (2022: EUR -563
million) in retained earnings, EUR 3 million (2022: EUR -17 million) in revaluation reserves and EUR -234
million (2022: EUR -331 million) in profit or loss.
Share capital and share premium
Share capital
Ordinary shares (par value EUR\u00a00.01)
Number x 1,000
In EUR million
2023
2022
2021
2023
2022
2021
Authorised share capital
9,142,000
9,142,000
14,729,000
91
91
147
Unissued share capital
5,643,806
5,415,461
10,824,935
56
54
108
Issued share capital
3,498,194
3,726,539
3,904,065
35
37
39
Changes in issued share capital
Ordinary shares (par value EUR\u00a00.01)
Number x 1,000
In EUR million
Issued share capital as at 31\u00a0December 2020
3,900,669
39
Issue of shares
3,397
Issued share capital as at 31\u00a0December 2021
3,904,065
39
Issue of shares
2,935
Cancellation of shares
-180,461
-2
Issued share capital as at 31\u00a0December 2022
3,726,539
37
Issue of shares
5
Cancellation of shares
-228,350
-2
Issued share capital as at 31\u00a0December 2023
3,498,194
35
In 2023, ING Groep N.V. issued 0.0 million ordinary shares (2022: 2.9 million and in 2021: 3.4 million ordinary
shares). In 2022 and 2021, shares were issued in order to fund obligations arising from share-based
employee incentive programmes. As from 2023 these shares are repurchased from the market. The
cancellation of shares relate to the shares purchased under the share buyback programmes (reference is
made to 'Ordinary shares held by ING Group (treasury shares)').
As at 31\u00a0December 2023 , ING Groep N.V. has issued USD 7,750 million (2022: USD 6,750 million) Perpetual
Additional Tier 1 Contingent Convertible Capital Securities which can, in accordance with their terms and
conditions, convert by operation of law into ordinary shares if the conditions to such a conversion are
fulfilled. As a result of this conversion, the issued share capital can increase by up to 864 million (2022: 750
million) ordinary shares. Reference is made to Note 18 'Subordinated loans'.
Ordinary shares
All ordinary shares are registered. No share certificates have been issued. The par value of ordinary shares is
EUR 0.01. The authorised ordinary share capital of ING Groep N.V. currently consists of 9,142 million ordinary
shares. As at 31\u00a0December 2023, 3,498 million ordinary shares were issued and fully paid.
Ordinary shares held by ING Group (Treasury shares)
As at 31\u00a0December 2023, 154.6 million ordinary shares (2022: 107.4 million and 2021: 128.3 million) of ING
Groep N.V. with a par value of EUR 0.01 are held by ING Groep N.V. or its subsidiaries.
Share premium
In EUR million
2023
2022
2021
Opening balance
17,116
17,105
17,089
Issue of shares
12
16
Closing balance
17,116
17,116
17,105
The increase in share premium in prior years, is a result of the issuance of ordinary shares related to share-
based employee incentive programmes. As from 2023 these shares are repurchased from the market.
Other reserves
Revaluation reserves
Changes in revaluation reserve: Equity securities and Debt instruments at FVOCI
Equity securities at FVOCI
Debt instruments at FVOCI
In EUR million
2023
2022
2021
2023
2022
2021
Opening balance
1,187
1,282
1,181
-339
92
296
Unrealised revaluations
-35
-118
94
53
-406
-164
Realised gains/losses transferred to the statement of
profit or loss
9
-25
-40
Realised revaluations transferred to retained earnings
1
23
6
Closing balance
1,152
1,187
1,282
-277
-339
92
Equity securities at FVOCI
In 2023, the unrealised revaluation of EUR -35\u00a0million (2022: EUR -118 million and 2021 : EUR 94 million)
includes revaluation of shares in Bank of Beijing for EUR -24 million (2022: EUR -86 million and 2021: EUR 38
million).
Changes in cash flow hedge and credit liability reserve
Cash flow hedge
Credit liability
In EUR million
2023
2022
2021
2023
2022
2021
Opening balance
-3,055
-153
1,450
70
-80
-117
Changes in credit liability reserve
-39
165
37
Unrealised revaluations
997
-2,901
-1,603
Realised revaluations transferred to retained earnings
-15
Closing balance
-2,058
-3,055
-153
31
70
-80
Cash flow hedge
ING mainly hedges floating rate lending with interest rate swaps. Due to a decrease in forward interest rates
in 2023, the interest rate swaps had a positive revaluation of EUR 997\u00a0million which is recognised in the cash
flow hedge reserve.
Changes in Property in own use reserve
In EUR million
2023
2022
2021
Opening balance
176
208
221
Impact IAS 29 on opening balance 1
-20
Unrealised revaluations
10
15
-2
Realised revaluations transferred to retained earnings
-8
-26
-11
Closing balance
178
176
208
1 Impact of application of hyperinflation accounting under IAS 29.
Net defined benefit asset/liability remeasurement reserve
Reference is made to Note 33 'Pensions and other post-employment benefits'.
Currency translation reserve
Changes in currency translation reserve
In EUR million
2023
2022
2021
Opening balance
-2,395
-3,483
-3,636
Impact IAS 29 on opening balance1
647
Unrealised revaluations
183
-7
-61
Realised gains/losses transferred to the statement of profit or loss
4
Exchange rate differences
-316
444
214
Closing balance
-2,527
-2,395
-3,483
1 Impact of application of hyperinflation accounting under IAS 29.
Unrealised revaluations relates to changes in the value of hedging instruments that are designated as net
investment hedges. The hedging strategy is to protect the CET1 ratio against adverse impact from exchange
rate fluctuations. The net decrease of unrealised revaluations and Exchange rate differences of EUR -132
million is related to several currencies including USD (EUR -238 million), TRY (EUR 11 million including EUR
284 million IAS 29 indexation effect), GBP (EUR 18 million), PLN (EUR 169\u00a0 million), CHF (EUR 37 million), AUD
(EUR -42 million), RUB (EUR -70 million), THB (EUR -13 million), CNY (EUR -16 million) and other currencies
(EUR 11 million).
Share of associates and joint ventures and other reserves
Changes in share of associates, joint ventures and other reserves
In EUR million
2023
2022
2021
Opening balance
3,603
3,416
3,246
Result for the year
336
161
191
Transfer to/from retained earnings
-892
26
-21
Closing balance
3,047
3,603
3,416
The Share of associates, joint ventures and other reserves includes non-distributable profits from associates
and joint ventures of EUR 815 million (2022: EUR 797 million and 2021: EUR 738 million). Other reserves
includes a statutory reserve of EUR 1,602 million (2022: EUR 2,264 million and 2021: EUR 2,103 million)
related to the former Stichting Regio Bank and the former Stichting Vakbondsspaarbank SPN and a legal
reserve of EUR 628 million (2022: EUR 540 million and 2021: EUR 573 million) related to internally developed
software. The transfer to retained earnings of EUR -892 million includes the release of the Regio bank and
Vakbondsspaarbank SPN reserve of EUR -998 million against regulatory expenses which are recognised in
the statement of profit or loss.
Treasury shares
Changes in treasury shares
In EUR million
Number x 1,000
2023
2022
2021
2023
2022
2021
Opening balance
-1,205
-1,612
-4
107,395
128,301
572
Purchased/sold for trading purposes
-7
4
-4
464
-312
102
Purchased under staff share plans
-42
3,156
Distributed under staff share plans
41
-3,106
Purchased Share buyback programme
-3,482
-1,721
-1,604
275,013
159,866
127,628
Cancelled Share buyback programme
2,701
2,124
-228,350
-180,461
Closing balance
-1,994
-1,205
-1,612
154,571
107,395
128,301
In 2023, ING Group initiated three share buyback programmes. On 1\u00a0March 2023, ING announced a share
buyback programme for a maximum total amount of EUR 50 million. The share buyback programme was
completed by 7\u00a0March 2023. In total, 3 million shares have been repurchased at an average price of EUR
13.18 per share and for a total consideration of EUR 42 million. The purpose of the share repurchase
programme was to meet obligations under the share-based compensation plans.
The second programme of EUR 1,500 million, commencing on 12\u00a0May 2023 and completed by October
2023. A total of 121 million shares have been repurchased at an average price of EUR 12.91 per share
(effective price for ING was EUR 12.36 per share after compensation received from the executing broker).
The shares have been cancelled in December 2023.
Third programme of EUR 2,500\u00a0million, commencing on 3\u00a0November 2023. As per 31\u00a0December 2023 154
million shares have been repurchased at an average price of EUR 12.90 per share and for a total
consideration of EUR 1,982 million. The programme was completed by February 2024. In total 195 million
shares have been repurchased at an average price of EUR 12.87 per share (effective price for ING was EUR
12.83 per share after compensation received from the executing broker). ING has the intention to cancel
these shares in April 2024.
In March 2023 107 million shares (EUR 1,201 million), purchased in 2022, were cancelled.
Retained earnings
Changes in retained earnings
In EUR million
2023
2022
2021
Opening balance
34,944
37,318
35,180
Impact on opening balance1
-45
-563
Transfer to/from other reserves
899
-8
26
Result for the year
6,951
3,513
4,585
Dividend and other distributions
-2,668
-3,349
-2,342
Employee share plans
-7
15
12
Changes in composition of the group and other changes
-3,222
-1,984
-143
Closing balance
36,852
34,944
37,318
1 In 2023, changes in policy following the adoption of IFRS 17 and change in policy for non-financial guarantees. In 2022, impact of
application of hyperinflation accounting under IAS 29.
Dividend and other distributions
In 2023, a cash dividend of EUR 2,668 million (2022: EUR 2,178 million and 2021: EUR 1,288 million) and
other cash distributions of EUR 0 million (2022 EUR 1,171 million and 2021: EUR 1,054 million) were paid to
the shareholders of ING Group. For further information, reference is made to Note 29 'Dividend per ordinary
share'.
Other changes
Other changes includes an amount of EUR -3,217 million (2022: EUR -1,983 million; 2021: EUR -140 million),
which corresponds to the purchase and cancellation of treasury shares purchased under the share buyback
programmes.
Ordinary shares - Restrictions with respect to dividend and repayment of capital
The following equity components cannot be freely distributed: Revaluation reserves, Net defined benefit
asset/liability remeasurement reserve, Currency translation reserve, Share of associates and joint ventures
reserve and Other reserves including the reserve related to the former Stichting Regio Bank and the former
Stichting Vakbondsspaarbank SPN.
ING Groep N.V. is subject to legal restrictions regarding the amount of dividends it can pay to the holders of
its ordinary shares. Pursuant to the Dutch Civil Code, dividends can only be paid up to an amount equal to
the excess of the company\u2019s own funds over the sum of the paid-up capital and reserves required by law.
Moreover, ING Groep N.V.\u2019s ability to pay dividends is dependent on the dividend payment ability of its
subsidiaries, associates and joint ventures. ING Groep N.V. is legally required to create a non-distributable
reserve insofar as profits of its subsidiaries, associates and joint ventures are subject to dividend payment
restrictions which apply to those subsidiaries, associates and joint ventures themselves.
Non distributable reserves, determined in accordance with the financial reporting requirements included in
Part 9 of Book 2 of the Dutch Civil Code, from ING Group\u2019s subsidiaries, associates and joint ventures are as
follows:
Non-distributable reserves
In EUR million
2023
2022
2021
ING Bank
6,727
8,408
8,205
Other
0
0
0
Non-distributable reserves
6,727
8,408
8,205
In addition to the legal and regulatory restrictions on distributing dividends from subsidiaries, associates and
joint ventures to ING Groep N.V. there are various other considerations and limitations that are taken into
account in determining the appropriate levels of equity in the Group\u2019s subsidiaries, associates and joint
ventures. These considerations and limitations include, but are not restricted to, minimum capital
requirements that are imposed by industry regulators in the countries in which the subsidiaries, associates
and joint ventures operate, or other limitations which may exist in certain countries and may or may not be
temporary in nature. It is not possible to disclose a reliable quantification of these limitations. Without
prejudice to the authority of the Executive Board to allocate profits to reserves and to the fact that the
ordinary shares are the most junior securities issued by ING Groep N.V., no specific dividend payment
restrictions with respect to ordinary shares exist. Refer to Note 47 'Capital management' for further details
of the minimal capital requirements and dividend policy of ING Group.
Furthermore, ING Groep N.V. is subject to legal restrictions with respect to repayment of capital to holders of
ordinary shares. Pursuant to the Dutch Civil Code, capital may only be repaid if none of ING Groep N.V.\u2019s
creditors opposes such a repayment within two months following the announcement of a resolution to that
effect.
Cumulative preference shares (not issued)
Pursuant to the Articles of Association of ING Groep N.V. the authorised cumulative preference share capital
consists of 4.6 billion cumulative preference shares, of which none have been issued. The par value of these
cumulative preference shares is EUR 0.01. A right to acquire cumulative preference shares has been granted
to Stichting Continu\u00efteit ING (ING Continuity Foundation).
The cumulative preference shares rank before the ordinary shares in entitlement to dividend and to
distributions upon liquidation of ING Groep N.V.
The dividend on the cumulative preference shares will be equal to a percentage, calculated on the amount
compulsorily paid up or yet to be paid up. This percentage shall be equal to the average of the euro short-
term rate (\u20acSTR) as calculated by the European Central Bank during the financial year for which the
distribution is made; this percentage being weighted on the basis of the number of days for which it applies,
and increased by 2.585 percentage points.
If, and to the extent that the profit available for distribution is not sufficient to pay the dividend referred to
above in full, the shortfall will be made up from the reserves insofar as possible. If, and to the extent that,
the dividend distribution cannot be made from the reserves, the profits earned in subsequent years shall
first be used to make up the shortfall before any distribution may be made on shares of any other category.
ING Groep N.V.\u2019s Articles of Association make provision for the cancellation of cumulative preference shares.
Upon cancellation of cumulative preference shares and upon liquidation of ING Groep N.V., the amount paid
up on the cumulative preference shares will be repaid together with the accrued dividend as well as any
dividend shortfall in preceding years, insofar as this shortfall has not yet been made up. No specific dividend
payment restrictions with respect to the cumulative preference shares exist.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-737": { "value": "
Share capital
Ordinary shares (par value EUR\u00a00.01)
Number x 1,000
In EUR million
2023
2022
2021
2023
2022
2021
Authorised share capital
9,142,000
9,142,000
14,729,000
91
91
147
Unissued share capital
5,643,806
5,415,461
10,824,935
56
54
108
Issued share capital
3,498,194
3,726,539
3,904,065
35
37
39
Changes in issued share capital
Ordinary shares (par value EUR\u00a00.01)
Number x 1,000
In EUR million
Issued share capital as at 31\u00a0December 2020
3,900,669
39
Issue of shares
3,397
Issued share capital as at 31\u00a0December 2021
3,904,065
39
Issue of shares
2,935
Cancellation of shares
-180,461
-2
Issued share capital as at 31\u00a0December 2022
3,726,539
37
Issue of shares
5
Cancellation of shares
-228,350
-2
Issued share capital as at 31\u00a0December 2023
3,498,194
35
In 2023, ING Groep N.V. issued 0.0 million ordinary shares (2022: 2.9 million and in 2021: 3.4 million ordinary
shares). In 2022 and 2021, shares were issued in order to fund obligations arising from share-based
employee incentive programmes. As from 2023 these shares are repurchased from the market. The
cancellation of shares relate to the shares purchased under the share buyback programmes (reference is
made to 'Ordinary shares held by ING Group (treasury shares)').
As at 31\u00a0December 2023 , ING Groep N.V. has issued USD 7,750 million (2022: USD 6,750 million) Perpetual
Additional Tier 1 Contingent Convertible Capital Securities which can, in accordance with their terms and
conditions, convert by operation of law into ordinary shares if the conditions to such a conversion are
fulfilled. As a result of this conversion, the issued share capital can increase by up to 864 million (2022: 750
million) ordinary shares. Reference is made to Note 18 'Subordinated loans'.
Ordinary shares
All ordinary shares are registered. No share certificates have been issued. The par value of ordinary shares is
EUR 0.01. The authorised ordinary share capital of ING Groep N.V. currently consists of 9,142 million ordinary
shares. As at 31\u00a0December 2023, 3,498 million ordinary shares were issued and fully paid.
Ordinary shares held by ING Group (Treasury shares)
As at 31\u00a0December 2023, 154.6 million ordinary shares (2022: 107.4 million and 2021: 128.3 million) of ING
Groep N.V. with a par value of EUR 0.01 are held by ING Groep N.V. or its subsidiaries.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-738": { "value": "
In 2023, ING Groep N.V. issued 0.0 million ordinary shares (2022: 2.9 million and in 2021: 3.4 million ordinary
shares). In 2022 and 2021, shares were issued in order to fund obligations arising from share-based
employee incentive programmes. As from 2023 these shares are repurchased from the market. The
cancellation of shares relate to the shares purchased under the share buyback programmes (reference is
made to 'Ordinary shares held by ING Group (treasury shares)').
As at 31\u00a0December 2023 , ING Groep N.V. has issued USD 7,750 million (2022: USD 6,750 million) Perpetual
Additional Tier 1 Contingent Convertible Capital Securities which can, in accordance with their terms and
conditions, convert by operation of law into ordinary shares if the conditions to such a conversion are
fulfilled. As a result of this conversion, the issued share capital can increase by up to 864 million (2022: 750
million) ordinary shares. Reference is made to Note 18 'Subordinated loans'.
Ordinary shares
All ordinary shares are registered. No share certificates have been issued. The par value of ordinary shares is
EUR 0.01. The authorised ordinary share capital of ING Groep N.V. currently consists of 9,142 million ordinary
shares. As at 31\u00a0December 2023, 3,498 million ordinary shares were issued and fully paid.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-739": { "value": "
Other reserves
Revaluation reserves
Changes in revaluation reserve: Equity securities and Debt instruments at FVOCI
Equity securities at FVOCI
Debt instruments at FVOCI
In EUR million
2023
2022
2021
2023
2022
2021
Opening balance
1,187
1,282
1,181
-339
92
296
Unrealised revaluations
-35
-118
94
53
-406
-164
Realised gains/losses transferred to the statement of
profit or loss
9
-25
-40
Realised revaluations transferred to retained earnings
1
23
6
Closing balance
1,152
1,187
1,282
-277
-339
92
Equity securities at FVOCI
In 2023, the unrealised revaluation of EUR -35\u00a0million (2022: EUR -118 million and 2021 : EUR 94 million)
includes revaluation of shares in Bank of Beijing for EUR -24 million (2022: EUR -86 million and 2021: EUR 38
million).
Changes in cash flow hedge and credit liability reserve
Cash flow hedge
Credit liability
In EUR million
2023
2022
2021
2023
2022
2021
Opening balance
-3,055
-153
1,450
70
-80
-117
Changes in credit liability reserve
-39
165
37
Unrealised revaluations
997
-2,901
-1,603
Realised revaluations transferred to retained earnings
-15
Closing balance
-2,058
-3,055
-153
31
70
-80
Cash flow hedge
ING mainly hedges floating rate lending with interest rate swaps. Due to a decrease in forward interest rates
in 2023, the interest rate swaps had a positive revaluation of EUR 997\u00a0million which is recognised in the cash
flow hedge reserve.
Changes in Property in own use reserve
In EUR million
2023
2022
2021
Opening balance
176
208
221
Impact IAS 29 on opening balance 1
-20
Unrealised revaluations
10
15
-2
Realised revaluations transferred to retained earnings
-8
-26
-11
Closing balance
178
176
208
1 Impact of application of hyperinflation accounting under IAS 29.
Net defined benefit asset/liability remeasurement reserve
Reference is made to Note 33 'Pensions and other post-employment benefits'.
Currency translation reserve
Changes in currency translation reserve
In EUR million
2023
2022
2021
Opening balance
-2,395
-3,483
-3,636
Impact IAS 29 on opening balance1
647
Unrealised revaluations
183
-7
-61
Realised gains/losses transferred to the statement of profit or loss
4
Exchange rate differences
-316
444
214
Closing balance
-2,527
-2,395
-3,483
1 Impact of application of hyperinflation accounting under IAS 29.
Unrealised revaluations relates to changes in the value of hedging instruments that are designated as net
investment hedges. The hedging strategy is to protect the CET1 ratio against adverse impact from exchange
rate fluctuations. The net decrease of unrealised revaluations and Exchange rate differences of EUR -132
million is related to several currencies including USD (EUR -238 million), TRY (EUR 11 million including EUR
284 million IAS 29 indexation effect), GBP (EUR 18 million), PLN (EUR 169\u00a0 million), CHF (EUR 37 million), AUD
(EUR -42 million), RUB (EUR -70 million), THB (EUR -13 million), CNY (EUR -16 million) and other currencies
(EUR 11 million).
Share of associates and joint ventures and other reserves
Changes in share of associates, joint ventures and other reserves
In EUR million
2023
2022
2021
Opening balance
3,603
3,416
3,246
Result for the year
336
161
191
Transfer to/from retained earnings
-892
26
-21
Closing balance
3,047
3,603
3,416
The Share of associates, joint ventures and other reserves includes non-distributable profits from associates
and joint ventures of EUR 815 million (2022: EUR 797 million and 2021: EUR 738 million). Other reserves
includes a statutory reserve of EUR 1,602 million (2022: EUR 2,264 million and 2021: EUR 2,103 million)
related to the former Stichting Regio Bank and the former Stichting Vakbondsspaarbank SPN and a legal
reserve of EUR 628 million (2022: EUR 540 million and 2021: EUR 573 million) related to internally developed
software. The transfer to retained earnings of EUR -892 million includes the release of the Regio bank and
Vakbondsspaarbank SPN reserve of EUR -998 million against regulatory expenses which are recognised in
the statement of profit or loss.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-740": { "value": "
Currency translation reserve
Changes in currency translation reserve
In EUR million
2023
2022
2021
Opening balance
-2,395
-3,483
-3,636
Impact IAS 29 on opening balance1
647
Unrealised revaluations
183
-7
-61
Realised gains/losses transferred to the statement of profit or loss
4
Exchange rate differences
-316
444
214
Closing balance
-2,527
-2,395
-3,483
1 Impact of application of hyperinflation accounting under IAS 29.
Unrealised revaluations relates to changes in the value of hedging instruments that are designated as net
investment hedges. The hedging strategy is to protect the CET1 ratio against adverse impact from exchange
rate fluctuations. The net decrease of unrealised revaluations and Exchange rate differences of EUR -132
million is related to several currencies including USD (EUR -238 million), TRY (EUR 11 million including EUR
284 million IAS 29 indexation effect), GBP (EUR 18 million), PLN (EUR 169\u00a0 million), CHF (EUR 37 million), AUD
(EUR -42 million), RUB (EUR -70 million), THB (EUR -13 million), CNY (EUR -16 million) and other currencies
(EUR 11 million).
22\u00a0 Valuation results and net trading income
Valuation results and net trading income
in EUR million
2023
2022
2021
Securities trading results
873
-356
787
Derivatives trading results
116
11
-554
Other trading results
273
71
84
Change in fair value of derivatives relating to
\u2013\u00a0 fair value hedges
-3,028
5,265
-85
\u2013\u00a0 cash flow hedges (ineffective portion)
48
20
1
\u2013\u00a0 other non-trading derivatives
563
1,164
-53
Change in fair value of assets and liabilities (hedged items)
2,962
-5,150
113
Valuation results on assets and liabilities designated at FVPL (excluding trading)
-128
439
-13
Foreign exchange transactions results
1,230
38
567
2,910
1,501
847
In general, the fair value movements are influenced by changes in the market conditions, such as stock
prices, credit spreads, interest rates and currency exchange rates. In 2023, the financial markets were
characterised by elevated levels of volatility. In the first quarter of the year, the markets worldwide were
shaken by the demise of SVB bank and the stress surrounding Credit Suisse, fuelling uncertainty around
possible additional defaults. Furthermore, the ongoing interest-rate hikes by the central banks in Europe and
the US led to a fast increase in rates worldwide. Toward the end of the year, the probability increased for
interest rates going down, which has been reflected in the forward interest rates. In 2022, the market was
affected by a significant increase in interest-rates volatility, interest-rate hikes across EU and US, and a
steady fall of the EUR value and appreciation of USD, while in 2021 the market recovered from the Covid-19
pandemic, stabilised and returned to pre-pandemic levels.
Securities trading results includes the results of market making in instruments such as government
securities, equity securities, corporate debt securities, money-market instruments. Derivatives trading
results includes the results of derivatives such as interest rate swaps, options, futures, and forward
contracts. Trading gains and losses relating to trading securities still held as at 31\u00a0December 2023 amount
to EUR 160\u00a0million ( 2022: EUR -157\u00a0million ; 2021: EUR\u00a0-268\u00a0million). The majority of the risks involved in
security and currency trading are economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading
results.
Other trading results include the results of trading loans and funds entrusted.
Foreign exchange transactions results include gains and losses from spot and forward contracts, options,
futures, and translated foreign currency assets and liabilities. The result on currency trading is included in
foreign exchange transactions results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that
are classified under IFRS as Trading but are closely related to servicing the needs of the clients of ING. ING
offers products that are traded on the financial markets to institutional clients, corporate clients, and
governments. ING\u2019s trading books are managed based on internal limits and comprise a mix of products
with results which could be offset. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate
exposures. From a risk perspective, the gross amount of trading assets must be considered together with
the gross amount of trading liabilities, which are presented separately on the statement of financial
position. However, IFRS does not always allow netting of these positions in the statement of financial
position. Reference is made to Note 4 'Financial assets at fair value through profit or loss' and Note 14
'Financial liabilities at fair value through profit or loss' for information on trading assets and trading liabilities
respectively.
\u2018Valuation results and net trading income\u2019 include the fair value movements on derivatives (used for both
hedge accounting and economically hedging exposures) as well as the changes in the fair value of assets
and liabilities included in hedging relationships as hedged items. During 2023, the interest-rate movements
significantly affected the fair value changes of other non-trading derivatives as well as the fair value
changes of both the derivatives and the hedged items designated in fair value hedges. Reference is made to
Note 36 'Derivatives and hedge accounting' for information on derivatives used for hedge accounting.
Furthermore, derivatives trading results is also impacted by fair value movements arising from changes in
credit spreads (CVA and DVA), bid offer spreads, model risk and incremental cost of funding on derivatives
(FVA and CollVA). Refer to Note 35 'Fair value of assets and liabilities' for information on these valuation
adjustments.
Valuation results on assets and liabilities designated at fair value through profit or loss (excluding trading)\u2019
include fair value changes on financial assets and financial liabilities driven by changed market conditions.
Refer to Note 4 'Financial assets at fair value through profit or loss' and to Note 14 'Financial liabilities at fair
value through profit or loss'.
In addition, \u2018Valuation results on assets and liabilities designated at fair value through profit or loss
(excluding trading)\u2019 include fair value adjustments on own issued notes amounting to EUR -230\u00a0million
(2022: EUR 745 million; 2021: EUR 65 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-741": { "value": "
Treasury shares
Changes in treasury shares
In EUR million
Number x 1,000
2023
2022
2021
2023
2022
2021
Opening balance
-1,205
-1,612
-4
107,395
128,301
572
Purchased/sold for trading purposes
-7
4
-4
464
-312
102
Purchased under staff share plans
-42
3,156
Distributed under staff share plans
41
-3,106
Purchased Share buyback programme
-3,482
-1,721
-1,604
275,013
159,866
127,628
Cancelled Share buyback programme
2,701
2,124
-228,350
-180,461
Closing balance
-1,994
-1,205
-1,612
154,571
107,395
128,301
In 2023, ING Group initiated three share buyback programmes. On 1\u00a0March 2023, ING announced a share
buyback programme for a maximum total amount of EUR 50 million. The share buyback programme was
completed by 7\u00a0March 2023. In total, 3 million shares have been repurchased at an average price of EUR
13.18 per share and for a total consideration of EUR 42 million. The purpose of the share repurchase
programme was to meet obligations under the share-based compensation plans.
The second programme of EUR 1,500 million, commencing on 12\u00a0May 2023 and completed by October
2023. A total of 121 million shares have been repurchased at an average price of EUR 12.91 per share
(effective price for ING was EUR 12.36 per share after compensation received from the executing broker).
The shares have been cancelled in December 2023.
Third programme of EUR 2,500\u00a0million, commencing on 3\u00a0November 2023. As per 31\u00a0December 2023 154
million shares have been repurchased at an average price of EUR 12.90 per share and for a total
consideration of EUR 1,982 million. The programme was completed by February 2024. In total 195 million
shares have been repurchased at an average price of EUR 12.87 per share (effective price for ING was EUR
12.83 per share after compensation received from the executing broker). ING has the intention to cancel
these shares in April 2024.
In March 2023 107 million shares (EUR 1,201 million), purchased in 2022, were cancelled.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-744": { "value": "
20\u00a0 Net interest income
Net interest income
in EUR million
2023
2022
2021
2023
2022
2021
Interest income on loans
31,830
18,537
13,977
Interest expense on deposits from banks
1,555
903
109
Interest income on financial assets at fair value through OCI
1,078
511
346
Interest expense on customer deposits
10,400
3,251
1,362
Interest income on debt securities at amortised cost
877
591
468
Interest expense on debt securities in issue
4,014
1,722
1,218
Interest income on non-trading derivatives (hedge accounting)
10,682
4,011
2,361
Interest expense on subordinated loans
708
648
571
Negative interest on liabilities
19
887
1,487
Negative interest on assets
285
572
Total interest income using effective interest rate method
44,486
24,537
18,639
Interest expense on non-trading derivatives (hedge accounting)
11,849
4,144
1,700
Total interest expense using effective interest rate method
28,526
10,952
5,533
Interest income on financial assets at fair value through profit or loss
4,934
1,444
435
Interest income on non-trading derivatives (no hedge accounting)
2,637
2,390
2,025
Interest expense on financial liabilities at fair value through profit or loss
4,410
1,237
304
Interest income other
171
100
14
Interest expense on non-trading derivatives (no hedge accounting)
3,131
2,411
1,605
Total other interest income
7,741
3,934
2,474
Interest expense on lease liabilities
28
15
14
Total interest income
52,227
28,470
21,114
Interest expense other
157
98
43
Total other interest expense
7,726
3,762
1,966
Total interest expense
36,252
14,714
7,499
Net interest income
15,976
13,756
13,615
Total net interest income amounts to EUR 15,976 million (2022: EUR 13,756 million; 2021: EUR 13,615
million). The increasing net interest income for 2023 and 2022 is a reflection of the interest rates during the
period which repriced faster on the asset side compared to the liability side of the balance sheet. In 2022 an
one-off adjustment was recorded in interest income on loans regarding the credit moratoria in Poland (EUR
-343\u00a0million).
Due to prevalent rates during the comparative years, Negative interest on liabilities includes the ECB funding
rate benefit from the TLTRO III programme of EUR 314 million in 2022 (2021: EUR 808 million), while for 2023
Interest expense on deposits from banks includes interest paid under the TLTRO III programme of EUR
557\u00a0million.
This was driven by the following applicable TLTRO III rates applicable for ING Group: -100 bps throughout the
entire 2021 and the first half of 2022 until 23 June 2022; -37 bps, -36 bps, -29 bps between 23 June 2022
and 22 November 2022 for ING's participation in series 3,4 and 7 of TLTRO III, respectively; 150 bps between
22 November 2022 and 21 December 2022; 200 bps from 21 December 2022 until 8 February 2023; 250 bps
between 8 February 2023 and 22 March 2023; 300 bps between 22 March 2023 and May 2023 and
increased to 400 bps during the period May to December 2023.
Furthermore, the before mentioned change in terms in 2022 caused the discontinuation of the fair value
hedge accounting relationship on TLTRO III, impacting net interest income of 2022 for an amount of EUR
-483 million (refer to Note 36 'Derivatives and hedge accounting' for more details).
21\u00a0 Net fee and commission income
Net fee and commission income
in EUR million
2023
2022
2021
Fee and commission income
Payment Services
2,062
1,888
1,661
Securities business
584
632
853
Insurance and other broking
529
682
734
Portfolio management
625
600
617
Lending business
602
556
477
Financial guarantees and other commitments
459
496
458
Other
248
232
204
Total fee and commission income
5,109
5,085
5,004
Fee and commission expenses
Payment Services
704
600
563
Securities business
128
160
164
Distribution of products
480
555
591
Other
202
184
169
Total fee and commission expenses
1,514
1,499
1,487
Net fee and commission income
3,595
3,586
3,517
Payment services fees are earned for providing services for deposit accounts and cards, cash management
and transaction processing including interchange. Securities fees and commissions are fees for securities
brokerage and securities underwriting. Portfolio management fees include fees earned for asset
management activities, fiduciary and related activities in which ING holds or invests assets on behalf of its
customers. Fees and commissions from Lending (syndication) business include income earned for lending
advisory, origination, underwriting and loan commitments which are not part of the effective interest rate.
Financial guarantees and other commitments fees and commissions are earned from bank guarantees,
letters of credit and other trade finance related products, factoring and leasing. Fees paid for distribution of
products are all fees paid for the distribution of ING\u2019s products and services through external providers.
Reference is made to Note 30 'Segments', which includes net fee and commission income, as reported to
the Executive Board and the Management Board Banking, disaggregated by line of business and by
geographical segment.
22\u00a0 Valuation results and net trading income
Valuation results and net trading income
in EUR million
2023
2022
2021
Securities trading results
873
-356
787
Derivatives trading results
116
11
-554
Other trading results
273
71
84
Change in fair value of derivatives relating to
\u2013\u00a0 fair value hedges
-3,028
5,265
-85
\u2013\u00a0 cash flow hedges (ineffective portion)
48
20
1
\u2013\u00a0 other non-trading derivatives
563
1,164
-53
Change in fair value of assets and liabilities (hedged items)
2,962
-5,150
113
Valuation results on assets and liabilities designated at FVPL (excluding trading)
-128
439
-13
Foreign exchange transactions results
1,230
38
567
2,910
1,501
847
In general, the fair value movements are influenced by changes in the market conditions, such as stock
prices, credit spreads, interest rates and currency exchange rates. In 2023, the financial markets were
characterised by elevated levels of volatility. In the first quarter of the year, the markets worldwide were
shaken by the demise of SVB bank and the stress surrounding Credit Suisse, fuelling uncertainty around
possible additional defaults. Furthermore, the ongoing interest-rate hikes by the central banks in Europe and
the US led to a fast increase in rates worldwide. Toward the end of the year, the probability increased for
interest rates going down, which has been reflected in the forward interest rates. In 2022, the market was
affected by a significant increase in interest-rates volatility, interest-rate hikes across EU and US, and a
steady fall of the EUR value and appreciation of USD, while in 2021 the market recovered from the Covid-19
pandemic, stabilised and returned to pre-pandemic levels.
Securities trading results includes the results of market making in instruments such as government
securities, equity securities, corporate debt securities, money-market instruments. Derivatives trading
results includes the results of derivatives such as interest rate swaps, options, futures, and forward
contracts. Trading gains and losses relating to trading securities still held as at 31\u00a0December 2023 amount
to EUR 160\u00a0million ( 2022: EUR -157\u00a0million ; 2021: EUR\u00a0-268\u00a0million). The majority of the risks involved in
security and currency trading are economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading
results.
Other trading results include the results of trading loans and funds entrusted.
Foreign exchange transactions results include gains and losses from spot and forward contracts, options,
futures, and translated foreign currency assets and liabilities. The result on currency trading is included in
foreign exchange transactions results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that
are classified under IFRS as Trading but are closely related to servicing the needs of the clients of ING. ING
offers products that are traded on the financial markets to institutional clients, corporate clients, and
governments. ING\u2019s trading books are managed based on internal limits and comprise a mix of products
with results which could be offset. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate
exposures. From a risk perspective, the gross amount of trading assets must be considered together with
the gross amount of trading liabilities, which are presented separately on the statement of financial
position. However, IFRS does not always allow netting of these positions in the statement of financial
position. Reference is made to Note 4 'Financial assets at fair value through profit or loss' and Note 14
'Financial liabilities at fair value through profit or loss' for information on trading assets and trading liabilities
respectively.
\u2018Valuation results and net trading income\u2019 include the fair value movements on derivatives (used for both
hedge accounting and economically hedging exposures) as well as the changes in the fair value of assets
and liabilities included in hedging relationships as hedged items. During 2023, the interest-rate movements
significantly affected the fair value changes of other non-trading derivatives as well as the fair value
changes of both the derivatives and the hedged items designated in fair value hedges. Reference is made to
Note 36 'Derivatives and hedge accounting' for information on derivatives used for hedge accounting.
Furthermore, derivatives trading results is also impacted by fair value movements arising from changes in
credit spreads (CVA and DVA), bid offer spreads, model risk and incremental cost of funding on derivatives
(FVA and CollVA). Refer to Note 35 'Fair value of assets and liabilities' for information on these valuation
adjustments.
Valuation results on assets and liabilities designated at fair value through profit or loss (excluding trading)\u2019
include fair value changes on financial assets and financial liabilities driven by changed market conditions.
Refer to Note 4 'Financial assets at fair value through profit or loss' and to Note 14 'Financial liabilities at fair
value through profit or loss'.
In addition, \u2018Valuation results on assets and liabilities designated at fair value through profit or loss
(excluding trading)\u2019 include fair value adjustments on own issued notes amounting to EUR -230\u00a0million
(2022: EUR 745 million; 2021: EUR 65 million).
23\u00a0 Investment income
Investment income
in EUR million
2023
2022
2021
Dividend income
105
149
122
Realised gains/losses on disposal of debt instruments measured at FVOCI
-11
32
45
Income from and fair value gains/losses on investment properties
-1
95
181
167
In 2023, 2022 and 2021 dividend income mainly consists of dividend received from ING\u2019s equity stake in
Bank of Beijing.
24\u00a0 Other net income
In 2023, Other net income of EUR -147 million ( 2022: EUR -363 million; 2021: EUR 236 million) includes EUR
-244 million (2022: EUR -333 million) net monetary loss reflecting the IAS 29 hyperinflation impact in T\u00fcrkiye
related to the indexation of T\u00fcrkiye's statement of financial position and statement of profit or loss with an
offsetting effect in the currency translation reserve. Furthermore, it includes the positive recovery of
defaulted receivables of EUR 25 million (2022 EUR 32 million; 2021 EUR 25 million).
Other net income as per 31 December 2022, also includes an amount of EUR -307 million loss recognised to
unwind a macro fair value hedge of deposits, which led to a timing difference with expected fair value.
Furthermore, it includes the proceeds of the agreement with Boursorama after our exit from the retail
banking market in France of EUR 125 million and a gain of EUR 67 million from a legacy entity in Retail
Belgium.
In 2021, other net income included the recognition of EUR 72 million relating to a better than expected
recovery of the insolvency of a financial institution in the Netherlands and EUR 34 million proceeds of the
agreement with Raiffeisenbank due to the withdrawal from the retail banking market in the Czech Republic.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-745": { "value": "
20\u00a0 Net interest income
Net interest income
in EUR million
2023
2022
2021
2023
2022
2021
Interest income on loans
31,830
18,537
13,977
Interest expense on deposits from banks
1,555
903
109
Interest income on financial assets at fair value through OCI
1,078
511
346
Interest expense on customer deposits
10,400
3,251
1,362
Interest income on debt securities at amortised cost
877
591
468
Interest expense on debt securities in issue
4,014
1,722
1,218
Interest income on non-trading derivatives (hedge accounting)
10,682
4,011
2,361
Interest expense on subordinated loans
708
648
571
Negative interest on liabilities
19
887
1,487
Negative interest on assets
285
572
Total interest income using effective interest rate method
44,486
24,537
18,639
Interest expense on non-trading derivatives (hedge accounting)
11,849
4,144
1,700
Total interest expense using effective interest rate method
28,526
10,952
5,533
Interest income on financial assets at fair value through profit or loss
4,934
1,444
435
Interest income on non-trading derivatives (no hedge accounting)
2,637
2,390
2,025
Interest expense on financial liabilities at fair value through profit or loss
4,410
1,237
304
Interest income other
171
100
14
Interest expense on non-trading derivatives (no hedge accounting)
3,131
2,411
1,605
Total other interest income
7,741
3,934
2,474
Interest expense on lease liabilities
28
15
14
Total interest income
52,227
28,470
21,114
Interest expense other
157
98
43
Total other interest expense
7,726
3,762
1,966
Total interest expense
36,252
14,714
7,499
Net interest income
15,976
13,756
13,615
Total net interest income amounts to EUR 15,976 million (2022: EUR 13,756 million; 2021: EUR 13,615
million). The increasing net interest income for 2023 and 2022 is a reflection of the interest rates during the
period which repriced faster on the asset side compared to the liability side of the balance sheet. In 2022 an
one-off adjustment was recorded in interest income on loans regarding the credit moratoria in Poland (EUR
-343\u00a0million).
Due to prevalent rates during the comparative years, Negative interest on liabilities includes the ECB funding
rate benefit from the TLTRO III programme of EUR 314 million in 2022 (2021: EUR 808 million), while for 2023
Interest expense on deposits from banks includes interest paid under the TLTRO III programme of EUR
557\u00a0million.
This was driven by the following applicable TLTRO III rates applicable for ING Group: -100 bps throughout the
entire 2021 and the first half of 2022 until 23 June 2022; -37 bps, -36 bps, -29 bps between 23 June 2022
and 22 November 2022 for ING's participation in series 3,4 and 7 of TLTRO III, respectively; 150 bps between
22 November 2022 and 21 December 2022; 200 bps from 21 December 2022 until 8 February 2023; 250 bps
between 8 February 2023 and 22 March 2023; 300 bps between 22 March 2023 and May 2023 and
increased to 400 bps during the period May to December 2023.
Furthermore, the before mentioned change in terms in 2022 caused the discontinuation of the fair value
hedge accounting relationship on TLTRO III, impacting net interest income of 2022 for an amount of EUR
-483 million (refer to Note 36 'Derivatives and hedge accounting' for more details).", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-743": { "value": "
20\u00a0 Net interest income
Net interest income
in EUR million
2023
2022
2021
2023
2022
2021
Interest income on loans
31,830
18,537
13,977
Interest expense on deposits from banks
1,555
903
109
Interest income on financial assets at fair value through OCI
1,078
511
346
Interest expense on customer deposits
10,400
3,251
1,362
Interest income on debt securities at amortised cost
877
591
468
Interest expense on debt securities in issue
4,014
1,722
1,218
Interest income on non-trading derivatives (hedge accounting)
10,682
4,011
2,361
Interest expense on subordinated loans
708
648
571
Negative interest on liabilities
19
887
1,487
Negative interest on assets
285
572
Total interest income using effective interest rate method
44,486
24,537
18,639
Interest expense on non-trading derivatives (hedge accounting)
11,849
4,144
1,700
Total interest expense using effective interest rate method
28,526
10,952
5,533
Interest income on financial assets at fair value through profit or loss
4,934
1,444
435
Interest income on non-trading derivatives (no hedge accounting)
2,637
2,390
2,025
Interest expense on financial liabilities at fair value through profit or loss
4,410
1,237
304
Interest income other
171
100
14
Interest expense on non-trading derivatives (no hedge accounting)
3,131
2,411
1,605
Total other interest income
7,741
3,934
2,474
Interest expense on lease liabilities
28
15
14
Total interest income
52,227
28,470
21,114
Interest expense other
157
98
43
Total other interest expense
7,726
3,762
1,966
Total interest expense
36,252
14,714
7,499
Net interest income
15,976
13,756
13,615
Total net interest income amounts to EUR 15,976 million (2022: EUR 13,756 million; 2021: EUR 13,615
million). The increasing net interest income for 2023 and 2022 is a reflection of the interest rates during the
period which repriced faster on the asset side compared to the liability side of the balance sheet. In 2022 an
one-off adjustment was recorded in interest income on loans regarding the credit moratoria in Poland (EUR
-343\u00a0million).
Due to prevalent rates during the comparative years, Negative interest on liabilities includes the ECB funding
rate benefit from the TLTRO III programme of EUR 314 million in 2022 (2021: EUR 808 million), while for 2023
Interest expense on deposits from banks includes interest paid under the TLTRO III programme of EUR
557\u00a0million.
This was driven by the following applicable TLTRO III rates applicable for ING Group: -100 bps throughout the
entire 2021 and the first half of 2022 until 23 June 2022; -37 bps, -36 bps, -29 bps between 23 June 2022
and 22 November 2022 for ING's participation in series 3,4 and 7 of TLTRO III, respectively; 150 bps between
22 November 2022 and 21 December 2022; 200 bps from 21 December 2022 until 8 February 2023; 250 bps
between 8 February 2023 and 22 March 2023; 300 bps between 22 March 2023 and May 2023 and
increased to 400 bps during the period May to December 2023.
Furthermore, the before mentioned change in terms in 2022 caused the discontinuation of the fair value
hedge accounting relationship on TLTRO III, impacting net interest income of 2022 for an amount of EUR
-483 million (refer to Note 36 'Derivatives and hedge accounting' for more details).", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-742": { "value": "
20\u00a0 Net interest income
Net interest income
in EUR million
2023
2022
2021
2023
2022
2021
Interest income on loans
31,830
18,537
13,977
Interest expense on deposits from banks
1,555
903
109
Interest income on financial assets at fair value through OCI
1,078
511
346
Interest expense on customer deposits
10,400
3,251
1,362
Interest income on debt securities at amortised cost
877
591
468
Interest expense on debt securities in issue
4,014
1,722
1,218
Interest income on non-trading derivatives (hedge accounting)
10,682
4,011
2,361
Interest expense on subordinated loans
708
648
571
Negative interest on liabilities
19
887
1,487
Negative interest on assets
285
572
Total interest income using effective interest rate method
44,486
24,537
18,639
Interest expense on non-trading derivatives (hedge accounting)
11,849
4,144
1,700
Total interest expense using effective interest rate method
28,526
10,952
5,533
Interest income on financial assets at fair value through profit or loss
4,934
1,444
435
Interest income on non-trading derivatives (no hedge accounting)
2,637
2,390
2,025
Interest expense on financial liabilities at fair value through profit or loss
4,410
1,237
304
Interest income other
171
100
14
Interest expense on non-trading derivatives (no hedge accounting)
3,131
2,411
1,605
Total other interest income
7,741
3,934
2,474
Interest expense on lease liabilities
28
15
14
Total interest income
52,227
28,470
21,114
Interest expense other
157
98
43
Total other interest expense
7,726
3,762
1,966
Total interest expense
36,252
14,714
7,499
Net interest income
15,976
13,756
13,615
Total net interest income amounts to EUR 15,976 million (2022: EUR 13,756 million; 2021: EUR 13,615
million). The increasing net interest income for 2023 and 2022 is a reflection of the interest rates during the
period which repriced faster on the asset side compared to the liability side of the balance sheet. In 2022 an
one-off adjustment was recorded in interest income on loans regarding the credit moratoria in Poland (EUR
-343\u00a0million).
Due to prevalent rates during the comparative years, Negative interest on liabilities includes the ECB funding
rate benefit from the TLTRO III programme of EUR 314 million in 2022 (2021: EUR 808 million), while for 2023
Interest expense on deposits from banks includes interest paid under the TLTRO III programme of EUR
557\u00a0million.
This was driven by the following applicable TLTRO III rates applicable for ING Group: -100 bps throughout the
entire 2021 and the first half of 2022 until 23 June 2022; -37 bps, -36 bps, -29 bps between 23 June 2022
and 22 November 2022 for ING's participation in series 3,4 and 7 of TLTRO III, respectively; 150 bps between
22 November 2022 and 21 December 2022; 200 bps from 21 December 2022 until 8 February 2023; 250 bps
between 8 February 2023 and 22 March 2023; 300 bps between 22 March 2023 and May 2023 and
increased to 400 bps during the period May to December 2023.
Furthermore, the before mentioned change in terms in 2022 caused the discontinuation of the fair value
hedge accounting relationship on TLTRO III, impacting net interest income of 2022 for an amount of EUR
-483 million (refer to Note 36 'Derivatives and hedge accounting' for more details).", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-747": { "value": "
21\u00a0 Net fee and commission income
Net fee and commission income
in EUR million
2023
2022
2021
Fee and commission income
Payment Services
2,062
1,888
1,661
Securities business
584
632
853
Insurance and other broking
529
682
734
Portfolio management
625
600
617
Lending business
602
556
477
Financial guarantees and other commitments
459
496
458
Other
248
232
204
Total fee and commission income
5,109
5,085
5,004
Fee and commission expenses
Payment Services
704
600
563
Securities business
128
160
164
Distribution of products
480
555
591
Other
202
184
169
Total fee and commission expenses
1,514
1,499
1,487
Net fee and commission income
3,595
3,586
3,517
Payment services fees are earned for providing services for deposit accounts and cards, cash management
and transaction processing including interchange. Securities fees and commissions are fees for securities
brokerage and securities underwriting. Portfolio management fees include fees earned for asset
management activities, fiduciary and related activities in which ING holds or invests assets on behalf of its
customers. Fees and commissions from Lending (syndication) business include income earned for lending
advisory, origination, underwriting and loan commitments which are not part of the effective interest rate.
Financial guarantees and other commitments fees and commissions are earned from bank guarantees,
letters of credit and other trade finance related products, factoring and leasing. Fees paid for distribution of
products are all fees paid for the distribution of ING\u2019s products and services through external providers.
Reference is made to Note 30 'Segments', which includes net fee and commission income, as reported to
the Executive Board and the Management Board Banking, disaggregated by line of business and by
geographical segment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-746": { "value": "
21\u00a0 Net fee and commission income
Net fee and commission income
in EUR million
2023
2022
2021
Fee and commission income
Payment Services
2,062
1,888
1,661
Securities business
584
632
853
Insurance and other broking
529
682
734
Portfolio management
625
600
617
Lending business
602
556
477
Financial guarantees and other commitments
459
496
458
Other
248
232
204
Total fee and commission income
5,109
5,085
5,004
Fee and commission expenses
Payment Services
704
600
563
Securities business
128
160
164
Distribution of products
480
555
591
Other
202
184
169
Total fee and commission expenses
1,514
1,499
1,487
Net fee and commission income
3,595
3,586
3,517
Payment services fees are earned for providing services for deposit accounts and cards, cash management
and transaction processing including interchange. Securities fees and commissions are fees for securities
brokerage and securities underwriting. Portfolio management fees include fees earned for asset
management activities, fiduciary and related activities in which ING holds or invests assets on behalf of its
customers. Fees and commissions from Lending (syndication) business include income earned for lending
advisory, origination, underwriting and loan commitments which are not part of the effective interest rate.
Financial guarantees and other commitments fees and commissions are earned from bank guarantees,
letters of credit and other trade finance related products, factoring and leasing. Fees paid for distribution of
products are all fees paid for the distribution of ING\u2019s products and services through external providers.
Reference is made to Note 30 'Segments', which includes net fee and commission income, as reported to
the Executive Board and the Management Board Banking, disaggregated by line of business and by
geographical segment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-748": { "value": "
22\u00a0 Valuation results and net trading income
Valuation results and net trading income
in EUR million
2023
2022
2021
Securities trading results
873
-356
787
Derivatives trading results
116
11
-554
Other trading results
273
71
84
Change in fair value of derivatives relating to
\u2013\u00a0 fair value hedges
-3,028
5,265
-85
\u2013\u00a0 cash flow hedges (ineffective portion)
48
20
1
\u2013\u00a0 other non-trading derivatives
563
1,164
-53
Change in fair value of assets and liabilities (hedged items)
2,962
-5,150
113
Valuation results on assets and liabilities designated at FVPL (excluding trading)
-128
439
-13
Foreign exchange transactions results
1,230
38
567
2,910
1,501
847
In general, the fair value movements are influenced by changes in the market conditions, such as stock
prices, credit spreads, interest rates and currency exchange rates. In 2023, the financial markets were
characterised by elevated levels of volatility. In the first quarter of the year, the markets worldwide were
shaken by the demise of SVB bank and the stress surrounding Credit Suisse, fuelling uncertainty around
possible additional defaults. Furthermore, the ongoing interest-rate hikes by the central banks in Europe and
the US led to a fast increase in rates worldwide. Toward the end of the year, the probability increased for
interest rates going down, which has been reflected in the forward interest rates. In 2022, the market was
affected by a significant increase in interest-rates volatility, interest-rate hikes across EU and US, and a
steady fall of the EUR value and appreciation of USD, while in 2021 the market recovered from the Covid-19
pandemic, stabilised and returned to pre-pandemic levels.
Securities trading results includes the results of market making in instruments such as government
securities, equity securities, corporate debt securities, money-market instruments. Derivatives trading
results includes the results of derivatives such as interest rate swaps, options, futures, and forward
contracts. Trading gains and losses relating to trading securities still held as at 31\u00a0December 2023 amount
to EUR 160\u00a0million ( 2022: EUR -157\u00a0million ; 2021: EUR\u00a0-268\u00a0million). The majority of the risks involved in
security and currency trading are economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading
results.
Other trading results include the results of trading loans and funds entrusted.
Foreign exchange transactions results include gains and losses from spot and forward contracts, options,
futures, and translated foreign currency assets and liabilities. The result on currency trading is included in
foreign exchange transactions results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that
are classified under IFRS as Trading but are closely related to servicing the needs of the clients of ING. ING
offers products that are traded on the financial markets to institutional clients, corporate clients, and
governments. ING\u2019s trading books are managed based on internal limits and comprise a mix of products
with results which could be offset. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate
exposures. From a risk perspective, the gross amount of trading assets must be considered together with
the gross amount of trading liabilities, which are presented separately on the statement of financial
position. However, IFRS does not always allow netting of these positions in the statement of financial
position. Reference is made to Note 4 'Financial assets at fair value through profit or loss' and Note 14
'Financial liabilities at fair value through profit or loss' for information on trading assets and trading liabilities
respectively.
\u2018Valuation results and net trading income\u2019 include the fair value movements on derivatives (used for both
hedge accounting and economically hedging exposures) as well as the changes in the fair value of assets
and liabilities included in hedging relationships as hedged items. During 2023, the interest-rate movements
significantly affected the fair value changes of other non-trading derivatives as well as the fair value
changes of both the derivatives and the hedged items designated in fair value hedges. Reference is made to
Note 36 'Derivatives and hedge accounting' for information on derivatives used for hedge accounting.
Furthermore, derivatives trading results is also impacted by fair value movements arising from changes in
credit spreads (CVA and DVA), bid offer spreads, model risk and incremental cost of funding on derivatives
(FVA and CollVA). Refer to Note 35 'Fair value of assets and liabilities' for information on these valuation
adjustments.
Valuation results on assets and liabilities designated at fair value through profit or loss (excluding trading)\u2019
include fair value changes on financial assets and financial liabilities driven by changed market conditions.
Refer to Note 4 'Financial assets at fair value through profit or loss' and to Note 14 'Financial liabilities at fair
value through profit or loss'.
In addition, \u2018Valuation results on assets and liabilities designated at fair value through profit or loss
(excluding trading)\u2019 include fair value adjustments on own issued notes amounting to EUR -230\u00a0million
(2022: EUR 745 million; 2021: EUR 65 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-750": { "value": "
25\u00a0 Staff expenses
Staff expenses
in EUR million
2023
2022
2021
Salaries
4,559
4,145
4,011
Pension costs and other staff-related benefit costs
418
390
408
Social security costs
635
584
563
Share-based compensation arrangements
31
26
31
External employees
776
738
699
Education
50
47
47
Other staff costs
256
222
182
6,725
6,152
5,941
Share-based compensation arrangements include EUR 31\u00a0million (2022: EUR 25 million; 2021: EUR 29
million) relating to equity-settled share-based payment arrangements and EUR 0\u00a0million (2022: EUR 1
million; 2021: EUR 2 million) relating to cash-settled share-based payment arrangements.
Number of employees
Netherlands
Rest of the world
Total
2023
2022
2021
2023
2022
2021
2023
2022
2021
Total average number of
internal employees at full
time equivalent basis
14,449
14,488
15,138
44,985
43,081
42,523
59,434
57,569
57,660
Remuneration of senior management, Executive Board and Supervisory Board
Reference is made to Note 46 'Related parties'.
Share plans
ING grants various types of share awards, namely deferred shares, performance shares and upfront shares,
which form part of the variable remuneration offering via the Long-term Sustainable Performance Plan
(LSPP). The entitlement to the LSPP share awards is granted conditionally. If the participant remains in
employment for an uninterrupted period between the grant date and the vesting date, the entitlement
becomes unconditional, with the exception of the upfront shares which are immediately vested upon grant.
Upfront and deferred shares awarded to the Management Board members of ING Group as well as identified
staff, have a retention obligation that must be adhered to upon vesting, typically a minimum retention of 12
months applies. ING has the authority to apply a holdback to awarded but unvested shares and a clawback
to vested shares.
The share awards granted in 2023 relate to the performance year 2022. In 2023, 52,693 share awards
(2022: 55,651; 2021: 0) were granted to the members of the Executive Board of ING Groep N.V., and 172,103
share awards (2022: 137,506; 2021: 123,750) were granted to the Management Board Banking. To senior
management and other employees 3,244,951 share awards (2022: 2,913,926; 2021: 3,267,372) were
granted.
In 2022 and 2021, the obligations with regard to share plans are funded by newly issued shares at the
discretion of ING Group. As of 2023, shares are bought back from the market to fund share plans.
Changes in share awards
Share awards (in numbers)
Weighted average grant date
fair values (in euros)
2023
2022
2021
2023
2022
2021
Opening balance as at 1 January
3,699,555
3,674,672
3,878,219
7.97
7.60
7.25
Granted
3,469,747
3,107,083
3,391,122
9.71
8.99
9.69
Vested
-3,113,115
-2,962,698
-3,459,163
8.83
8.60
9.25
Forfeited
-158,387
-119,502
-135,506
8.54
7.63
7.61
Closing balance
3,897,800
3,699,555
3,674,672
8.81
7.97
7.60
As at 31\u00a0December 2023, the share awards consists of 3,897,800 share awards (2022: 3,201,579; 2021:
3,154,715) relating to equity-settled share-based payment arrangements and 0 share awards (2022:
497,976; 2021: 519,957) relating to cash-settled share-based payment arrangements.
The fair value of share awards granted is recognised as an expense under Staff expenses and is allocated
over the vesting period of the share awards. The fair value calculation takes into account the current share
prices, expected volatilities and the dividend yield of ING shares.
As at 31\u00a0December 2023, total unrecognised compensation costs related to share awards amount to EUR 15
million (2022: EUR 13 million; 2021: EUR 13 million). These costs are expected to be recognised over a
weighted average period of 2.0 years (2022: 1.9 years; 2021: 1.7 years).
26\u00a0 Other operating expenses
Other operating expenses
in EUR million
2023
2022
2021
Regulatory costs
1,042
1,250
1,265
Audit and non-audit services
36
31
34
IT related expenses
948
818
781
Advertising and public relations
369
331
305
External advisory fees
299
310
301
Office expenses
289
273
281
Travel and accommodation expenses
125
91
52
Contributions and subscriptions
122
109
112
Postal charges
36
31
38
Depreciation of property and equipment
461
485
573
Amortisation of intangible assets
213
226
261
(Reversals of) impairments of property and equipment
32
19
26
(Reversals of) impairments of intangible assets
6
60
95
Addition to / (unused amounts reversed of) provision for reorganisations
173
170
214
Addition to / (unused amounts reversed of) other provisions
70
117
254
Other
617
726
658
4,839
5,047
5,251
Reference is made to Note 9 'Property and equipment' for (reversals of) impairments of property and
equipment and Note 10 'Intangible assets' for (reversals of) impairments of intangible assets.
For further information on addition to (unused amounts reversed of) provision for reorganisations refer to
Note 15 'Provisions' and for further information on addition to (unused amounts reversed of) other
provisions refer to Note 15 'Provisions' and Note 42 'Legal proceedings'.
Regulatory costs
Regulatory costs represent contributions to the Deposit Guarantee Schemes (DGS), the Single Resolution
Fund (SRF), local bank taxes and local resolution funds. Included in Regulatory costs for 2023, are
contributions to DGS of EUR 320 million (2022: EUR 425 million; 2021: EUR 435 million) mainly related to the
Netherlands, Germany, Belgium and Poland and contributions to the SRF and local resolution funds of EUR
251 million (2022: EUR 354 million; 2021: EUR 308 million). In 2023 local bank taxes increased by EUR 1
million from EUR 470 million in 2022 to EUR 472 million (2021: EUR 522 million).
In 2022, ING Bank Slaski, together with seven other Polish banks, established an Institutional Protection
Scheme (IPS). The fund can be used to ensure the liquidity and solvency of each of its participants, and to
assist in the resolution of participating and non-participating banks. The contribution by ING amounts to EUR
nil for 2023 (2022: EUR 99\u00a0million) and is recognized as regulatory costs (DGS).", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-749": { "value": "
25\u00a0 Staff expenses
Staff expenses
in EUR million
2023
2022
2021
Salaries
4,559
4,145
4,011
Pension costs and other staff-related benefit costs
418
390
408
Social security costs
635
584
563
Share-based compensation arrangements
31
26
31
External employees
776
738
699
Education
50
47
47
Other staff costs
256
222
182
6,725
6,152
5,941
Share-based compensation arrangements include EUR 31\u00a0million (2022: EUR 25 million; 2021: EUR 29
million) relating to equity-settled share-based payment arrangements and EUR 0\u00a0million (2022: EUR 1
million; 2021: EUR 2 million) relating to cash-settled share-based payment arrangements.
Number of employees
Netherlands
Rest of the world
Total
2023
2022
2021
2023
2022
2021
2023
2022
2021
Total average number of
internal employees at full
time equivalent basis
14,449
14,488
15,138
44,985
43,081
42,523
59,434
57,569
57,660
Remuneration of senior management, Executive Board and Supervisory Board
Reference is made to Note 46 'Related parties'.
Share plans
ING grants various types of share awards, namely deferred shares, performance shares and upfront shares,
which form part of the variable remuneration offering via the Long-term Sustainable Performance Plan
(LSPP). The entitlement to the LSPP share awards is granted conditionally. If the participant remains in
employment for an uninterrupted period between the grant date and the vesting date, the entitlement
becomes unconditional, with the exception of the upfront shares which are immediately vested upon grant.
Upfront and deferred shares awarded to the Management Board members of ING Group as well as identified
staff, have a retention obligation that must be adhered to upon vesting, typically a minimum retention of 12
months applies. ING has the authority to apply a holdback to awarded but unvested shares and a clawback
to vested shares.
The share awards granted in 2023 relate to the performance year 2022. In 2023, 52,693 share awards
(2022: 55,651; 2021: 0) were granted to the members of the Executive Board of ING Groep N.V., and 172,103
share awards (2022: 137,506; 2021: 123,750) were granted to the Management Board Banking. To senior
management and other employees 3,244,951 share awards (2022: 2,913,926; 2021: 3,267,372) were
granted.
In 2022 and 2021, the obligations with regard to share plans are funded by newly issued shares at the
discretion of ING Group. As of 2023, shares are bought back from the market to fund share plans.
Changes in share awards
Share awards (in numbers)
Weighted average grant date
fair values (in euros)
2023
2022
2021
2023
2022
2021
Opening balance as at 1 January
3,699,555
3,674,672
3,878,219
7.97
7.60
7.25
Granted
3,469,747
3,107,083
3,391,122
9.71
8.99
9.69
Vested
-3,113,115
-2,962,698
-3,459,163
8.83
8.60
9.25
Forfeited
-158,387
-119,502
-135,506
8.54
7.63
7.61
Closing balance
3,897,800
3,699,555
3,674,672
8.81
7.97
7.60
As at 31\u00a0December 2023, the share awards consists of 3,897,800 share awards (2022: 3,201,579; 2021:
3,154,715) relating to equity-settled share-based payment arrangements and 0 share awards (2022:
497,976; 2021: 519,957) relating to cash-settled share-based payment arrangements.
The fair value of share awards granted is recognised as an expense under Staff expenses and is allocated
over the vesting period of the share awards. The fair value calculation takes into account the current share
prices, expected volatilities and the dividend yield of ING shares.
As at 31\u00a0December 2023, total unrecognised compensation costs related to share awards amount to EUR 15
million (2022: EUR 13 million; 2021: EUR 13 million). These costs are expected to be recognised over a
weighted average period of 2.0 years (2022: 1.9 years; 2021: 1.7 years).
33\u00a0 Pensions and other post-employment benefits\u00a0
Most group companies sponsor defined contribution pension plans. The assets of all ING Group\u2019s defined
contribution plans are held in independently administered funds. Contributions, including the defined
contribution plan in the Netherlands, are principally determined as a percentage of remuneration. These
plans do not give rise to provisions in the statement of financial position, other than relating to short-term
timing differences included in other assets and in other liabilities.
ING Group maintains defined benefit retirement plans in some countries. These plans provide benefits that
are related to the remuneration and service of employees upon retirement. The benefits in some of these
plans are subject to various forms of indexation. The indexation is, in some cases, at the discretion of
management; in other cases it is dependent upon the sufficiency of plan assets.
Annual contributions are paid to the funds at a rate necessary to adequately finance the accrued liabilities
of the plans calculated in accordance with local legal requirements. Plans in all countries are designed to
comply with applicable local regulations governing investments and funding levels.
ING Group provides other post-employment benefits to certain former employees. These post-employment
benefits are primarily discounts on ING products.
Defined contribution plans
ING, as part of the labour agreements with its employees, sponsors a number of defined contribution plans.
ING\u2019s obligation is limited to contributions which are agreed in advance and also includes employee
contributions. The most significant plans are in the Netherlands and Belgium. The employer's contribution is
recognised as an expense which amounted for 2023 EUR 391\u00a0million (2022: EUR 364 million).
Defined benefit retirement plans
Statement of financial position - Net defined benefit asset/liability
Plan assets and defined benefit obligation per country
Plan assets
Defined benefit obligation
Funded Status
in EUR million
2023
2022
2023
2022
2023
2022
The Netherlands
331
310
426
400
-95
-90
United States
257
248
245
230
12
18
United Kingdom
1,257
1,277
790
750
467
527
Belgium
516
507
473
475
43
32
Other countries
317
295
353
305
-37
-10
Funded status (Net defined benefit
asset/liability)
2,678
2,637
2,288
2,159
390
478
Presented as:
- Other assets
554
617
- Other liabilities
-164
-139
390
478
The most recent (actuarial) valuations of the plan assets and the present value of the defined benefit
obligation were carried out as at 31\u00a0December 2023. The present value of the defined benefit obligation, and
the related current service cost and past service cost, were determined using the projected unit credit
method.
Changes in the fair value of plan assets for the period were as follows:
Changes in fair value of plan assets
in EUR million
2023
2022
Opening balance as at 1 January
2,637
3,671
Interest income
115
54
Remeasurements: Return on plan assets excluding amounts included in interest income
-8
-947
Employer's contribution
28
34
Participants contributions
4
3
Benefits paid
-119
-126
Exchange rate differences
22
-53
Closing balance
2,678
2,637
Actual return on the plan assets
107
-894
As at 31\u00a0December 2023, the defined benefit plans did not hold any direct investments in ING Groep N.V.
(2022: nil). During 2023 and 2022, there were no purchases or sales of assets between ING and the pension
funds.
ING does not manage the pension funds and thus receives no compensation for fund management. The
pension funds have not engaged ING in any swap or derivative transactions to manage the risk of the
pension funds.
No plan assets are expected to be returned to ING Group during 2024 .
Changes in the present value of the defined benefit obligation and other post-employment benefits for the
period were as follows:
Changes in defined benefit obligation and other post-employment benefits
Defined benefit
obligation
Other post-
employment benefits
in EUR million
2023
2022
2023
2022
Opening balance as at 1 January
2,159
3,115
29
72
Current service cost
27
33
1
1
Interest cost
92
46
2
1
Remeasurements: Actuarial gains and losses arising from changes in
demographic assumptions
-9
Remeasurements: Actuarial gains and losses arising from changes in
financial assumptions
127
-882
1
-45
Participants\u2019 contributions
3
3
Benefits paid
-123
-129
-1
-1
Past service cost
1
-1
Effect of curtailment or settlement
Exchange rate differences
14
-26
-3
5
Closing balance
2,288
2,159
30
29
Amounts recognised directly in Other comprehensive income were as follows:
Changes in the net defined benefit assets/liability remeasurement reserve
in EUR million
2023
2022
Opening balance as at 1 January
-232
-212
Remeasurement of plan assets
-8
-947
Actuarial gains and losses arising from changes in demographic assumptions
9
Actuarial gains and losses arising from changes in financial assumptions
-127
882
Taxation and Exchange rate differences
40
46
Total Other comprehensive income movement for the year
-85
-19
Closing balance
-317
-232
In 2023, EUR -8\u00a0million (2022: EUR -947 million) remeasurements of plan assets, that is recognised as a loss
in other comprehensive income, is driven by yield changes on investments.
The EUR 127\u00a0million (2022: EUR 882 million) actuarial gains arising from changes in financial assumptions in
the calculation of the defined benefit obligation are mainly due to an increase in interest yield curves.
The accumulated amount of remeasurements recognised directly in Other comprehensive income is EUR
-397\u00a0million (EUR -317 million after tax) as at 31\u00a0December 2023 (2022: EUR -289\u00a0million; EUR -232\u00a0million
after tax).
Amounts recognised in the statement of profit or loss related to pension and other staff-related benefits are
as follows:
Pension and other staff-related benefit costs
Net defined benefit
asset/liability
Other post-employment
benefits
Total
in EUR million
2023
2022
2021
2023
2022
2021
2023
2022
2021
Current service cost
27
33
33
1
1
1
28
34
34
Past service cost
1
-1
1
Net Interest cost
-23
-8
-6
2
1
2
-21
-6
-4
Effect of curtailment or settlement
-2
-2
Defined benefit plans
5
26
27
3
2
1
8
27
28
Defined contribution plans
391
364
369
Pension and other post employment
benefits
399
392
397
Other staff related benefits
19
-2
11
Pension and other staff-related benefits
418
390
408
Determination of the net defined benefit asset/liability
The net defined benefit asset/liability is reviewed and adjusted annually. The assumptions used in the
determination of the net defined benefit asset/liability and the Other post-employment benefits include
discount rates, mortality rates, expected rates of salary increases (excluding promotion increases), and
indexation. The rates used for salary developments, interest discount factors, and other adjustments reflect
country-specific conditions.
The key assumption in the determination of the net defined benefit asset/liability is the discount rate. The
discount rate is the weighted average of the discount rates that are applied in different regions where ING
Group has defined benefit pension plans (weighted by the defined benefit obligation). The discount rate is
based on a methodology that uses market yields on high quality corporate bonds of the specific regions
with durations matching the pension liabilities as key input. Market yields of high quality corporate bonds
reflect the yield on corporate bonds with an AA rating for durations where such yields are available. An
extrapolation is applied in order to determine the yield to the longer durations for which no AA-rated
corporate bonds are available. As a result of the limited availability of long-duration AA-rated corporate
bonds, extrapolation is an important element of the determination of the discount rate. The weighted
average discount rate applied for net defined benefit asset/liability for 2023 was 4.0% (2022: 4.3%) based on
the pension plan in the Netherlands, Germany, Belgium, the United States of America, and the United
Kingdom. The average discount rate applied for Other post-employment benefits in 2023 was 5.2% (2022:
5.5%).
Sensitivity analysis of key assumptions
ING performs sensitivity analyses on the most significant assumptions: discount rates, mortality, expected
rate of salary increase, and indexation. The sensitivity analysis has been carried out under the assumption
that the changes occurred at the end of the reporting period.
The sensitivity analysis calculates the financial impact on the defined benefit obligation of an increase or
decrease of the weighted averages of each significant actuarial assumption, all other assumptions held
constant. In practice, this is unlikely to occur, and some changes of the assumptions may be correlated.
Changes to mortality, expected rate of salary increase, and indexation would have no material impact on
the defined benefit obligation. The most significant impact would be from a change in the discount rate. An
increase or decrease in the discount rate of 1.0% creates an impact on the defined benefit obligation of\u00a0 EUR
238 million (decrease) and EUR 282 million (increase), respectively.
Expected cash flows
ING Group\u2019s subsidiaries should fund the cost of the entitlements expected to be earned on a yearly basis.
For 2024, the expected contributions to defined benefit pension plans are EUR 58 million.
The benefit payments for defined benefit and other post-employment benefits expected to be made by the
plan between 2024-2028 are estimated to be between EUR 133 million and EUR 150 million per year. From
2028 to 2032 the total payments made by the plan are expected to be EUR 738 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-751": { "value": "
Number of employees
Netherlands
Rest of the world
Total
2023
2022
2021
2023
2022
2021
2023
2022
2021
Total average number of
internal employees at full
time equivalent basis
14,449
14,488
15,138
44,985
43,081
42,523
59,434
57,569
57,660
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-752": { "value": "
Share plans
ING grants various types of share awards, namely deferred shares, performance shares and upfront shares,
which form part of the variable remuneration offering via the Long-term Sustainable Performance Plan
(LSPP). The entitlement to the LSPP share awards is granted conditionally. If the participant remains in
employment for an uninterrupted period between the grant date and the vesting date, the entitlement
becomes unconditional, with the exception of the upfront shares which are immediately vested upon grant.
Upfront and deferred shares awarded to the Management Board members of ING Group as well as identified
staff, have a retention obligation that must be adhered to upon vesting, typically a minimum retention of 12
months applies. ING has the authority to apply a holdback to awarded but unvested shares and a clawback
to vested shares.
The share awards granted in 2023 relate to the performance year 2022. In 2023, 52,693 share awards
(2022: 55,651; 2021: 0) were granted to the members of the Executive Board of ING Groep N.V., and 172,103
share awards (2022: 137,506; 2021: 123,750) were granted to the Management Board Banking. To senior
management and other employees 3,244,951 share awards (2022: 2,913,926; 2021: 3,267,372) were
granted.
In 2022 and 2021, the obligations with regard to share plans are funded by newly issued shares at the
discretion of ING Group. As of 2023, shares are bought back from the market to fund share plans.
Changes in share awards
Share awards (in numbers)
Weighted average grant date
fair values (in euros)
2023
2022
2021
2023
2022
2021
Opening balance as at 1 January
3,699,555
3,674,672
3,878,219
7.97
7.60
7.25
Granted
3,469,747
3,107,083
3,391,122
9.71
8.99
9.69
Vested
-3,113,115
-2,962,698
-3,459,163
8.83
8.60
9.25
Forfeited
-158,387
-119,502
-135,506
8.54
7.63
7.61
Closing balance
3,897,800
3,699,555
3,674,672
8.81
7.97
7.60
As at 31\u00a0December 2023, the share awards consists of 3,897,800 share awards (2022: 3,201,579; 2021:
3,154,715) relating to equity-settled share-based payment arrangements and 0 share awards (2022:
497,976; 2021: 519,957) relating to cash-settled share-based payment arrangements.
The fair value of share awards granted is recognised as an expense under Staff expenses and is allocated
over the vesting period of the share awards. The fair value calculation takes into account the current share
prices, expected volatilities and the dividend yield of ING shares.
As at 31\u00a0December 2023, total unrecognised compensation costs related to share awards amount to EUR 15
million (2022: EUR 13 million; 2021: EUR 13 million). These costs are expected to be recognised over a
weighted average period of 2.0 years (2022: 1.9 years; 2021: 1.7 years).
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-754": { "value": "
26\u00a0 Other operating expenses
Other operating expenses
in EUR million
2023
2022
2021
Regulatory costs
1,042
1,250
1,265
Audit and non-audit services
36
31
34
IT related expenses
948
818
781
Advertising and public relations
369
331
305
External advisory fees
299
310
301
Office expenses
289
273
281
Travel and accommodation expenses
125
91
52
Contributions and subscriptions
122
109
112
Postal charges
36
31
38
Depreciation of property and equipment
461
485
573
Amortisation of intangible assets
213
226
261
(Reversals of) impairments of property and equipment
32
19
26
(Reversals of) impairments of intangible assets
6
60
95
Addition to / (unused amounts reversed of) provision for reorganisations
173
170
214
Addition to / (unused amounts reversed of) other provisions
70
117
254
Other
617
726
658
4,839
5,047
5,251
Reference is made to Note 9 'Property and equipment' for (reversals of) impairments of property and
equipment and Note 10 'Intangible assets' for (reversals of) impairments of intangible assets.
For further information on addition to (unused amounts reversed of) provision for reorganisations refer to
Note 15 'Provisions' and for further information on addition to (unused amounts reversed of) other
provisions refer to Note 15 'Provisions' and Note 42 'Legal proceedings'.
Regulatory costs
Regulatory costs represent contributions to the Deposit Guarantee Schemes (DGS), the Single Resolution
Fund (SRF), local bank taxes and local resolution funds. Included in Regulatory costs for 2023, are
contributions to DGS of EUR 320 million (2022: EUR 425 million; 2021: EUR 435 million) mainly related to the
Netherlands, Germany, Belgium and Poland and contributions to the SRF and local resolution funds of EUR
251 million (2022: EUR 354 million; 2021: EUR 308 million). In 2023 local bank taxes increased by EUR 1
million from EUR 470 million in 2022 to EUR 472 million (2021: EUR 522 million).
In 2022, ING Bank Slaski, together with seven other Polish banks, established an Institutional Protection
Scheme (IPS). The fund can be used to ensure the liquidity and solvency of each of its participants, and to
assist in the resolution of participating and non-participating banks. The contribution by ING amounts to EUR
nil for 2023 (2022: EUR 99\u00a0million) and is recognized as regulatory costs (DGS).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-753": { "value": "
26\u00a0 Other operating expenses
Other operating expenses
in EUR million
2023
2022
2021
Regulatory costs
1,042
1,250
1,265
Audit and non-audit services
36
31
34
IT related expenses
948
818
781
Advertising and public relations
369
331
305
External advisory fees
299
310
301
Office expenses
289
273
281
Travel and accommodation expenses
125
91
52
Contributions and subscriptions
122
109
112
Postal charges
36
31
38
Depreciation of property and equipment
461
485
573
Amortisation of intangible assets
213
226
261
(Reversals of) impairments of property and equipment
32
19
26
(Reversals of) impairments of intangible assets
6
60
95
Addition to / (unused amounts reversed of) provision for reorganisations
173
170
214
Addition to / (unused amounts reversed of) other provisions
70
117
254
Other
617
726
658
4,839
5,047
5,251
Reference is made to Note 9 'Property and equipment' for (reversals of) impairments of property and
equipment and Note 10 'Intangible assets' for (reversals of) impairments of intangible assets.
For further information on addition to (unused amounts reversed of) provision for reorganisations refer to
Note 15 'Provisions' and for further information on addition to (unused amounts reversed of) other
provisions refer to Note 15 'Provisions' and Note 42 'Legal proceedings'.
Regulatory costs
Regulatory costs represent contributions to the Deposit Guarantee Schemes (DGS), the Single Resolution
Fund (SRF), local bank taxes and local resolution funds. Included in Regulatory costs for 2023, are
contributions to DGS of EUR 320 million (2022: EUR 425 million; 2021: EUR 435 million) mainly related to the
Netherlands, Germany, Belgium and Poland and contributions to the SRF and local resolution funds of EUR
251 million (2022: EUR 354 million; 2021: EUR 308 million). In 2023 local bank taxes increased by EUR 1
million from EUR 470 million in 2022 to EUR 472 million (2021: EUR 522 million).
In 2022, ING Bank Slaski, together with seven other Polish banks, established an Institutional Protection
Scheme (IPS). The fund can be used to ensure the liquidity and solvency of each of its participants, and to
assist in the resolution of participating and non-participating banks. The contribution by ING amounts to EUR
nil for 2023 (2022: EUR 99\u00a0million) and is recognized as regulatory costs (DGS).", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-755": { "value": "
27\u00a0 Audit fees
Total audit and non-audit services include the following fees for services provided by the Group\u2019s auditor.
Fees of Group\u2019s auditors
in EUR million
2023
2022
2021
Audit fees
29
27
27
Audit related fees
1
Total1
30
27
27
1 The Group\u2019s auditors did not provide any non-audit services.
Fees as disclosed in the table above relate to the network of the Group\u2019s auditors and are the total expected
audit fees for the period excluding VAT.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-756": { "value": "
28\u00a0 Earnings per ordinary share
Earnings per ordinary share
Weighted average number
of ordinary shares outstanding
Amount
during the period
Per ordinary share
(in EUR million)
(in millions)
(in EUR)
2023
2022
2021
2023
2022
2021
2023
2022
2021
Basic earnings
7,287
3,674
4,776
3,562.9
3,619.1
3,888.5
2.05
1.02
1.23
Basic earnings from
continuing operations
7,287
3,674
4,776
2.05
1.02
1.23
Effect of dilutive
instruments:
Share plans
2.4
5.2
2.2
2.4
5.2
2.2
Diluted earnings
7,287
3,674
4,776
3,565.3
3,624.3
3,890.7
2.04
1.01
1.23
Diluted earnings from
continuing operations
7,287
3,674
4,776
2.04
1.01
1.23
Earnings per ordinary share is calculated on the basis of the weighted average number of ordinary shares
outstanding. In calculating the weighted average number of ordinary shares outstanding, own shares held
by group companies (including share buyback programmes) are deducted from the total number of
ordinary shares in issue.
Dilutive instruments
Diluted earnings per share is calculated as if the share plans outstanding at the end of the period had been
exercised at the beginning of the period and assuming that the cash received from dilutive instruments (if
any) is used to buy own shares against the average market price during the period. The net increase in the
number of shares resulting from exercising share plans is added to the average number of shares used for
the calculation of diluted earnings per share.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-757": { "value": "7287000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-758": { "value": "3674000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-759": { "value": "4776000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-760": { "value": "7287000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-761": { "value": "3674000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-762": { "value": "4776000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-763": { "value": "2.05", "decimals": 2, "dimensions": { "concept": "ifrs-full:BasicEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-764": { "value": "1.02", "decimals": 2, "dimensions": { "concept": "ifrs-full:BasicEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-765": { "value": "1.23", "decimals": 2, "dimensions": { "concept": "ifrs-full:BasicEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-766": { "value": "7287000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-767": { "value": "3674000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-768": { "value": "4776000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-769": { "value": "7287000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-770": { "value": "3674000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-771": { "value": "4776000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ProfitLossAttributableToOwnersOfParent", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-772": { "value": "2.04", "decimals": 2, "dimensions": { "concept": "ifrs-full:DilutedEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-773": { "value": "1.01", "decimals": 2, "dimensions": { "concept": "ifrs-full:DilutedEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-774": { "value": "1.23", "decimals": 2, "dimensions": { "concept": "ifrs-full:DilutedEarningsLossPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-775": { "value": "
29\u00a0 Dividend per ordinary share
Dividends to shareholders of the parent
Per ordinary share (in EUR)
Total (in EUR million)
Dividends on ordinary shares:
In respect of 2021
- Interim dividend, paid October 2021
0.21
820
- Final dividend
0.41
1,548
Total dividend in respect of 2021
0.62
2,368
In respect of 2022
- Interim dividend, paid August 2022
0.17
636
- Final dividend, paid May 2023
0.389
1,408
Total dividend in respect of 2022
0.559
2,044
In respect of 2023
- Interim dividend declared, paid August 2023
0.35
1,260
- Final dividend declared
0.756
2,500
Total dividend in respect of 2023
1.106
3,760
On 24\u00a0April 2023, the Annual General Meeting of shareholders ratified the total dividend of EUR 0.559 per
ordinary share of which EUR 0.17 per share was paid as an interim cash dividend during August 2022. The
final dividend of EUR 0.389 per ordinary share was paid entirely in cash.
In 2023, no other cash distributions were paid to shareholders of ING Group (2022: EUR 1,171 million, EUR
0.31 per share; 2021: EUR 1,054 million, EUR 0.27 per share).
ING Groep N.V. is required to withhold tax of 15% on dividends paid.
Reference is made to Note 19 'Equity' for further information on share buyback programmes and other
distributions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-776": { "value": "0.756", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-777": { "value": "2500000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-778": { "value": "
30\u00a0 Segments
ING Group\u2019s segments are based on the internal reporting structure by lines of business.
The Executive Board of ING Group and the Management Board Banking (together the Chief Operating
Decision Maker (CODM)) set the performance targets, approve and monitor the budgets prepared by the
business lines. Business lines formulate strategic, commercial, and financial plans in conformity with the
strategy and performance targets set by the CODM.
Recognition and measurement of segment results are in line with the accounting policies as described in
Note 1 'Basis of preparation and material accounting policy information'. The results for the period for each
reportable segment are after intercompany and intersegment eliminations and are those reviewed by the
CODM to assess performance of the segments. Corporate expenses are allocated to business lines based on
time spent by head office personnel, the relative number of staff, or on the basis of income, expenses and/or
assets of the segment.
The following table specifies the segments by line of business and main sources of income of each of the
segments:
Specification of the main sources of income of each of the segments by line of business
Segments by line of business
Main source of income
Retail Netherlands
(Market Leaders)
Income from retail and private banking activities in the Netherlands,
including the Business Banking segments. The main products offered are
current and savings accounts, business lending, mortgages and other
consumer lending.
Retail Belgium
(Market Leaders)
Income from retail and private banking activities in Belgium and
Luxembourg, including the Business Banking segments. The main products
offered are similar to those in the Netherlands.
Retail Germany
(Challengers and Growth Markets)
Income from retail and private banking activities in Germany, including the
Business Banking segments. The main products offered are similar to those
in the Netherlands.
Retail Other
(Challengers and Growth Markets)
Income from retail banking activities in the rest of the world, including the
Business Banking segments in specific geographies. The main products
offered are similar to those in the Netherlands.
Wholesale Banking
Income from wholesale banking activities. The main products are: lending,
payments & cash management, working capital solutions, trade finance,
financial markets, corporate finance and treasury.
Specification of geographical split of the segments
Geographical split of the segments
Main countries
The Netherlands
Belgium
Including Luxembourg
Germany 1,4
Other Challengers 1,2,4
Australia, Italy, Spain and Portugal
Growth Markets 2,3,4
Poland, Romania and T\u00fcrkiye
Wholesale Banking Rest of World 4
UK, Ireland & Middle East, Americas, Asia and other countries in Europe
Other 3
Corporate Line
1 Retail Banking Austria (included in Germany) and Retail Banking Czech Republic (included in Other Challengers) up to and including
\u00a0 2021, after which ING left the retail markets.
2 In 2022, ING discontinued its retail activities in France and the Philippines.
3 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer from Retail Banking Growth
\u00a0 \u00a0 Markets to Other (Corporate Line). Comparatives have been adjusted.
4 As from 2023, Wholesale Banking in France as well as Wholesale Banking in the Philippines are recorded in Wholesale Banking Rest of
\u00a0 World. Previously these financials were reported in Other Challengers and Growth Markets respectively. Comparatives have been
\u00a0 adjusted. As from 2022, Wholesale Banking Austria as well as Wholesale Banking Czech Republic are recorded in Wholesale Banking
\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Rest of World. Previously these financials were reported in Germany and Other Challengers respectively.
ING Group monitors and evaluates the performance of ING Group at a consolidated level and by segment.
The Executive Board and the Management Board Banking consider this to be relevant to an understanding
of the Group\u2019s financial performance, because it allows investors to understand the primary method used
by management to evaluate the Group\u2019s operating performance and make decisions about allocating
resources.
ING Group reconciles the total segment results to the total result using Corporate Line. The Corporate Line
reflects capital management activities, as ING Group applies a system of capital charging for its banking
operations in order to create a comparable basis for the results of business units globally, irrespective of the
business units\u2019 book equity and the currency they operate in.
As from 2022, results in the Corporate Line have been impacted by the application of hyperinflation
accounting in the consolidation of our subsidiary in T\u00fcrkiye (IAS 29). Following a change in governance, the
Asian stakes (our investments in Bank of Beijing and TMBThanachart Bank (TTB)) are reported in Corporate
Line as of 2023 (with a profit before tax of \u20ac185 million), whereas previously they were reported in Retail
Other. Comparable data have been adjusted accordingly. Furthermore, Corporate Line includes certain other
income and expenses that are not allocated to the banking businesses.
Total income for Corporate Line in 2023 amounted to EUR 450 million compared with EUR 84 million in 2022.
This included a hyperinflation accounting impact of EUR -179 million in 2023 versus EUR -279 million in
2022. Excluding hyperinflation accounting impact, total income rose by EUR 266 million, mainly attributable
to higher income from Treasury activities and because 2022 had included EUR -165 million impact for
impairments on our stake in TTB.
Operating expenses for Corporate Line were EUR 542 million, 1.3% up from EUR 535 million in 2022.
Expenses in 2023 included a hyperinflation impact of EUR 48 million and EUR 51 million that was
provisioned, while 2022 had included a hyperinflation impact of EUR 30 million and a EUR 32 million
impairment loss related to the goodwill allocated to T\u00fcrkiye.
The information presented in this note is in line with the information presented to the Executive Board of
ING Group and Management Board Banking.
This note does not provide information on the types of products and services from which each reportable
segment derives its revenues, as this is not reported internally and is therefore not readily available.
ING Group Total
12 month period
2023
2022
2021
in EUR million
ING Bank
Other
Total ING Group
ING Bank
Other
Total ING Group
ING Bank
Other
Total ING Group
Income
\u2013 Net interest income
15,809
166
15,976
13,745
11
13,756
13,615
13,615
\u2013 Net fee and commission income
3,586
9
3,595
3,586
3,586
3,517
3,517
\u2013 Total investment and other income
3,006
-1
3,005
1,215
4
1,219
1,354
5
1,359
Total income
22,401
174
22,575
18,546
16
18,561
18,485
5
18,490
Expenditure
\u2013 Operating expenses
11,563
1
11,564
11,193
6
11,199
11,195
-3
11,192
\u2013 Addition to loan loss provisions
520
520
1,861
1,861
516
516
Total expenses
12,083
1
12,084
13,053
6
13,060
11,711
-3
11,708
Result before taxation
10,318
173
10,492
5,493
9
5,502
6,774
8
6,782
Taxation
2,926
44
2,970
1,723
2
1,725
1,876
1
1,877
Non-controlling interests
235
235
102
102
128
128
Net result IFRS attributable to shareholder of the parent
7,157
129
7,287
3,667
7
3,674
4,770
7
4,776
Segments by line of business
12 month period
2023
2022
2021
in EUR million
Retail
Nether-
lands
Retail
Belgium
Retail
Germany
Retail
Other
Wholesale
Banking
Corporate
Line
Total
Retail
Nether-
lands
Retail
Belgium
Retail
Germany
Retail
Other 1,2
Wholesale
Banking
Corporate
Line 1
Total
Retail
Nether-
lands
Retail
Belgium
Retail
Germany 3
Retail
Other
1,2,3
Wholesale
Banking
Corporate
Line 1
Total
Income
\u2013 Net interest income
3,096
2,063
2,862
3,437
4,028
489
15,976
2,888
1,668
1,666
2,725
4,260
550
13,756
3,290
1,747
1,447
2,709
4,151
270
13,615
\u2013 Net fee and
commission income
959
502
357
519
1,259
-1
3,595
892
511
437
535
1,217
-6
3,586
771
519
497
530
1,197
3
3,517
\u2013 Total investment and
other income
945
117
-67
277
1,771
-38
3,005
417
-32
69
377
849
-460
1,219
201
209
65
202
568
114
1,359
Total income
5,001
2,683
3,152
4,233
7,057
450
22,575
4,196
2,147
2,172
3,637
6,325
84
18,561
4,262
2,475
2,009
3,441
5,916
387
18,490
Expenditure
\u2013 Operating expenses
2,135
1,852
1,243
2,479
3,313
542
11,564
2,115
1,786
1,140
2,509
3,114
535
11,199
2,403
1,667
1,174
2,442
2,926
580
11,192
\u2013 Addition to loan loss
provisions
5
169
119
313
-92
5
520
67
139
131
302
1,220
2
1,861
-76
225
49
202
117
516
Total expenses
2,140
2,022
1,362
2,792
3,222
547
12,084
2,182
1,924
1,271
2,812
4,334
537
13,060
2,326
1,892
1,223
2,644
3,042
580
11,708
Result before taxation
2,861
661
1,790
1,441
3,836
-97
10,492
2,014
223
901
825
1,991
-453
5,502
1,936
583
786
797
2,874
-193
6,782
Taxation
740
182
631
359
900
158
2,970
540
72
202
254
581
76
1,725
499
146
252
209
703
68
1,877
Non-controlling interests
174
61
235
3
47
52
1
102
4
98
26
128
Net result IFRS
2,121
479
1,159
908
2,875
-255
7,287
1,474
151
696
525
1,358
-530
3,674
1,437
437
529
490
2,144
-261
4,776
1 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer from Retail Other to Corporate Line. Historical figures have been adjusted.
2 In 2022, ING discontinued its retail activities in France and the Philippines.
3 In 2021, ING exited from the retail banking markets in Austria and the Czech Republic.
Geographical split of the segments
12 month period
2023
2022
2021
in EUR million
Nether-
lands
Belgium
Ger-
many
Other
Challen
gers
Growth
markets
Wholesale
Banking
Rest of
World
Other
Total
Nether-
lands
Belgium
Ger-
many
Other
Challen
gers 1,3
Growth
markets
1,2,3
Wholesale
Banking
Rest of
World 1
Other 2
Total
Nether-
lands
Belgium
Ger-
many 4
Other
Challen
gers 1,3,4
Growth
markets
1,2,3
Wholesale
Banking
Rest of
World 1
Other 2
Total
Income
\u2013 Net interest income
3,773
2,712
3,375
2,121
1,961
1,548
486
15,976
3,782
2,065
2,126
1,842
1,462
1,933
546
13,756
4,068
2,109
1,938
1,679
1,528
2,021
271
13,615
\u2013 Net fee and
commission income
1,239
715
400
285
384
573
-1
3,595
1,171
714
494
290
375
548
-6
3,586
1,070
717
523
300
351
553
3
3,517
\u2013 Total investment
and other income
1,627
145
-81
21
487
829
-25
3,005
577
-14
94
182
386
449
-455
1,219
314
265
118
64
289
196
113
1,359
Total income
6,639
3,573
3,694
2,427
2,833
2,950
460
22,575
5,531
2,765
2,714
2,314
2,223
2,930
84
18,561
5,452
3,092
2,578
2,043
2,168
2,770
387
18,490
Expenditure
\u2013 Operating expenses
3,065
2,195
1,437
1,320
1,495
1,509
544
11,564
3,001
2,120
1,318
1,380
1,426
1,418
536
11,199
3,279
1,960
1,339
1,449
1,254
1,332
580
11,192
\u2013 Addition to loan loss
provisions
-111
139
35
166
189
96
5
520
181
230
460
140
230
618
2
1,861
28
184
118
84
110
-8
516
Total expenses
2,954
2,334
1,472
1,486
1,683
1,605
549
12,084
3,182
2,350
1,778
1,519
1,657
2,036
538
13,060
3,307
2,143
1,457
1,533
1,363
1,324
580
11,708
Result before
taxation
3,685
1,239
2,222
941
1,149
1,345
-89
10,492
2,349
415
936
795
567
894
-454
5,502
2,145
948
1,121
511
804
1,446
-193
6,782
Retail Banking
2,861
661
1,790
649
792
6,753
2,014
223
901
547
278
3,964
1,936
583
786
206
590
4,101
Wholesale Banking
824
577
432
292
357
1,345
8
3,836
335
192
34
248
288
894
1,991
209
365
336
304
214
1,446
2,874
Corporate Line
-97
-97
-453
-453
-193
-193
Result before
taxation
3,685
1,239
2,222
941
1,149
1,345
-89
10,492
2,349
415
936
795
567
894
-454
5,502
2,145
948
1,121
511
804
1,446
-193
6,782
Taxation
909
349
723
282
225
335
148
2,970
658
114
297
258
153
186
60
1,725
556
240
358
156
174
326
67
1,877
Non-controlling
interests
234
235
3
98
1
102
4
124
128
Net result IFRS
2,776
889
1,499
659
690
1,011
-237
7,287
1,691
301
636
537
316
708
-515
3,674
1,589
708
759
355
506
1,120
-260
4,776
1 As from 2023, Wholesale Banking in France as well as Wholesale Banking in the Philippines are recorded in Wholesale Banking Rest of World. Previously the financials of Wholesale Banking in France and Wholesale Banking in the Philippines were reported in Other Challengers
and Growth Markets respectively. Historical figures have been adjusted.
2 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer form Growth Markets to Other (Corporate Line). Historical figures have been adjusted.
3 In 2022, ING discontinued its retail activities in France and the Philippines.
4 In 2021, ING exited from the retail banking markets in Austria (included in Germany) and the Czech Republic (included in Other Challengers).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-779": { "value": "
34\u00a0 Taxation
Statement of financial position \u2013 Deferred tax
Deferred taxes are recognised on all temporary differences under the liability method using tax rates
applicable in the jurisdictions in which ING Group is subject to taxation.
Changes in deferred tax
in EUR million
2023
Net
liability\u00a0(-)
Net asset\u00a0(+)
opening
balance
Change
through
equity
Change
through
net\u00a0result
Exchange
rate
differences
Changes in the
composition of
the group and
other changes
Net
liability\u00a0(-)
Net asset\u00a0(+)
ending
balance
Financial assets at FVOCI
80
-10
-3
-4
63
Financial assets and liabilities at FVPL
28
-44
13
-3
Depreciation
-13
-6
3
4
-13
Cash flow hedges
752
-251
1
502
Pension and post-employment
benefits
-54
31
-7
-4
-33
Other provisions
59
-12
-3
4
48
Loans and advances
612
8
-140
-6
2
475
Unused tax losses carried forward
327
-128
11
-1
209
Other
-251
13
90
-2
-4
-154
1,539
-209
-249
10
5
1,096
Presented in the statement of
financial position as:
\u2013\u00a0 Deferred tax liabilities
-257
-184
\u2013\u00a0 Deferred tax assets
1,796
1,280
1,539
1,096
The above table shows netted deferred tax amounts related to right-of-use assets and lease liabilities
included in the row \u2018Other\u2019, and includes a deferred tax amount for right-of-use assets of EUR 195 million
(2022: EUR 205 million and 2021: EUR 220 million) and a deferred tax amount for lease liabilities of EUR 217
million (2022: EUR 231 million and 2021: EUR 252 million).
Financial assets and liabilities at FVPL changes through net result in 2023 (EUR -44 million) and 2022 (EUR
-88 million) relates to the decrease in fair value of derivatives due to increased interest yield curves.
The deferred tax on cash flow hedges relate to floating rate lending with interest rate swaps. Due to
decreased (longer-term) interest rate yield curve in 2023 there was a positive revaluation of the cash flow
hedge through other comprehensive income. This resulted in a decline in the deferred tax asset by EUR
-251 million compared to the increase in deferred tax assets in 2022 by EUR 875 million due to the increase
in the interest yield curve. The deferred tax asset in cash flow hedges decreased from EUR 752 million in
2022 to EUR 502 million in 2023.
The deferred tax on Loans and advances changes through net result in 2023 EUR -140\u00a0million (2022: EUR
177\u00a0 million) relates mainly to valuation changes of collectively assessed expected credit losses.
The deferred tax\u00a0 changes through equity - Other in 2023 of EUR 13\u00a0million (2022:EUR -123 million) is due to
FX developments following the USD depreciation and the application of IAS 29 Hyperinflation in T\u00fcrkiye, and
also due to the decline in the Credit liability Reserve due to credit spread tightening.\u00a0 \u00a0
Changes in deferred tax
in EUR million
2022
Net
liability\u00a0(-)
Net asset\u00a0(+)
opening
balance
Change
through
equity
Change
through
net\u00a0result
Exchange
rate
differences
Changes in the
composition of
the group and
other changes
Net
liability\u00a0(-)
Net asset\u00a0(+)
ending
balance
Financial assets at FVOCI
-70
148
5
-3
80
Financial assets and liabilities at FVPL
107
-88
9
28
Depreciation
-7
-5
-2
-13
Cash flow hedges
-126
875
2
752
Pension and post-employment
benefits
-49
6
-13
8
-7
-54
Other provisions
19
44
-4
59
Loans and advances
430
177
-3
7
612
Unused tax losses carried forward
199
137
-8
327
Other
-148
-123
26
-6
-251
Total
354
907
283
-5
0
1,539
Presented in the statement of
financial position as:
\u2013\u00a0 deferred tax liabilities
-603
-257
\u2013\u00a0 deferred tax assets
957
1,796
354
1,539
Deferred tax in connection with unused tax losses carried forward
in EUR million
2023
2022
Total unused tax losses carried forward
1,870
2,668
Unused tax losses carried forward not recognised as a deferred tax asset
815
937
Unused tax losses carried forward recognised as a deferred tax asset
1,055
1,731
Average tax rate
19.9%
21.1%
Deferred tax asset
209
365
Total unused tax losses carried forward analysed by expiry terms
No deferred tax
asset recognised
Deferred tax asset
recognised
in EUR million
2023
2022
2023
2022
Within 1 year
591
More than 1 year but less than 5 years
126
120
633
587
More than 5 years but less than 10 years
9
9
2
2
More than 10 years but less than 20 years
Unlimited
681
808
421
550
815
937
1,055
1,731
The above-mentioned deferred tax asset of EUR 209 million (2022 : EUR 365 million) and the related unused
tax losses carried forward exclude the recapture of tax losses originated in the United Kingdom previously
deducted in the Netherlands for the amount of EUR 0 million (2022 EUR 37 million).
Deferred tax assets are recognised for temporary deductible differences, for tax losses carried forward and
unused tax credits only to the extent that realisation of the related tax benefit is probable.
Breakdown of certain net deferred tax asset positions by jurisdiction
in EUR million
2023
2022
Poland
244
391
France
0
70
Slovakia
1
0
China
2
0
Australia
1
0
Hong Kong
8
6
United States of America
1
T\u00fcrkiye
41
7
Taiwan
11
8
308
483
The table above includes a breakdown of certain net deferred tax asset positions by jurisdiction for which
the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising
from the reversal of existing taxable temporary differences whilst the related entities have incurred losses in
either the current or the preceding year.
In 2023, ING Bank Slaski (Poland) realised a tax profit following the value changes of the cash flow hedge
derivatives which are settled net via a central clearing party, whereas in 2022 and 2021 ING Bank Slaski
incurred a tax loss following the large value changes of the cash flow hedge derivatives. This tax loss can be
carried forward for five years. Based on a taxable profit forecast, ING considers it probable that the future
taxable profits will compensate for this tax loss carry forward position. Based on this a remaining deferred
tax asset on unused tax losses carried forward, as per 31 December 2023: EUR 120 million (2022: EUR 224
million) is recognised. The remaining net deferred tax asset in Poland of EUR 124 million (2022: EUR 167
million) relates to temporary tax differences on loans and advances and financial assets at fair value
through profit and loss.
Recognition is based on the fact that it is probable that the entity will have taxable profits and/or can utilise
tax planning opportunities before expiration of the deferred tax assets. Changes in circumstances in future
periods may adversely impact the assessment of the recoverability. The uncertainty of the recoverability is
taken into account in establishing the deferred tax assets.
At 31 December 2022 and 2023, ING Group had no significant temporary differences associated with the
parent company\u2019s investments in subsidiaries and associates as any economic benefit from those
investments will not be taxable at parent company level.
Statement of profit or loss \u2013 Taxation
Taxation by type
Netherlands
Rest of the world
Total
in EUR million
2023
2022
2021
2023
2022
2021
2023
2022
2021
Current taxation
601
498
459
2,121
1,510
1,448
2,722
2,008
1,908
Deferred taxation
-45
-79
47
293
-204
-78
249
-283
-30
556
419
506
2,414
1,306
1,371
2,970
1,725
1,877
Reconciliation of the weighted average statutory income tax rate to ING Group\u2019s effective income tax
rate
in EUR million
2023
2022
2021
Result before tax from continuing operations
10,492
5,502
6,782
Weighted average statutory tax rate
25.5%
24.8%
24.3%
Weighted average statutory tax amount
2,678
1,365
1,645
Permanent differences affecting current tax
Participation exemption
-43
-64
-68
Other income not subject to tax
-68
-40
-32
Expenses not deductible for tax purposes
398
403
201
Current tax from previously unrecognised amounts
1
10
51
State and local taxes
99
68
64
Adjustments to prior periods
-72
-29
-12
Differences affecting deferred tax
Impact on deferred tax from change in tax rates
2
5
9
Deferred tax benefit from previously unrecognised amounts
-30
-3
-18
Write-off/reversal of deferred tax assets
4
10
37
Effective tax amount
2,970
1,725
1,877
Effective tax rate
28.3%
31.4%
27.7%
The weighted average statutory tax rate in 2023 (25.5%) increased compared to that of 2022 (24.8% ).
The effective tax rate of 28.3% in 2023 is higher than the weighted average statutory tax rate. This is mainly
caused by the impact in 2023 of the following non-deductible items for income tax purposes: hyperinflation
accounting loss in T\u00fcrkiye, interest expenses, bank- and local taxes in various countries. Adjustments to
prior periods mainly relates to a tax refund in Spain regarding previous years.
The weighted average statutory tax rate in 2022 (24.8%) was higher than the rate of 24.3% in 2021.
The effective tax rate of 31.4% in 2022 was higher than the weighted average statutory tax rate. This is
mainly caused by the impact in 2022 of the following non-deductible items income tax purposes:
hyperinflation accounting loss in T\u00fcrkiye, impairments on TTB, and interest expenses in various countries.
The effective tax rate of 27.7% in 2021 was significantly higher than the weighted average statutory tax
rate. This is mainly caused by a high amount of expenses non-deductible for tax purposes like the non-
deductible bank tax and a tax charge caused by the recapture of tax losses originated in the United
Kingdom but previously deducted in the Netherlands.
Equity - Other comprehensive income
Income tax related to components of other comprehensive income
in EUR million
2023
2022
2021
Unrealised revaluations financial assets at fair value through other comprehensive
income and other revaluations
-7
140
14
Realised gains/losses transferred to the statement of profit or loss (reclassifications
from equity to profit or loss)
-3
8
12
Changes in cash flow hedge reserve
-251
875
233
Remeasurement of the net defined benefit asset/liability
31
6
-54
Changes in fair value of own credit risk of financial liabilities at fair value through
profit or loss
2
19
-8
Exchange rate differences and other
19
-141
-77
Total income tax related to components of other comprehensive income
-209
907
120
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-780": { "value": "
Statement of financial position \u2013 Deferred tax
Deferred taxes are recognised on all temporary differences under the liability method using tax rates
applicable in the jurisdictions in which ING Group is subject to taxation.
Changes in deferred tax
in EUR million
2023
Net
liability\u00a0(-)
Net asset\u00a0(+)
opening
balance
Change
through
equity
Change
through
net\u00a0result
Exchange
rate
differences
Changes in the
composition of
the group and
other changes
Net
liability\u00a0(-)
Net asset\u00a0(+)
ending
balance
Financial assets at FVOCI
80
-10
-3
-4
63
Financial assets and liabilities at FVPL
28
-44
13
-3
Depreciation
-13
-6
3
4
-13
Cash flow hedges
752
-251
1
502
Pension and post-employment
benefits
-54
31
-7
-4
-33
Other provisions
59
-12
-3
4
48
Loans and advances
612
8
-140
-6
2
475
Unused tax losses carried forward
327
-128
11
-1
209
Other
-251
13
90
-2
-4
-154
1,539
-209
-249
10
5
1,096
Presented in the statement of
financial position as:
\u2013\u00a0 Deferred tax liabilities
-257
-184
\u2013\u00a0 Deferred tax assets
1,796
1,280
1,539
1,096
The above table shows netted deferred tax amounts related to right-of-use assets and lease liabilities
included in the row \u2018Other\u2019, and includes a deferred tax amount for right-of-use assets of EUR 195 million
(2022: EUR 205 million and 2021: EUR 220 million) and a deferred tax amount for lease liabilities of EUR 217
million (2022: EUR 231 million and 2021: EUR 252 million).
Financial assets and liabilities at FVPL changes through net result in 2023 (EUR -44 million) and 2022 (EUR
-88 million) relates to the decrease in fair value of derivatives due to increased interest yield curves.
The deferred tax on cash flow hedges relate to floating rate lending with interest rate swaps. Due to
decreased (longer-term) interest rate yield curve in 2023 there was a positive revaluation of the cash flow
hedge through other comprehensive income. This resulted in a decline in the deferred tax asset by EUR
-251 million compared to the increase in deferred tax assets in 2022 by EUR 875 million due to the increase
in the interest yield curve. The deferred tax asset in cash flow hedges decreased from EUR 752 million in
2022 to EUR 502 million in 2023.
The deferred tax on Loans and advances changes through net result in 2023 EUR -140\u00a0million (2022: EUR
177\u00a0 million) relates mainly to valuation changes of collectively assessed expected credit losses.
The deferred tax\u00a0 changes through equity - Other in 2023 of EUR 13\u00a0million (2022:EUR -123 million) is due to
FX developments following the USD depreciation and the application of IAS 29 Hyperinflation in T\u00fcrkiye, and
also due to the decline in the Credit liability Reserve due to credit spread tightening.\u00a0 \u00a0
Changes in deferred tax
in EUR million
2022
Net
liability\u00a0(-)
Net asset\u00a0(+)
opening
balance
Change
through
equity
Change
through
net\u00a0result
Exchange
rate
differences
Changes in the
composition of
the group and
other changes
Net
liability\u00a0(-)
Net asset\u00a0(+)
ending
balance
Financial assets at FVOCI
-70
148
5
-3
80
Financial assets and liabilities at FVPL
107
-88
9
28
Depreciation
-7
-5
-2
-13
Cash flow hedges
-126
875
2
752
Pension and post-employment
benefits
-49
6
-13
8
-7
-54
Other provisions
19
44
-4
59
Loans and advances
430
177
-3
7
612
Unused tax losses carried forward
199
137
-8
327
Other
-148
-123
26
-6
-251
Total
354
907
283
-5
0
1,539
Presented in the statement of
financial position as:
\u2013\u00a0 deferred tax liabilities
-603
-257
\u2013\u00a0 deferred tax assets
957
1,796
354
1,539
Deferred tax in connection with unused tax losses carried forward
in EUR million
2023
2022
Total unused tax losses carried forward
1,870
2,668
Unused tax losses carried forward not recognised as a deferred tax asset
815
937
Unused tax losses carried forward recognised as a deferred tax asset
1,055
1,731
Average tax rate
19.9%
21.1%
Deferred tax asset
209
365
Total unused tax losses carried forward analysed by expiry terms
No deferred tax
asset recognised
Deferred tax asset
recognised
in EUR million
2023
2022
2023
2022
Within 1 year
591
More than 1 year but less than 5 years
126
120
633
587
More than 5 years but less than 10 years
9
9
2
2
More than 10 years but less than 20 years
Unlimited
681
808
421
550
815
937
1,055
1,731
The above-mentioned deferred tax asset of EUR 209 million (2022 : EUR 365 million) and the related unused
tax losses carried forward exclude the recapture of tax losses originated in the United Kingdom previously
deducted in the Netherlands for the amount of EUR 0 million (2022 EUR 37 million).
Deferred tax assets are recognised for temporary deductible differences, for tax losses carried forward and
unused tax credits only to the extent that realisation of the related tax benefit is probable.
Breakdown of certain net deferred tax asset positions by jurisdiction
in EUR million
2023
2022
Poland
244
391
France
0
70
Slovakia
1
0
China
2
0
Australia
1
0
Hong Kong
8
6
United States of America
1
T\u00fcrkiye
41
7
Taiwan
11
8
308
483
The table above includes a breakdown of certain net deferred tax asset positions by jurisdiction for which
the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising
from the reversal of existing taxable temporary differences whilst the related entities have incurred losses in
either the current or the preceding year.
In 2023, ING Bank Slaski (Poland) realised a tax profit following the value changes of the cash flow hedge
derivatives which are settled net via a central clearing party, whereas in 2022 and 2021 ING Bank Slaski
incurred a tax loss following the large value changes of the cash flow hedge derivatives. This tax loss can be
carried forward for five years. Based on a taxable profit forecast, ING considers it probable that the future
taxable profits will compensate for this tax loss carry forward position. Based on this a remaining deferred
tax asset on unused tax losses carried forward, as per 31 December 2023: EUR 120 million (2022: EUR 224
million) is recognised. The remaining net deferred tax asset in Poland of EUR 124 million (2022: EUR 167
million) relates to temporary tax differences on loans and advances and financial assets at fair value
through profit and loss.
Recognition is based on the fact that it is probable that the entity will have taxable profits and/or can utilise
tax planning opportunities before expiration of the deferred tax assets. Changes in circumstances in future
periods may adversely impact the assessment of the recoverability. The uncertainty of the recoverability is
taken into account in establishing the deferred tax assets.
At 31 December 2022 and 2023, ING Group had no significant temporary differences associated with the
parent company\u2019s investments in subsidiaries and associates as any economic benefit from those
investments will not be taxable at parent company level.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-781": { "value": "
35\u00a0 Fair value of assets and liabilities
a) Valuation Methods
The estimated fair values represent the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. It is a market-
based measurement, which is based on assumptions that market participants would use and takes into
account the characteristics of the asset or liability that market participants would take into account when
pricing the asset or liability.
Fair values of financial assets and liabilities are based on quoted prices in active market where available.
When such quoted prices are not available, the fair value is determined by using valuation techniques.
In 2023, the financial markets were characterised by elevated levels of volatility. In the first quarter of the
year, the markets worldwide were shaken by the demise of SVB bank and the stress surrounding Credit
Suisse, fuelling uncertainty around possible additional defaults. Furthermore, the ongoing interest rate hikes
by the central banks in Europe and the US led to a fast increase in rates worldwide. Towards the end of the
year, the probability increased for interest rates to go down, which has been reflected in the forward
interest rates. Additionally, geopolitical risk increased with the Israel-Gaza conflict adding to the risk arising
from the ongoing Russia-Ukraine war.
Financial assets and liabilities, including Level 3, are valued using agreed methodologies, targeting the most
appropriate estimate of fair value.
b) Valuation control framework
The valuation control framework covers the product approval process (PARP), pricing, market data
assessment and independent price verification (IPV), valuation adjustments, model use, fair value hierarchy
and day one profit or loss. Valuation processes are governed by various governance bodies, including Local
Parameter Committees, Global Valuation and Impairment Committee, Market Data Committee and
Valuation Model Committee. All relevant committees meet on a regular basis (monthly/quarterly), where
agenda covers the aforementioned valuation controls.
The Global Valuation and Impairment Committee is responsible for the oversight and the approval of the
outcome of impairments (other than loan loss provisions) and valuation processes. It oversees the quality
and coherence of valuation methodologies and performance. The Valuation Model Committee is responsible
for the approval of all valuation models used for the Fair valuation (IFRS) and Prudent Valuation (CRR) of
positions measured at fair value. The Local Parameter Committee discusses the valuation results and
monitors the performance of the valuation activities carried out on local or regional level. The Global
Financial Markets Parameter Committee reviews the consolidated valuation outcome and resulting P&L for
Financial Market products, targeting a globally consistent treatment across Financial Market. The Market
Data Committee is responsible for the approval of the market data used in valuation.\u00a0
c) Valuation Adjustments
Valuation adjustments are an integral part of the fair value. They are the adjustments to the output from a
valuation technique in order to appropriately determine a fair value in accordance with IFRS13. ING
considers various fair value adjustments including Bid-Offer adjustments, Model Risk adjustments, Bilateral
Valuation Adjustments (BVA, consisting of Credit Valuation Adjustments or CVA, and Debit valuation
Adjustments or DVA), Collateral Valuation Adjustment (CollVA) and Funding Valuation Adjustment (FVA).
For financial instruments where the fair value at initial recognition is based on one or more significant
unobservable inputs, a difference between the transaction price and the fair value resulting from the
internal valuation process can occur. Such difference is referred to as Day One Profit or Day One Loss
(hereafter: DOP). ING defers material Day One Profit or Loss of instruments with significant unobservable
valuation inputs, which are the financial instruments classified as Level 3 and financial instruments with
material unobservable inputs into CVA which are not necessarily classified as Level 3. The DOP is amortised
over the life of the instrument, or until the significant unobservable inputs become observable, or until the
significant unobservable inputs become non-significant. Both the impact on the profit and loss in 2023 and
the DOP reserve is disclosed in the below table.
Deferred Day One Profit or Loss Reserve
The table below summarizes the movement in the aggregate DOP not recognised when financial
instruments were initially recognised, because of the use of valuation techniques for which not all the inputs
were market observable data.
Deferred day one profit or loss reserve
in EUR million
2023
2022
Opening balance at 1 January
-108
-7
DOP deferred on new transactions during the period
-83
-107
DOP recognised in the statement of profit or loss during the period:
\u2022 of which release
85
6
\u2022 of which amortisation and exchange differences
15
0
Closing balance at 31 December
-90
-108
The following table presents the models reserves for financial assets and liabilities.
Valuation adjustment reserves on financial assets and liabilities
in EUR million
2023
2022
Deferred Day One Profit or Loss
-90
-108
Own credit adjustments
34
75
Bid/Offer
-154
-216
Model Risk
-26
-13
CVA
-131
-192
DVA
55
99
CollVA
-4
-8
FVA
-68
-78
Total Valuation Adjustments
-385
-441
Own Credit Adjustment
Own issued debt and structured notes that are designated at fair value through profit or loss are adjusted
for ING`s own credit risk by means of DVA.
Bid-Offer Adjustment
For positions priced based upon mid-market input parameters, Bid-Offer adjustments are required in order
to reflect the valuation of that position based on bid price or offer price. In practice this adjustment accounts
for the difference in valuation from \u2018mid to bid\u2019 and \u2018mid to offer\u2019 for long and short exposures respectively.
In principle assets are valued at the bid prices and liabilities are valued at the offer price. For certain assets
or liabilities, where a market quoted price is not available, the price used is the fair value that is most
representative within the bid-offer spread.
Model Risk Adjustment
Financial instruments that are valued using a valuation model can be subject to model risk. Model risk is the
risk of possible financial loss resulting from pricing model or model-based parameter deficiencies and/or
uncertainties.
Bilateral Valuation Adjustments (Credit and Debit Valuation Adjustments)\u00a0
Bilateral Valuation Adjustment is the valuation adjustment reflecting the counterparty credit risk of
derivative contracts. It has a bilateral nature, where both the counterparty\u2019s credit risk (i.e. Credit Valuation
Adjustment or CVA) and ING\u2019s own credit risk (Debit Valuation Adjustment or DVA) are taken into account:
\u2022 CVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
the counterparty defaults (i.e. it is the market value of the counterparty\u2019s credit risk).
\u2022 DVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
ING defaults (i.e. it is the market value of ING\u2019s credit risk).
The calculation of CVA and DVA on derivatives is based on their expected exposures, the counterparties\u2019 and
ING\u2019s risk of default, taking into account the collateral agreements as well as netting agreements. The
counterparties\u2019 risk of default is measured by probability of default and expected loss given default, which is
based on market information including credit default swap (CDS) spreads. Where counterparty CDS spreads
are not available, relevant proxy spreads are used. Additionally, wrong-way risk (which occurs when the
probability of default by the counterparty increases (decreases) when ING\u2019s exposure to the counterparty
increases (decreases)) and right-way risk (which occurs when the probability of default by the counterparty
increases (decreases) when ING\u2019s exposure to the counterparty decreases (increases)) are included in the
adjustment.
Collateral Valuation Adjustment (CollVA)
Collateral Valuation Adjustment is a fair valuation adjustment applied on derivative instruments to capture
specific features of CSA (Credit Support Annex) with a counterparty that the regular OIS discounting
framework does not capture. Non-standard CSA features may include deviations in relation to the
currencies in which ING posts or receives collateral, deviations in remuneration rate on collateral which may
pay lower or higher rate than overnight rate or even no interest at all; other deviations can be posting
securities rather than cash as collateral, etc.
Funding Valuation Adjustment (FVA)
Funding Valuation Adjustment (FVA) is a fair valuation adjustment applied on derivative instruments to
address the asymmetry in funding costs or funding benefits between collateralized and uncollateralized
derivatives portfolios. This adjustment is based on the expected exposure profiles of the uncollateralized or
partially collateralized OTC derivatives and market-based funding spreads.
d) Fair value hierarchy
ING Group has categorised its financial instruments that are either measured in the statement of financial
position at fair value or of which the fair value is disclosed, into a three level hierarchy based on the
observability of the valuation inputs. Highest priority is retained to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to valuation techniques supported by
unobservable inputs.
Transfers into and transfers out of fair value hierarchy levels are made on a quarterly basis at the end of the
reporting period.
Level 1 \u2013 (Unadjusted) quoted prices in active markets
This category includes financial instruments whose fair value is determined directly by reference to
(unadjusted) quoted prices in an active market. A financial instrument is regarded as quoted in an active
market if quoted prices are readily and regularly available from an exchange, dealer markets, brokered
markets, or principal to principal markets. Those prices represent actual and regularly occurring market
transactions with sufficient frequency and volume to provide pricing information on an ongoing basis.
Transfers out of Level 1 into Level 2 or Level 3 occur when ING Group establishes that markets are no longer
active and therefore (unadjusted) quoted prices no longer provide reliable pricing information.
Level 2 \u2013 Valuation technique supported by observable inputs
This category includes financial instruments whose fair value is based on market observable inputs, either
directly or indirectly, other than quoted prices included within Level 1. The fair value for financial
instruments in this category can be determined by reference to quoted prices for similar instruments in
active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other
than quoted prices that are observable or market-corroborated inputs. ING analyses how the prices are
derived and determines whether the prices are liquid tradable prices or model-based consensus prices
taking various data as inputs.
For financial instruments that do not have a reference price available, fair value is determined using a
valuation technique (e.g., a model), where inputs in the model are taken from an active market or are
observable, such as interest rates and yield curves observable at commonly quoted intervals, implied
volatilities, and credit spreads.
Instruments, where inputs are unobservable are classified in this category, provided that the impact of
those unobservable inputs on the overall valuation is insignificant. The notion of significant is particularly
relevant for the distinction between Level 2 and Level 3 assets and liabilities, as the significance assessment
of the valuation input on the entire fair value measurement will determine whether the instrument should
be classified as Level 2 or Level 3. Expert judgement is required on the significance assessment approach.
Level 3 \u2013 Valuation technique supported by unobservable inputs
This category includes financial instruments whose fair value is determined using a valuation technique for
which a significant part of the overall valuation is driven by unobservable valuation inputs. Where valuation
inputs are unobservable, the Group must use the best information available to value the instruments. This
may require internally derived inputs taking into account market participants assumptions that are
reasonably available, including assumptions on the risk inherent in a particular valuation technique used to
measure fair value and the risk inherent in the inputs to the valuation technique. Unobservable inputs may
include, among others, volatility, correlation, spreads to discount rates, default rates, recovery rates,
prepayment rates, and certain credit spreads.
Financial instruments at fair value
The fair values of the financial instruments\u00a0 were determined as follows:
Methods applied in determining fair values of financial assets and liabilities (carried at fair value)
Level 1
Level 2
Level 3
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Financial assets at fair value
through profit or loss
- Equity securities
15,438
11,783
3
2
150
156
15,590
11,941
- Debt securities
4,825
1,636
4,081
5,361
3,364
3,450
12,270
10,447
- Derivatives
39
22
27,134
34,229
535
483
27,708
34,734
- Loans and receivables
0
0
63,316
54,097
4,131
2,547
67,446
56,644
20,302
13,441
94,533
93,690
8,179
6,635
123,015
113,766
Financial assets at fair value
through other
comprehensive income
- Equity securities
1,622
1,639
0
0
263
247
1,885
1,887
- Debt securities
35,848
25,644
2,433
3,451
0
0
38,281
29,095
- Loans and receivables
0
0
275
0
676
643
951
643
37,470
27,284
2,707
3,451
938
891
41,116
31,625
Financial liabilities
Financial liabilities at fair
value through profit or loss
\u2013\u00a0 Debt securities
1,088
822
7,635
5,743
47
53
8,770
6,619
\u2013\u00a0 Deposits
0
0
57,063
50,257
13
0
57,076
50,257
\u2013\u00a0 Trading securities
3,604
1,952
41
273
0
1
3,645
2,226
\u2013\u00a0 Derivatives
41
40
24,437
33,200
670
678
25,148
33,917
4,733
2,814
89,175
89,473
729
732
94,638
93,019
The following methods and assumptions were used by ING Group to estimate the fair value of the financial
instruments:
Equity securities
Instrument description: Equity securities include stocks and shares, corporate investments and private
equity investments.
Valuation: If available, the fair values of publicly traded equity securities and private equity securities are
based on quoted market prices. In absence of active markets, fair values are estimated by analysing the
investee\u2019s financial position, result, risk profile, prospect, price, earnings comparisons and revenue multiples.
Additionally, reference is made to valuations of peer entities where quoted prices in active markets are
available. For equity securities best market practice will be applied using the most relevant valuation
method. All non-listed equity investments, including investments in private equity funds, are subject to a
standard review framework which ensures that valuations reflect the fair values.
Fair value hierarchy: The majority of equity securities are publicly traded and quoted prices are readily and
regularly available. Hence, these securities are classified as Level 1.\u00a0 Equity securities which are not traded in
active markets mainly include corporate investments, fund investments and other equity securities and are
classified as Level 3.
Debt securities
Instrument description: Debt securities include government bonds, financial institutions bonds and Asset-
backed securities (ABS).
Valuation: Where available, fair values for debt securities are generally based on quoted market prices.
Quoted market prices are obtained from an exchange market, dealer, broker, industry group, pricing service,
or regulatory service. The quoted prices from non-exchange sources are reviewed on their tradability of
market prices. If quoted prices in an active market are not available, fair value is based on an analysis of
available market inputs, which includes consensus prices obtained from one or more pricing services.
Furthermore, fair values are determined by valuation techniques discounting expected future cash flows
using market interest rate curves, referenced credit spreads, maturity of the investment, and estimated
prepayment rates where applicable.
Fair value hierarchy: Government bonds and financial institutions bonds are generally traded in active
markets, where quoted prices are readily and regularly available and are hence, classified as Level 1. The
remaining positions are classified as Level 2 or Level 3. Asset backed securities for which no active market is
available and a wide discrepancy in quoted prices exists, are classified as Level 3.
Derivatives
Instrument description: Derivatives contracts can either be exchange-traded or over the counter (OTC).
Derivatives include interest rate derivatives, FX derivatives, Credit derivatives, Equity derivatives and
commodity derivatives.
Valuation: The fair value of exchange-traded derivatives is determined using quoted market prices in an
active market and are classified as Level 1 of the fair value hierarchy. For instruments that are not actively
traded, fair values are estimated based on valuation techniques. OTC derivatives and derivatives trading in
an inactive market are valued using valuation techniques. The valuation techniques and inputs depend on
the type of derivatives and the nature of the underlying instruments. The principal techniques used to value
these instruments are based on (amongst others) discounted cash flows, option pricing models and Monte
Carlo simulations. These valuation models calculate the present value of expected future cash flows, based
on \u2018no-arbitrage\u2019 principles. The models are commonly used in the financial industry and inputs to the
validation models are determined from observable market data where possible. Certain inputs may not be
observable in the market, but can be determined from observable prices via valuation model calibration
procedures. These inputs include prices available from exchanges, dealers, brokers or providers of pricing,
yield curves, credit spreads, default rates, recovery rates, dividend rates, volatility of underlying interest
rates, equity prices, and foreign currency exchange rates and reference is made to quoted prices, recently
executed trades, independent market quotes and consensus data, where available.
For uncollateralised OTC derivatives, ING applies Credit Valuation Adjustment to correctly reflect the
counterparty credit risk in the valuation and Debit Valuation Adjustments to reflect the credit risk of ING for
its counterparty. In addition, for these derivatives ING applies Funding Valuation Adjustment. See sections
CVA/DVA and FVA in section c) Valuation Adjustments for more details regarding the calculation.
Fair value hierarchy: The majority of the derivatives are priced using observable inputs and are classified as
Level 2. Derivatives for which the input cannot be implied from observable market data are classified as
Level 3.
Loans and receivables
Instrument description: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables carried at fair value includes
trading loans, being securities lending and similar agreement comparable to collateralised lending,
syndicated loans, loans expected to be sold and receivables with regards to reverse repurchase
transactions.
Valuation: The fair value of loans and receivables is generally estimated by discounting expected future cash
flows using a discount rate that reflects credit risk, liquidity, and other current market conditions. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour.
Fair value hierarchy: Loans and receivables are predominantly classified as Level 2. Loans and receivables
for which current market information about similar assets to use as observable, corroborated data for all
significant inputs into a valuation model is not available, are classified as Level 3.
Financial liabilities at fair value through profit and loss
Instrument description: Financial liabilities at fair value through profit and loss include debt securities, debt
instruments, primarily comprised of structured notes, which are held at fair value under the fair value
option. Besides that, it includes derivative contracts and repurchase agreements.
Valuation: The fair values of securities in the trading portfolio and other liabilities at fair value through profit
or loss are based on quoted market prices, where available. For those securities not actively traded, fair
values are estimated based on internal discounted cash flow valuation techniques using interest rates and
credit spreads that apply to similar instruments.
Fair value hierarchy: The majority of the derivatives and debt instruments are classified as Level 2.
Derivatives and debt instruments for which the input cannot be derived from observable market data are
classified as Level 3.
e) Transfers between Level 1 and 2
As a consequence of change in observable inputs, ING recorded an EUR 2.4 billion transfer from Level 2 to
Level 1 in debt securities measured at fair value through other comprehensive income. Furthermore, EUR
1.7 billion transfers from Level 1 to Level 2 were recorded in the reporting period 2023.
f) Level 3: Valuation techniques and inputs used
Financial assets and liabilities in Level 3 include both assets and liabilities for which the fair value was
determined using (i) valuation techniques that incorporate unobservable inputs as well as (ii) quoted prices
which have been adjusted to reflect that the market was not actively trading at or around the balance sheet
date. Unobservable inputs are inputs which are based on ING\u2019s own assumptions about the factors that
market participants would use in pricing an asset or liability, developed based on the best information
available in the circumstances. Unobservable inputs may include volatility, correlation, spreads to discount
rates, default rates and recovery rates, prepayment rates, and certain credit spreads. Valuation techniques
that incorporate unobservable inputs are sensitive to the inputs used.
Of the total amount of financial assets classified as Level 3 as at 31\u00a0December 2023 of EUR 9.1 billion
(31\u00a0December 2022: EUR 7.5 billion), an amount of EUR 7.0 billion (76.7%) (31\u00a0December 2022: EUR 2.2
billion, being 29.2%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial assets includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 4.2
billion) which relates to financial assets that are part of structures that are designed to be fully neutral in
terms of market risk. Such structures include various financial assets and liabilities for which the overall
sensitivity to market risk is insignificant. Whereas the fair value of individual components of these structures
may be determined using different techniques and the fair value of each of the components of these
structures may be sensitive to unobservable inputs, the overall sensitivity is by design not significant.
The remaining EUR 1.8 billion (31\u00a0December 2022: EUR 1.1 billion of the fair value classified in Level 3
financial assets is established using valuation techniques that incorporates certain inputs that are
unobservable.
Of the total amount of financial liabilities classified as Level 3 as at 31\u00a0December 2023 of EUR 0.7 billion
(31\u00a0December 2022: EUR 0.7 billion), an amount of EUR 0.4 billion (50.0%) (31\u00a0December 2022: EUR 0.02
billion, being 2.5%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING\u2019s own unobservable inputs.
Furthermore, Level 3 financial liabilities includes approximately EUR 0.3 billion (31\u00a0December 2022: EUR 0.6
billion) which relates to financial liabilities that are part of structures that are designed to be fully neutral in
terms of market risk. As explained above, the fair value of each of the components of these structures may
be sensitive to unobservable inputs, but the overall sensitivity is by design not significant.
The remaining EUR 0.1 billion (31\u00a0December 2022: EUR 0.1 billion of the fair value classified in Level 3
financial liabilities is established using valuation techniques that incorporates certain inputs that are
unobservable.
The table below provides a summary of the valuation techniques, key unobservable inputs and the lower
and upper range of such unobservable inputs, by type of Level 3 asset/liability. The lower and upper range
mentioned in the overview represent the lowest and highest variance of the respective valuation input as
actually used in the valuation of the different financial instruments. Amounts and percentages stated are
unweighted. The range can vary from period to period subject to market movements and change in Level\u00a03
position. Lower and upper bounds reflect the variability of Level 3 positions and their underlying valuation
inputs in the portfolio, but do not adequately reflect their level of valuation uncertainty. For valuation
uncertainty assessment, reference is made to section Sensitivity analysis of unobservable inputs (Level 3).
Valuation techniques and range of unobservable inputs (Level 3)
Assets
Liabilities
Valuation techniques
Significant unobservable inputs
Lower range
Upper range
In EUR million
2023
2022
2023
2022
2023
2022
2023
2022
At fair value through profit or loss
Debt securities
3,364
3,447
0
1
Price based
Price (%)
0%
0%
122%
125%
Price (price per share)
97
208
236
208
Present value techniques
Credit spread (bps)
94
60
94
100
Price (%)
n.a.
97%
n.a.
100%
Equity securities
150
156
Price based
Price (price per share)
0
0
5,457
5,457
Loans and advances
2,298
1,485
13
Price based
Price (%)
0%
0%
117%
100%
Present value techniques
Credit spread (bps)
1
2
12
12
(Reverse) repo's
1,832
1,062
Present value techniques
Interest rate (%)
n.a.
3%
n.a.
5%
Structured notes
3
47
53
Price based
Price (%)
88%
84%
96%
107%
Option pricing model
Equity volatility (%)
9%
13%
23%
42%
Equity/Equity correlation
0.8
0.5
0.9
1.0
Equity/FX correlation
-0.2
-0.4
0.6
0.6
Dividend yield (%)
0%
0%
4%
8%
Present value techniques
Credit spreads (bps)
100
96
101
96
Derivatives
\u2013\u00a0\u00a0Rates
283
431
301
476
Option pricing model
Interest rate volatility (bps)
1
49
3
148
Present value techniques
Reset spread (%)
n.a.
0%
n.a.
1%
Interest rate (%)
n.a.
2%
n.a.
2%
Prepayment rate (%)
0%
5%
0%
13%
\u2013\u00a0\u00a0FX
2
5
3
4
Option pricing model
Implied volatility (%)
3%
6%
18%
20%
\u2013\u00a0\u00a0Credit
216
13
343
175
Present value techniques
Credit spread (bps)
3
5
149
623
Price based
Price (%)
0%
0%
100%
100%
\u2013\u00a0\u00a0Equity
20
33
17
22
Option pricing model
Equity volatility (%)
12%
0%
75%
77%
Equity/Equity correlation
0.2
0.5
1.0
0.9
Equity/FX correlation
-0.5
-0.5
1.0
0.1
Dividend yield (%)
0%
1%
14%
14%
Price based
Price (%)
0%
n.a
21%
n.a
\u2013\u00a0\u00a0Other
14
1
7
Option pricing model
Commodity volatility (%)
11%
0%
94%
63%
At fair value through other comprehensive income
\u2013\u00a0\u00a0Loans and advances
676
643
Present value techniques
Prepayment rate (%)
n.a.
6%
n.a.
6%
Price based
Price (%)
85%
67%
96%
99%
\u2013\u00a0\u00a0Equity
263
247
Present value techniques
Credit spread (bps)
5.2
6.7
5.2
6.7
Interest rate (%)
4%
4%
4%
4%
Price based
Price (%)
122%
n.a
122%
n.a
Price based
Other (EUR)
n.a
70
n.a
90
Total
9,117
7,526
729
732
Price
For securities where market prices are not available, fair value is measured by comparison with observable
pricing data from similar instruments. Prices of 0% are distressed to the point that no recovery is expected,
while prices significantly in excess of 100% or par are expected to pay a yield above current market rates.
Credit spreads
Credit spread is the premium above a benchmark interest rate required by the market participant to accept
a lower credit quality. Higher credit spreads indicate lower credit quality and a lower value of an asset.
Volatility
Volatility is a measure for variation of the price of a financial instrument or other valuation input over time.
Volatility is one of the key inputs in option pricing models. Typically, the higher the volatility, the higher
value of the option. Volatility varies by the underlying reference (equity, commodity, foreign currency and
interest rates), by strike, and maturity of the option. The minimum level of volatility is 0% and there is no
theoretical maximum.
Correlation
Correlation is a measure of dependence between two underlying references which is relevant for valuing
derivatives and other instruments having more than one underlying reference. High positive correlation
(close to 1) indicates strong positive (statistical) relationship, where underliers move, everything else equal,
into the same direction. The same holds for a high negative correlation.
Interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or
borrowed.
Reset spread
Reset spreads are key inputs to mortgage linked prepayment swaps valuation. Reset spread is the future
spread at which mortgages will re-price at interest rate reset dates.
Dividend yield
Dividend yield is an important input for equity option pricing models showing how much dividends a
company is expected to pay out each year relative to its share price. Dividend yields are generally expressed
as an annualised percentage of share price.
Prepayment rate
Prepayment rate is a key input to mortgage and loan valuation. Prepayment rate is the estimated rate at
which mortgage borrowers will repay their mortgages early, e.g. 5% per year. Prepayment rate and reset
spread are key inputs to mortgage linked prepayment swaps valuation.
Level 3: Changes during the period
Changes in Level 3 Financial assets
Trading assets
Non-trading derivatives
Financial assets
mandatorily at FVPL
Financial assets
designated at FVPL
Financial assets at
FVOCI
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1 January
873
822
421
1
1,849
1,862
3,492
2,480
891
1,063
7,526
6,228
Realised gain/loss recognised in the statement of profit or loss during the period 1
235
53
-142
52
-33
-57
-383
122
8
-322
178
Revaluation recognised in other comprehensive income during the period 2
-6
-84
-6
-84
Purchase of assets
1,246
694
76
15
2,208
1,586
873
772
331
221
4,735
3,288
Sale of assets
-889
-49
-55
-4
-1,109
-669
-138
-191
-243
-275
-2,433
-1,187
Maturity/settlement
-1,005
-511
-15
-2
-576
-617
-292
-22
-59
-1,910
-1,188
Reclassifications
723
-18
5
10
728
-8
Transfers into Level 3
879
288
474
981
605
1
322
-43
1,860
1,646
Transfers out of Level 3
-459
-442
-115
-534
-856
-994
-1,414
Exchange rate differences
-31
18
-9
14
-9
-12
-10
49
-59
68
Changes in the composition of the group and other changes
2
-8
-6
0
Closing balance
848
873
286
421
3,499
1,849
3,547
3,492
938
891
9,118
7,526
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amounts includes EUR 316 million (2022: EUR -171 million) of unrealised gains and losses recognised in the statement of profit or loss.
2 Revaluation recognised in other comprehensive income is included on the line \u2018Net change in fair value of debt instruments at fair value through other comprehensive income\u2019.
In 2023, transfers into and out of Level 3 of financial assets mandatorily at fair value mainly relate to (long
term) reverse repurchase transactions for which the valuation being significantly impacted by unobservable
inputs and no longer significantly impacted by unobservable inputs, respectively.
In 2023, the transfer into Level 3 trading assets is mainly driven by debt securities that are part of a
structure transferred into level 3 due to market illiquidity which decreased observability for an input.
In 2022, the transfers into Level 3 mainly consisted of (non) trading derivatives that were transferred to
Level 3 as a result of the valuation being significantly impacted by unobservable inputs. Furthermore, it
relates to debt obligations of which the valuation is being significantly impacted by unobservable inputs.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss as shown in reclassifications. For further information on the
change in accounting policies, reference is made to Note 1 'Basis of preparation and material accounting
policy information'.
In 2022, following the enhancement of the significance assessment, transfers into and out of Level 3 of
financial assets mandatorily at fair value mainly relate to a portfolio of securitization loans. Furthermore,
transfers out of Level 3 relate to two syndicated deals due to the unobservable parameters were
insignificant.
In 2022, transfers into level 3 financial assets designated at fair value relate to government bonds of which
the valuation being significantly impacted by unobservable inputs.
Changes in Level 3 Financial liabilities
Trading liabilities
Non-trading
derivatives
Financial liabilities
designated as at fair
value through profit
or loss
Total
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Opening balance as at 1
January
229
160
449
35
54
135
732
330
Realised gain/loss recognised
in the statement of profit or
loss during the period1
224
131
-151
59
-2
-10
72
179
Additions
53
124
72
16
18
13
142
153
Redemptions
-102
-38
-53
0
-2
-13
-156
-51
Maturity/settlement
-13
-282
-16
-7
-1
-71
-30
-360
Transfers into Level 3
40
254
0
368
32
88
72
710
Transfers out of Level 3
-49
-117
0
-21
-54
-88
-102
-226
Exchange rate differences
0
-3
0
0
0
0
0
-3
Closing balance
382
229
301
449
47
54
729
732
1 Net gains/losses were recorded as \u2018Valuation results and net trading income\u2019 in the statement of profit or loss. The total amount
includes EUR 72 million (2022: EUR 179\u00a0million) of unrealised gains and losses recognised in the statement of profit or loss.
In 2023, financial liabilities transfers into and out of Level 3 mainly consisted of structured notes, measured
as designated at fair value through profit or loss. The structured notes were transferred out of Level 3 as the
valuation was no longer impacted by significantly unobservable inputs.
In 2022, the transfers into Level 3 mainly consisted of non-trading derivatives that were transferred to Level
3 as a result of the valuation being significantly impacted by unobservable inputs.
g) Recognition of unrealised gains and losses in Level 3
Amounts recognised in the statement of profit or loss relating to unrealised gains and losses during the year
that relates to Level 3 assets and liabilities are included in the line item \u2018Valuation results and net trading
income\u2019 in the statement of profit or loss.
h) Level 3: Sensitivity analysis of unobservable inputs
Where the fair value of a financial instrument is determined using inputs which are unobservable and which
have a more than insignificant impact on the fair value of the instrument, the actual value of those inputs at
the balance date may be drawn from a range of reasonably possible alternatives. In line with market
practice the upper and lower bounds of the range of alternative input values reflect a level of valuation
certainty. The actual levels chosen for the unobservable inputs in preparing the financial statements are
consistent with the valuation methodology used for fair valued financial instruments.
In practice valuation uncertainty is measured and managed per exposure to individual valuation inputs (i.e.
risk factors) at portfolio level across different product categories. Where the disclosure looks at individual
Level 3 inputs, the actual valuation adjustments may also reflect the benefits of portfolio offsets.
This disclosure does not attempt to indicate or predict future fair value movement. The numbers in isolation
give limited information as in most cases these Level 3 assets and liabilities should be seen in combination
with other instruments (for example as a hedge) that are classified as Level 2.
The valuation uncertainty in the table below is broken down by related risk class rather than by product. The
possible impact of a change of unobservable inputs in the fair value of financial instruments where
unobservable inputs are significant to the valuation is as follows:
Sensitivity analysis of Level 3 instruments
Positive fair\u00a0value
movements from
using reasonable
possible alternatives
Negative fair\u00a0value
movements from
using reasonable
possible alternatives
in EUR million
2023
2022
2023
2022
Equity (equity derivatives, structured notes)
18
12
-9
-6
Interest rates (Rates derivatives, FX derivatives)
3
22
0
-14
Credit (Debt securities, Loans, structured notes, credit derivatives)
45
32
-54
-28
Loans and advances
3
-17
-32
69
65
-80
-80
i) Financial instruments not measured at fair value
The following table presents the estimated fair values of the financial instruments not measured at fair
value in the statement of financial position.
Methods applied in determining fair values of financial assets and liabilities (carried at amortised cost)
Carrying Amount
Carrying amount
presented as fair value1
Level 1
Level 2
Level 3
Total fair value
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Financial Assets
Loans and advances to banks
16,709
35,104
2,722
2,859
11,430
29,459
2,511
2,786
16,662
35,104
Loans and advances to customers
642,402
635,506
15,681
19,095
14,602
15,264
593,098
575,805
623,381
610,164
Securities at amortised cost
48,313
48,160
40,041
39,787
4,277
3,160
1,693
1,406
46,010
44,353
707,424
718,770
18,403
21,954
40,041
39,788
30,308
47,883
597,302
579,996
686,053
689,621
Financial liabilities
Deposits from banks
23,257
56,632
3,764
3,696
15,066
48,524
3,968
3,954
22,799
56,174
Customer deposits
650,267
640,770
556,060
589,851
52,486
35,123
41,063
15,331
649,609
640,306
Debt securities in issue
124,670
95,918
62,197
43,352
42,606
35,642
20,450
17,796
125,253
96,790
Subordinated loans
15,401
15,786
15,050
7,843
311
7,705
15,361
15,548
813,594
809,106
559,824
593,547
77,248
51,194
110,469
126,995
65,482
37,082
813,022
808,818
1 In accordance with IFRS and for the purpose of this disclosure, the carrying amount of financial instruments with an immediate on demand feature is presented as fair value
The aggregation of the fair values presented above does not represent, and should not be construed as
representing, the underlying value of ING Group. These fair values were calculated for disclosure purposes
only. The carrying amount of financial instruments presented in the above table includes, when applicable,
the fair value hedge adjustment, this explains why (for these cases) the carrying amount approximates fair
value.
Loans and advances to banks
For short term receivables from banks carrying amounts represent a reasonable estimate of the fair value.
The fair value of long term receivables from banks is estimated by discounting expected future cash flows
using a discount rate based on specific available market data, such as interest rates and appropriate
spreads that reflects current credit risk or quoted bonds.
Loans and advances to customers
For short term loans carrying amounts represent a reasonable estimate of the fair value. The fair value of
long term loans is estimated by discounting expected future cash flows using a discount rate that reflects
current credit risk, current interest rates, and other current market conditions where applicable. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour. Loans with similar
characteristics are aggregated for calculation purposes.
Securities at amortised cost
Where available, fair values for debt securities are generally based on quoted market prices. Quoted market
prices are obtained from an exchange market, dealer, broker, industry group, pricing service, or regulatory
service. The quoted prices from non-exchange sources are reviewed on their tradability of market prices. If
quoted prices in an active market are not available, fair value is based on an analysis of available market
inputs, which includes consensus prices obtained from one or more pricing services. Furthermore, fair values
are determined by valuation techniques discounting expected future cash flows using market interest rate
curves, referenced credit spreads, maturity of the investment, and estimated prepayment rates where
applicable.
Deposits from banks
For short term payables to banks carrying amounts represent a reasonable estimate of the fair value. The
fair value of long term payables to banks is estimated by discounting expected future cash flows using a
discount rate based on available market interest rates and appropriate spreads that reflects ING\u2019s own
credit risk.
Customer deposits
In the current interest rate environment there is significant embedded value in our on-demand deposits,
therefore providing a natural hedge against the impact from rising rates on financial assets. However, for
the purpose of this disclosure and in accordance with IFRS, the carrying amounts of deposits with an
immediate on demand feature is presented as fair value.
The fair value of deposits with fixed contractual terms has been estimated based on discounting future cash
flows using the interest rates currently applicable to deposits of similar maturities.
Debt securities in issue
The fair value of debt securities in issue is generally based on quoted market prices, or if not available, on
estimated prices by discounting expected future cash flows using a current market interest rate and credit
spreads applicable to the yield, credit quality and maturity.
Subordinated loans
The fair value of publicly traded subordinated loans are based on quoted market prices when available.
Where no quoted market prices are available, fair value of the subordinated loans is estimated using
discounted cash flows based on interest rates and credit spreads that apply to similar instruments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-782": { "value": "
38\u00a0 Liabilities and off-balance sheet commitments by maturity
The tables below include all liabilities and off-balance sheet commitments by maturity based on
contractual, undiscounted cash flows. These balances are included in the maturity analysis as follows:
\u2022 Perpetual liabilities are included in the column \u2018Maturity not applicable\u2019.
\u2022 Derivative liabilities are included on a net basis if cash flows are settled net. For other derivative liabilities
the contractual gross cash flow payable is included.
\u2022 Undiscounted future coupon interest on financial liabilities payable is included in a separate line and in
the relevant maturity bucket.
\u2022 Non-financial liabilities are included based on a breakdown of the amounts per statement of financial
position, per expected maturity.
\u2022 Loans and other credit-related commitments are classified on the basis of the earliest date they can be
drawn down.
ING Group\u2019s expected cash flows on some financial liabilities vary significantly from contractual cash flows.
Principal differences are in demand deposits from customers that are expected to remain stable or increase
and in unrecognised loan commitments that are not all expected to be drawn down immediately. Reference
is made to the liquidity risk paragraph in \u2018Risk Management \u2013 Funding and liquidity risk\u2019 for a description on
how liquidity risk is managed.
Liabilities and off-balance sheet commitments by maturity
in EUR million
2023
Less than 1 month 1
1\u20133 months
3\u201312 months
1\u20135 years
Over 5 years
Maturity not applicable
Adjustment\u00a0 2
Total
Deposits from banks
9,294
7,800
2,074
1,898
2,002
189
23,257
Customer deposits
583,335
19,510
40,976
3,585
1,931
930
650,267
Financial liabilities at fair value through profit or loss
\u2013\u00a0 Other trading liabilities
10,981
697
545
1,003
897
-36
14,087
\u2013\u00a0 Trading derivatives
2,292
2,243
5,148
10,204
7,110
-3,865
23,132
\u2013\u00a0 Non-trading derivatives
505
96
139
1,002
355
-78
2,019
\u2013\u00a0 Designated at fair value through profit or loss
29,856
12,754
5,442
3,834
3,546
25
-57
55,400
Debt securities in issue
3,442
10,801
34,882
47,134
31,196
-2,786
124,670
Subordinated loans
9,104
6,988
-691
15,401
Lease liabilities
17
45
175
627
359
-61
1,162
Financial liabilities
639,722
53,946
89,381
69,286
56,500
7,014
-6,455
909,394
Other liabilities 3
9,739
619
2,829
399
420
14,005
Total liabilities
649,462
54,565
92,209
69,685
56,920
7,014
-6,455
923,400
Coupon interest due on financial liabilities
1,047
1,653
6,014
10,007
5,030
402
24,153
Contingent liabilities in respect of
\u2013\u00a0 Discounted bills
2
2
\u2013\u00a0 Guarantees
27,340
4
550
27,894
\u2013\u00a0 Irrevocable letters of credit
14,925
14,925
Guarantees issued by ING Groep N.V.
197
197
Irrevocable facilities
166,361
12
63
314
60
166,810
208,825
12
63
318
610
209,828
1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.
Liabilities and off-balance sheet commitments by maturity
in EUR million
2022
Less than 1 month 1
1\u20133 month
3\u201312 months
1\u20135 years
Over 5 years
Maturity not applicable
Adjustment 2
Total
Deposits from banks
10,053
2,238
33,268
9,878
1,794
-598
56,632
Customer deposits
605,154
16,127
15,045
2,729
1,872
-158
640,770
Financial liabilities at fair value through profit or loss
\u2013\u00a0 Other trading liabilities
5,778
875
304
771
575
-83
8,219
\u2013\u00a0 Trading derivatives
2,100
2,319
4,942
9,330
3,609
8,570
30,869
\u2013\u00a0 Non-trading derivatives
345
288
216
1,204
470
525
3,048
\u2013\u00a0 Designated at fair value through profit or loss
31,505
11,472
1,626
3,177
3,701
22
-620
50,883
Debt securities in issue
2,049
11,227
23,187
30,769
34,335
-5,648
95,918
Subordinated loans
760
9,936
6,307
-1,218
15,786
Lease liabilities
19
43
170
593
377
-28
1,174
Financial liabilities
657,001
44,588
79,518
58,451
56,669
6,329
742
903,298
Other liabilities 3
9,913
683
2,466
638
406
14,106
Total liabilities
666,914
45,271
81,984
59,090
57,075
6,329
742
917,405
Coupon interest due on financial liabilities
430
714
3,132
6,346
3,208
347
14,175
Contingent liabilities in respect of
\u2013\u00a0 Discounted bills
\u2013\u00a0 Guarantees
28,304
4
550
28,859
\u2013\u00a0 Irrevocable letters of credit
15,660
19
3
15,682
\u2013\u00a0 other
3
3
Guarantees issued by ING Groep N.V.
336
336
Irrevocable facilities
161,147
194
434
166
161,940
205,447
19
197
438
719
206,820
1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.
41\u00a0 Contingent liabilities and commitments
In the normal course of business, ING Group is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.
Contingent liabilities and commitments
in EUR million
2023
2022
Contingent liabilities in respect of
\u2013\u00a0 Guarantees
27,894
28,859
\u2013\u00a0 Irrevocable letters of credit
14,925
15,682
\u2013\u00a0 Other
3
42,821
44,544
Guarantees issued by ING Groep N.V.
197
336
Irrevocable facilities
166,810
161,940
209,828
206,820
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Group in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer\u2019s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Group\u2019s credit risk in these transactions is
limited since these transactions are collateralised by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Group\u2019s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers\u2019 assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
In addition to the items included in contingent liabilities, ING Group has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (\u2018Einlagensicherungsfonds\u2019 or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 42 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-783": { "value": "
39\u00a0 Transfer of financial assets, assets pledged and received as collateral
Financial assets pledged as collateral
The financial assets pledged as collateral consist primarily of Loans and advances to customers pledged to
secure Debt securities in issue, deposits from the Dutch Central Bank and other banks, as well as debt
securities used in securities lending or sale and repurchase transactions. They serve to secure margin
accounts and are used for other purposes required by law. Pledges are generally conducted under terms
that are usual and customary for collateralised transactions including standard sale and repurchase
agreements, securities lending and borrowing and derivatives margining. The financial assets pledged are as
follows:
Financial assets pledged as collateral
in EUR million
2023
2022
Banks
\u2013\u00a0 Cash and balances with central banks
322
364
\u2013\u00a0 Loans and advances to banks
3,305
4,007
Financial assets at fair value through profit or loss
23,641
17,079
Financial assets at fair value through OCI
1,896
2,142
Securities at amortised cost
2,672
3,578
Loans and advances to customers
73,860
98,917
Other assets
357
596
106,052
126,682
In 2023 the financial assets pledged as collateral reduced due to the partial repayment of ING's TLTRO III. In
addition, in some jurisdictions ING Bank N.V. has an obligation to maintain a reserve with central banks. As
at 31\u00a0December 2023, the minimum mandatory reserve deposits with various central banks amount to EUR
11,653 million (2022: EUR 11,108 million ).
Financial assets received as collateral
The financial assets received as collateral that can be sold or repledged in absence of default by the owner
of the collateral consists of securities obtained through reverse repurchase transactions and securities
borrowing transactions.
These transactions are generally conducted under standard market terms for most repurchase transactions
and the recipient of the collateral has unrestricted right to sell or repledge it, provided that the collateral (or
equivalent collateral) is returned to the counterparty at term.
Financial assets received as collateral
in EUR million
2023
2022
Total received collateral available for sale or repledge at fair value
\u2013\u00a0 equity securities
33,234
22,847
\u2013\u00a0 debt securities
119,908
103,723
of which sold or repledged at fair value
\u2013\u00a0 equity securities
20,526
18,613
\u2013\u00a0 debt securities
86,448
66,636
Transfer of financial assets
The majority of ING's financial assets that have been transferred, but do not qualify for derecognition are
debt and equity instruments used in securities lending or sale and repurchase transactions.
Transfer of financial assets not qualifying for derecognition
Securities lending
Sale and repurchase
Equity
Debt
Equity
Debt
in EUR million
2023
2022
2023
2022
2023
2022
2023
2022
Transferred assets at carrying amount
Financial assets at fair value through profit or
loss
3,894
2,087
7,357
6,357
11,780
7,178
Financial assets at fair value through other
comprehensive income
328
499
470
453
Loans and advances to customers
2,396
4,637
Securities at amortised cost
431
435
465
261
Associated liabilities at carrying amount1
Financial liabilities at fair value through profit
or loss
n/a
n/a
n/a
n/a
11,010
6,245
9,467
8,932
1 The table includes the associated liabilities which are reported after offsetting, compared to the gross positions of the encumbered
assets.
The table above does not include assets transferred to consolidated securitisation entities as the related
assets remain recognised in the consolidated statement of financial position. Transferred financial assets
that are derecognised in their entirety are mentioned in Note 45 'Structured entities'.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-784": { "value": "
Financial assets pledged as collateral
The financial assets pledged as collateral consist primarily of Loans and advances to customers pledged to
secure Debt securities in issue, deposits from the Dutch Central Bank and other banks, as well as debt
securities used in securities lending or sale and repurchase transactions. They serve to secure margin
accounts and are used for other purposes required by law. Pledges are generally conducted under terms
that are usual and customary for collateralised transactions including standard sale and repurchase
agreements, securities lending and borrowing and derivatives margining. The financial assets pledged are as
follows:
Financial assets pledged as collateral
in EUR million
2023
2022
Banks
\u2013\u00a0 Cash and balances with central banks
322
364
\u2013\u00a0 Loans and advances to banks
3,305
4,007
Financial assets at fair value through profit or loss
23,641
17,079
Financial assets at fair value through OCI
1,896
2,142
Securities at amortised cost
2,672
3,578
Loans and advances to customers
73,860
98,917
Other assets
357
596
106,052
126,682
In 2023 the financial assets pledged as collateral reduced due to the partial repayment of ING's TLTRO III. In
addition, in some jurisdictions ING Bank N.V. has an obligation to maintain a reserve with central banks. As
at 31\u00a0December 2023, the minimum mandatory reserve deposits with various central banks amount to EUR
11,653 million (2022: EUR 11,108 million ).
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-787": { "value": "
41\u00a0 Contingent liabilities and commitments
In the normal course of business, ING Group is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.
Contingent liabilities and commitments
in EUR million
2023
2022
Contingent liabilities in respect of
\u2013\u00a0 Guarantees
27,894
28,859
\u2013\u00a0 Irrevocable letters of credit
14,925
15,682
\u2013\u00a0 Other
3
42,821
44,544
Guarantees issued by ING Groep N.V.
197
336
Irrevocable facilities
166,810
161,940
209,828
206,820
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Group in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer\u2019s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Group\u2019s credit risk in these transactions is
limited since these transactions are collateralised by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Group\u2019s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers\u2019 assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
In addition to the items included in contingent liabilities, ING Group has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (\u2018Einlagensicherungsfonds\u2019 or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 42 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-786": { "value": "
41\u00a0 Contingent liabilities and commitments
In the normal course of business, ING Group is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.
Contingent liabilities and commitments
in EUR million
2023
2022
Contingent liabilities in respect of
\u2013\u00a0 Guarantees
27,894
28,859
\u2013\u00a0 Irrevocable letters of credit
14,925
15,682
\u2013\u00a0 Other
3
42,821
44,544
Guarantees issued by ING Groep N.V.
197
336
Irrevocable facilities
166,810
161,940
209,828
206,820
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Group in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer\u2019s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Group\u2019s credit risk in these transactions is
limited since these transactions are collateralised by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Group\u2019s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers\u2019 assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
In addition to the items included in contingent liabilities, ING Group has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (\u2018Einlagensicherungsfonds\u2019 or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 42 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
42\u00a0 Legal proceedings
ING Group and its consolidated subsidiaries are involved in governmental, regulatory, arbitration and legal
proceedings and investigations in the Netherlands and in a number of foreign jurisdictions, including the
U.S., involving claims by and against them which arise in the ordinary course of their businesses, including in
connection with their activities as lenders, broker-dealers, underwriters, issuers of securities and investors
and their position as employers and taxpayers. In certain of such proceedings, very large or indeterminate
amounts are sought, including punitive and other damages. While it is not feasible to predict or determine
the ultimate outcome of all pending or threatened governmental, regulatory, arbitration and legal
proceedings and investigations, ING is of the opinion that some of the proceedings and investigations set
out below may have or have in the recent past had a significant effect on the financial position, profitability
or reputation of the ING and/or the ING and its consolidated subsidiaries.
Settlement agreement: On 4 September 2018, ING announced that it had entered into a settlement
agreement with the Dutch Public Prosecution Service relating to previously disclosed investigations
regarding various requirements for client on-boarding and the prevention of money laundering and corrupt
practices. Following the entry into the settlement agreement, ING has experienced heightened scrutiny
from authorities in various countries. ING is also aware, including as a result of media reports, that other
parties may, among other things, seek to commence legal proceedings against ING in connection with the
subject matter of the settlement. Certain parties filed requests with the Court of Appeal in The Netherlands
to reconsider the prosecutor\u2019s decision to enter into the settlement agreement with ING and not to
prosecute ING or (former) ING employees. In December 2020, the Court of Appeal issued its final ruling. In
this ruling the prosecutors' decision to enter into the settlement agreement with ING was upheld, making
the settlement final. However, in a separate ruling, the Court ordered the prosecution of ING\u2019s former CEO.
Litigation by investors: In February 2024, ING and certain (former) board members were served with a writ
of summons for litigation in The Netherlands on behalf of investors who claim to have suffered financial
losses in connection with ING's disclosures on historic shortcomings in its financial economic crime policies,
related risk management and control systems, the investigation by and settlement with the Dutch
authorities in 2018 and related risks for ING. We do not agree with the allegations and will defend ourselves
against these and the claimed damages of around EUR 500 million. We follow IFRS rules for taking legal
provisions and would disclose material amounts in that regard if and when applicable - which currently is
not the case.
Findings regarding AML processes: As previously disclosed, after its September 2018 settlement with Dutch
authorities concerning anti-money laundering matters, and in the context of significantly increased
attention on the prevention of financial economic crime, ING has experienced heightened scrutiny by
authorities in various countries. The interactions with such regulatory and judicial authorities have included,
and can be expected to continue to include, onsite visits, information requests, investigations and other
enquiries. Such interactions, as well as ING\u2019s internal assessments in connection with its global
enhancement programme, have in some cases resulted in satisfactory outcomes, and also have resulted in,
and may continue to result in, findings, or other conclusions which may require appropriate remedial
actions by ING, or may have other consequences. ING intends to continue to work in close cooperation with
authorities as it seeks to improve its management of non-financial risks in terms of policies, tooling,
monitoring, governance, knowledge and behaviour.
In January 2022, a Luxembourg investigating judge informed ING Luxembourg that he intends to instruct
the relevant prosecutor to prepare a criminal indictment regarding alleged shortcomings in the AML process
at ING Luxembourg. Although this matter still remains at an early procedural stage and it is currently not
possible to determine how this matter will be resolved or the timing of any such resolution, ING does not
expect a financial outcome of this matter to have a material effect.
ING's subsidiary Payvision is the subject of a criminal investigation by Dutch authorities regarding money
laundering and various requirements of the Dutch act on Anti-Money Laundering and Counter Terrorist
Financing, focusing on the period from 1 January 2015 up to and including April 2020. Payvision is
cooperating with such ongoing investigation. In October 2021, the phasing out of Payvision was announced.
The phasing out of activities and the transfer of customers to a new service provider were completed in
2022. At the request of Payvision, its license has been withdrawn. It is currently not feasible to determine
how the ongoing investigation may be resolved or the timing of any such resolution, nor to estimate reliably
the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome.
ING continues to take steps to enhance its management of compliance risks and embed stronger awareness
across the whole organisation. These steps are part of the global KYC programme and set of initiatives,
which includes enhancing KYC files and working on various structural improvements in compliance policies,
tooling, monitoring, governance, knowledge and behaviour.
Tax cases: Because of the geographic spread of its business, ING may be subject to tax audits, investigations
and procedures in numerous jurisdictions at any point in time. Although the Issuer believes that it has
adequately provided for all its tax positions, the ultimate resolution of these audits, investigations and
procedures is uncertain and may result in liabilities which are materially different from the amounts
recognised.
Litigation regarding products of a former subsidiary in Mexico: Proceedings in which ING is involved include
complaints and lawsuits concerning the performance of certain interest sensitive products that were sold by
a former subsidiary of ING in Mexico.
Claims regarding accounts with predecessors of ING Bank T\u00fcrkiye: ING Bank T\u00fcrkiye has received
numerous claims from (former) customers of legal predecessors of ING Bank T\u00fcrkiye. The claims are based
on offshore accounts held with these banks, which banks were seized by the Savings Deposit Insurance Fund
(\u201cSDIF\u201d) prior to the acquisition of ING Bank T\u00fcrkiye in 2007 from OYAK. Pursuant to the acquisition contract,
ING can claim compensation from SDIF if a court orders ING to pay amounts to the offshore account holders.
SDIF has made payments to ING pursuant to such compensation requests, but filed various lawsuits to
receive those amounts back. These lawsuits are ongoing in favour of ING Bank T\u00fcrkiye. In April 2022, the
Turkish Supreme Court decided that the prescription period for the offshore account holders\u2019 compensation
claims starts on the transfer date of the account holders to the offshore accounts. The exact impact of this
decision on the ongoing cases is not clear yet. At this moment it is not possible to assess the outcome of
these procedures nor to provide an estimate of the (potential) financial effect of these claims.
Interest rate derivatives claims: In the past a uniform recovery framework for Dutch SME clients with
interest rate derivatives was established by a committee of independent experts appointed by the Dutch
Ministry of Finance. In the context of this recovery framework most claims have been settled, however ING is
still involved in several legal proceedings in the Netherlands with respect to interest rate derivatives that
were sold to clients in connection with floating interest rate loans in order to hedge the interest rate risk of
the loans. These proceedings are based on several legal grounds, depending on the facts and circumstances
of each specific case, inter alia alleged breach of duty of care, insufficient information provided to the clients
on the product and its risks and other elements related to the interest rate derivatives that were sold to
clients. In some cases, the court has ruled in favour of the claimants and awarded damages, annulled the
interest rate derivative or ordered repayment of certain amounts to the claimants.
Interest surcharges claims: ING received complaints and was involved in litigation with certain individuals in
the Netherlands regarding increases in interest surcharges with respect to several credit products, including
but not limited to commercial property. ING has reviewed the relevant product portfolio. The provision
previously taken has been reversed for certain of these complaints. All claims are dealt with individually.
Thus far, the courts have ruled in favour of ING in each case, ruling that ING was allowed to increase the
interest surcharge based upon the essential obligations in the contract. In a relevant case the Dutch
Supreme Court ruled in favor of another Dutch bank, addressing the question whether or not a bank is
allowed to increase interest surcharges unilaterally. The Supreme Court ruled affirmatively and referred the
case to the Court of Appeal in The Hague. The Court of Appeal also ruled in favour of the Dutch bank in
October 2022 and this ruling has been confirmed by the Supreme Court in its ruling of 22 December 2023.
ING will continue to deal with all claims individually. In the last pending case against ING, the Court of Appeal
dismissed all claims in its ruling of 9 January 2024. The time limit for lodging a cassation appeal at the
Supreme Court expires on 9 April 2024.
Mortgage expenses claims: ING Spain has received claims and is involved in procedures with customers
regarding reimbursement of expenses associated with the formalisation of mortgages. In most first instance
court proceedings the expense clause of the relevant mortgage contract has been declared null and ING
Spain has been ordered to reimburse all or part of the applicable expenses. Since 2018, the Spanish Supreme
Court and the European Court of Justice have issued rulings setting out which party should bear notary,
registration, agency, and stamp duty costs. In January 2021, the Spanish Supreme Court ruled that
valuation costs of mortgages, signed prior to 16 June 2019, the date the new mortgage law entered into
force, should be borne by the bank. Media attention for the statute of limitations applicable to the right to
claim reimbursement of costs resulted in an increased number of claims at the beginning of 2021. In June
2021, the Supreme Court published a press release informing of its decision to ask the European Court of
Justice for a preliminary ruling regarding the criteria that should be applied to determine the date from
which the action for claiming the reimbursement of mortgage expenses is considered to be expired. Two
other preliminary rulings that were submitted by Catalunya courts also related to the limitation period. In
January 2024, the European Court of Justice ruled on one of the complaints filed by the Catalunya Provincial
Court. The European Court of Justice determined that the limitation period for the judicial claim for
reimbursement of expenses cannot begin to run from a Supreme Court decision declaring the clause null
and void, nor from the moment of the payment of the expenses. The European Court of Justice indicated
that it is up to national case-law to determine the criterion that should be applied for the calculation of the
limitation period, so uncertainty remains until the Supreme Court unifies the case-law. Currently, ING is
reviewing the strategy in order to address the latest developments.
ING Spain was also included, together with other Spanish banks, in three class actions filed by customer
associations. In one of the class actions an agreement was reached with the association. In another class
action ING filed an appeal asking the Spanish Court of Appeal to determine that the ruling of the court of
first instance is only applicable to the consumers that were part of the case. The National Court has revoked
the ruling and declared that the consumers will not be able to initiate an action for compensation based on
the first instance ruling, as the claimant association intended. This last decision is not yet final, as it has
been appealed in the Supreme Court. A provision has been established in the past and has been adjusted
where appropriate.
Imtech claims: In the Netherlands, the trustees in the bankruptcy of Imtech N.V. (\u201cImtech\u201d) claimed in
September 2018 from various financing parties, including ING, payment of what the security agent has
collected following bankruptcy or intends to collect, repayment of all that was repaid to the financing
parties, as well as compensation for the repayment of a bridge financing, provided by ING and another
bank. This matter was settled by all Imtech financiers, including ING, and the Imtech trustees in October
2023.
In January 2018, ING Bank received a claim from Stichting ImtechClaim.nl and Imtech Shareholders Action
Group B.V. on behalf of certain (former) shareholders of Imtech. Furthermore, in March 2018, ING Bank
received another claim on the same subject matter from the Dutch Association of Stockholders (Vereniging
van Effectenbezitters, \u201cVEB\u201d). In June 2022, VEB reiterated and further substantiated its claim in a letter to
ING. Each of the claimants allege inter alia that shareholders were misled by the prospectus of the rights
issues of Imtech in July 2013 and October 2014. ING Bank, being one of the underwriters of the rights issues,
is held liable by the claimants for the damages that investors in Imtech would have suffered. ING Bank
responded to the claimants denying any and all responsibility in relation to the allegations made in the
relevant letters. ING (and the other underwriting banks) received a tolling letter (stuitingsbrief) from
Stichting Imtechclaim.nl, Imtech Shareholders Action Group B.V. and individual shareholders in December
2022, in connection with the allegations made in their original claim letter of January 2018. At this moment
it is not possible to assess the outcome of these claims nor to provide an estimate of the (potential) effect of
these claims.
Claims regarding mortgage loans in Swiss franc in Poland: ING Poland is a defendant in several lawsuits
with retail customers who took out mortgage loans indexed to the Swiss franc. Such customers have alleged
that the mortgage loan contract contains abusive clauses. One element that the court is expected to
consider in determining whether such contracts contain abusive clauses is whether the rules to determine
the exchange rate used for the conversion of the loan from Polish zloty to Swiss franc are unambiguous and
verifiable. In December 2020, the Polish Financial Supervision Authority (PFSA) proposed that lenders offer
borrowers voluntary out-of-court settlements on foreign-currency mortgage disputes, with mortgages
indexed to Swiss franc serving as a reference point. In February 2021, ING Poland announced its support for
this initiative and in October 2021 began offering the settlements to the borrowers following the PFSA\u2019s
proposal. The Polish Supreme Court was expected to provide further clarity on this topic in a ruling
scheduled for November 2021, however the court\u2019s session on this matter was postponed and the date of
the next session has not yet been announced. In October 2022, a hearing of the European Court of Justice
(\"CJEU\") was held inter alia on the question whether, after cancellation of a contract regarding a Swiss franc
loan by a court, banks may still charge interests for the amount borrowed under such loan prior to
cancellation.
On 15 June 2023 the CJEU issued a ruling. It ruled that under EU law when a loan agreement indexed to the
Swiss franc is declared null and void, banks cannot claim any remuneration (i.e. interest) for the duration the
principal amount was available to the customer. The customer, however, may assert claims against banks in
addition to reimbursement of interest and instalments previously paid to the bank. ING has recorded a
portfolio provision.
Certain Consumer Credit Products: In October 2021, ING announced that it would offer compensation to its
Dutch retail customers in connection with certain revolving consumer loans with variable interest rates that
allegedly did not sufficiently follow market rates. This announcement was made in response to several
rulings by the Dutch Institute for Financial Disputes (Kifid) regarding similar products at other banks. ING has
recognized a provision of EUR 180 million in 2021 for compensation and costs in connection with this
matter. On 22 December 2021, ING announced that it reached an agreement with the Dutch Consumers\u2019
Association (Consumentenbond) on the compensation methodology for revolving credits. Based on a Kifid
ruling regarding similar products, ING has amended its previously announced compensation scheme by also
compensating interest on interest. In the third quarter of 2022, ING increased its provision for this matter by
EUR 75 million. In the fourth quarter of 2022, ING and the Dutch Consumers\u2019 Association reached an
agreement on the compensation of customers who have had an overdraft facility or a revolving credit card
with a variable interest rate. ING has started compensating such customers in line with Kifid rulings about
revolving credits including \u2018interest-on-interest\u2019-effect in these cases. The compensation process is taking
more time than expected. Timelines for compensation vary depending on customer and product
segmentation and are dependent on the availability of data.
Climate litigation: In January 2024, Friends of the Earth Netherlands (Milieudefensie) announced that it
holds ING liable for alleged contribution to climate change and threatens to initiate legal proceedings
against ING. If necessary, we will defend our science-based climate approach in court.
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41\u00a0 Contingent liabilities and commitments
In the normal course of business, ING Group is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.
Contingent liabilities and commitments
in EUR million
2023
2022
Contingent liabilities in respect of
\u2013\u00a0 Guarantees
27,894
28,859
\u2013\u00a0 Irrevocable letters of credit
14,925
15,682
\u2013\u00a0 Other
3
42,821
44,544
Guarantees issued by ING Groep N.V.
197
336
Irrevocable facilities
166,810
161,940
209,828
206,820
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Group in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer\u2019s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Group\u2019s credit risk in these transactions is
limited since these transactions are collateralised by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Group\u2019s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers\u2019 assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
As at 31 December 2023, ING Groep N.V. guarantees various US dollar debentures (that mature between
2024 and 2036) which were issued by a subsidiary of Voya Financial Inc. In accordance with the
Shareholder\u2019s agreement, the net exposure of ING Groep N.V. as at 31 December 2023 was nil, as the
outstanding principal amount of the US dollar debentures was fully covered with collateral of EUR 205
million (2022: EUR 344 million) pledged by Voya Financial Inc.
In addition to the items included in contingent liabilities, ING Group has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (\u2018Einlagensicherungsfonds\u2019 or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Group has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 42 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
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44\u00a0 Principal subsidiaries, investments in associates and joint ventures
For the majority of ING\u2019s principal subsidiaries, ING Groep N.V. has control because it either directly or
indirectly owns more than half of the voting power. For subsidiaries in which the interest held is below 50%,
control exists based on the combination of ING\u2019s financial interest and its rights from other contractual
arrangements which result in control over the operating and financial policies of the entity.
For each of the subsidiaries listed, the voting rights held equal the proportion of ownership interest and
consolidation by ING is based on the majority of ownership.
For the principal investments in associates and joint ventures ING Group has significant influence but not
control. Significant influence generally results from a shareholding of between 20% and 50% of the voting
rights, but also the ability to participate in the financial and operating policies through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;
\u2022 Participation in the policymaking process; and
\u2022 Interchange of managerial personnel.
The principal subsidiaries, investments in associates and joint ventures of ING Groep N.V. and their statutory
place of incorporation or primary place of business are as follows:
Principal subsidiaries, investments in associates and joint ventures
Proportion of ownership and
interest held by the group
2023
2022
Subsidiary
Statutory place of
Incorporation
Country of operation
ING Bank N.V.
Amsterdam
the Netherlands
100%
100%
Bank Mendes Gans N.V.
Amsterdam
the Netherlands
100%
100%
ING Belgium S.A./N.V.
Brussels
Belgium
100%
100%
ING Luxembourg S.A.
Luxembourg City
Luxembourg
100%
100%
ING-DiBa AG
Frankfurt am Main
Germany
100%
100%
ING Bank Slaski S.A.1
Katowice
Poland
75%
75%
ING Financial Holdings Corporation
Delaware
United States of America
100%
100%
ING Bank A.S.
Istanbul
T\u00fcrkiye
100%
100%
ING Bank (Australia) Ltd
Sydney
Australia
100%
100%
ING Commercial Finance B.V.
Amsterdam
the Netherlands
100%
100%
ING Groenbank N.V.
Amsterdam
the Netherlands
100%
100%
Investments in associates and joint
ventures
TMBThanachart Bank Public Company
Ltd2
Bangkok
Thailand
23%
23%
1 The shares of the non-controlling interest stake of 25% are listed on the Warsaw Stock Exchange, for summarised financial
information we refer to Note 31 'Information on geographical areas'
2 Reference is made to Note 8 'Investment in associates and joint ventures'.
45\u00a0 Structured entities
ING Group\u2019s activities involve transactions with various structured entities (SE) in the normal course of its
business. A structured entity is an entity that has been designed so that voting or similar rights are not the
dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative
tasks only and the relevant activities are directed by means of contractual arrangements. ING Group\u2019s
involvement in these entities varies and includes both debt financing and equity financing of these entities
as well as other relationships. Based on its accounting policies, ING establishes whether these involvements
result in no significant influence, significant influence, joint control or control over the structured entity.
The structured entities over which ING can exercise control are consolidated. ING may provide support to
these consolidated structured entities as and when appropriate. However, this is fully reflected in the
consolidated financial statements of ING Group as all assets and liabilities of these entities are included and
off-balance sheet commitments are disclosed.
ING\u2019s activities involving structured entities are explained below in the following categories:
1. Consolidated ING originated securitisation programmes;
2. Consolidated ING originated Covered bond programme (CBC);
3. Consolidated ING sponsored Securitisation programme (Mont Blanc);
4. Unconsolidated Securitisation programme; and
5. Other structured entities.
1. Consolidated ING originated securitisation programmes
ING Group enters into liquidity management securitisation programmes in order to obtain funding and
improve liquidity. Within the programme ING Group sells ING originated assets to a structured entity. The
underlying exposures include residential mortgages and SME loans in the Netherlands, Belgium, Spain, Italy,
Australia and Germany.
The structured entity issues securitised notes (traditional securitisations) which are eligible collateral for
central bank liquidity purposes. In most programmes ING Group acts as investor of the securitised notes. ING
Group continues to consolidate these structured entities if it is deemed to control the entities.
The structured entity issues securitisation notes in two or more tranches, of which the senior tranche
obtains a high rating (AAA or AA) by a rating agency. The retained tranche can subsequently be used by ING
Group as collateral in the money market for secured borrowings.
ING Group originated various securitisations, as at 31\u00a0December 2023, these consisted of approximately EUR
67 billion (2022: EUR 65 billion) of senior and subordinated notes, of which approximately EUR 2 billion
(2022: EUR 1 billion) were issued externally. The underlying exposures are residential mortgages and SME
loans. Apart from the third party funding, these securitisations did not impact ING Group\u2019s Consolidated
statement of financial position and profit or loss.
In 2023, there are no non-controlling interests as part of the securitisation structured entities that are
significant to ING Group. ING Group for the majority of the securitisation vehicles provides the funding for
the entity except for EUR 2 billion (2022: EUR 1 billion).
In addition ING Group originated various securitisations for liquidity management optimisation purposes
which consist of senior secured portfolio loans issued to ING subsidiaries in Germany. The underlying
exposures were senior loans to large corporations and financial institutions, and real estate finance loans,
mainly in the Netherlands. As at 31\u00a0December 2023, all securitized loans are redeemed (2022: EUR 444
million).
2. Consolidated ING originated covered bond programme (CBC)
ING Group has entered into a covered bond programme. Under the covered bond programme ING issues
bonds. The payment of interest and principal is guaranteed by the ING administered structured entities, ING
Covered Bond Company B.V., and ING SB Covered Bond Company B.V. In order for these entities to fulfil their
guarantee, ING legally transfers mainly Dutch mortgage loans originated by ING. Furthermore, ING offers
protection against deterioration of the mortgage loans. The entities are consolidated by ING Group.
Covered bond programme
Fair value pledged mortgage loans
in EUR million
2023
2022
Dutch Covered Bond Companies
27,148
21,379
27,148
21,379
In addition, subsidiaries of ING in Germany, Belgium, Poland and Australia also issued covered bonds with
pledged mortgages loans of approximately EUR 29,950 million (2022: EUR 24,880 million) in total.
For the covered bond programme, third-party investors in securities issued by the structured entity have
recourse to the assets of the entity and to the assets of ING Group.
3. Consolidated ING sponsored Securitisation programme (Mont Blanc)
In the normal course of business, ING Group structures financing transactions for its clients by assisting
them in obtaining sources of liquidity by selling the clients\u2019 receivables or other financial assets to a Special
Purpose Vehicle (SPV). The senior positions in these transactions may be funded by the ING administered
multi seller Asset Backed Commercial Paper (ABCP) conduit Mont Blanc Capital Corp. (rated A-1/P-1). Mont
Blanc Capital Corp. funds itself externally\u00a0 in the ABCP markets.
In its role as administrative agent, ING Group facilitates these transactions by acting as administrative
agent, swap counterparty and liquidity provider to Mont Blanc Capital Corp. ING Group also provides support
facilities (i.e. liquidity) backing the transactions funded by the conduit. The types of asset currently in the
Mont Blanc conduit include trade receivables, consumer finance receivables, car leases and residential
mortgages.
ING Group supports the commercial paper programmes by providing Mont Blanc Capital Corp. with short-
term liquidity facilities. Once drawn these facilities bear normal credit risk.
The liquidity facilities, provided to Mont Blanc are EUR 2,268 million (2022: EUR 2,446 million). The drawn
liquidity amount is nil as at 31\u00a0December 2023 (2022: nil).
The standby liquidity facilities are reported under irrevocable facilities. All facilities, which vary in risk profile,
are granted to the Mont Blanc Capital Corp. subject to normal ING Group credit and liquidity risk analysis
procedures. The fees received for services provided and for facilities are charged subject to market
conditions.
4. Unconsolidated Securitisation programme
In 2013 ING transferred financial assets (mortgage loans) for an amount of approximately EUR 2 billion to a
special purpose vehicle (SPV). The transaction resulted in full derecognition of the financial assets from ING\u2019s
statement of financial position. Following this transfer ING continues to have two types of on-going
involvement in the transferred assets: as counterparty to the SPE of a non-standard interest rate swap,
which is recognized as a non-trading derivative and as servicer of the transferred assets. ING has an option
to unwind the transaction by redeeming all notes at their principal outstanding amount, in the unlikely
event of changes in accounting and/or regulatory requirements that significantly impact the transaction.
The fair value of the swap held by ING at 31\u00a0December 2023 amounted to EUR -26\u00a0million (2022: EUR
-40\u00a0million); fair value changes on this swap recognised in the statement of profit or loss in 2023 were EUR
14 million (2022: EUR -6 million). Service fee income recognised, for the role as administrative agent, in the
statement of profit or loss in 2023 amounted to EUR 1 million (2022: EUR 1 million). The cumulative income
recognised in profit or loss since derecognition amounts to EUR 19 million (2022: EUR 18 million).
5. Other structured entities
In the normal course of business, ING Group enters into transactions with structured entities as
counterparty. Predominantly in its structured finance operations, ING can be instrumental in facilitating the
creation of these structured entity counterparties. These entities are generally not included in the
consolidated financial statements of ING Group, as ING facilitates these transactions as administrative agent
by providing structuring, accounting, funding, lending, and operation services.
ING Group offers various investment fund products to its clients. ING Group does not invest in these
investment funds for its own account nor acts as the fund manager.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-788": { "value": "
44\u00a0 Principal subsidiaries, investments in associates and joint ventures
For the majority of ING\u2019s principal subsidiaries, ING Groep N.V. has control because it either directly or
indirectly owns more than half of the voting power. For subsidiaries in which the interest held is below 50%,
control exists based on the combination of ING\u2019s financial interest and its rights from other contractual
arrangements which result in control over the operating and financial policies of the entity.
For each of the subsidiaries listed, the voting rights held equal the proportion of ownership interest and
consolidation by ING is based on the majority of ownership.
For the principal investments in associates and joint ventures ING Group has significant influence but not
control. Significant influence generally results from a shareholding of between 20% and 50% of the voting
rights, but also the ability to participate in the financial and operating policies through situations including,
but not limited to one or more of the following:
\u2022 Representation on the board of directors;
\u2022 Participation in the policymaking process; and
\u2022 Interchange of managerial personnel.
The principal subsidiaries, investments in associates and joint ventures of ING Groep N.V. and their statutory
place of incorporation or primary place of business are as follows:
Principal subsidiaries, investments in associates and joint ventures
Proportion of ownership and
interest held by the group
2023
2022
Subsidiary
Statutory place of
Incorporation
Country of operation
ING Bank N.V.
Amsterdam
the Netherlands
100%
100%
Bank Mendes Gans N.V.
Amsterdam
the Netherlands
100%
100%
ING Belgium S.A./N.V.
Brussels
Belgium
100%
100%
ING Luxembourg S.A.
Luxembourg City
Luxembourg
100%
100%
ING-DiBa AG
Frankfurt am Main
Germany
100%
100%
ING Bank Slaski S.A.1
Katowice
Poland
75%
75%
ING Financial Holdings Corporation
Delaware
United States of America
100%
100%
ING Bank A.S.
Istanbul
T\u00fcrkiye
100%
100%
ING Bank (Australia) Ltd
Sydney
Australia
100%
100%
ING Commercial Finance B.V.
Amsterdam
the Netherlands
100%
100%
ING Groenbank N.V.
Amsterdam
the Netherlands
100%
100%
Investments in associates and joint
ventures
TMBThanachart Bank Public Company
Ltd2
Bangkok
Thailand
23%
23%
1 The shares of the non-controlling interest stake of 25% are listed on the Warsaw Stock Exchange, for summarised financial
information we refer to Note 31 'Information on geographical areas'
2 Reference is made to Note 8 'Investment in associates and joint ventures'.
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46\u00a0 Related parties
In the normal course of business, ING Group enters into various transactions with related parties. Parties are
considered to be related if one party has the ability to control or exercise significant influence over the other
party in making financial or operating decisions. Related parties of ING Group include, among others, its
associates, joint ventures, key management personnel, and various defined benefit and contribution plans.
For post-employment benefit plans, reference is made to Note 33 'Pensions and other post-employment
benefits' Transactions between related parties include rendering or receiving of services, leases, transfers
under finance arrangements and provisions of guarantees or collateral. All transactions with related parties
took place at conditions customary in the market. There are no significant provisions for doubtful debts or
individually significant bad debt expenses recognised on outstanding balances with related parties.
Associates and joint ventures
Transactions with ING Group\u2019s main associates and joint ventures
Associates
Joint ventures
in EUR million
2023
2022
2023
2022
Assets
121
121
Liabilities
424
309
1
1
Off-balance sheet commitments
20
28
Income received
10
12
Expenses paid
3
Assets, liabilities, commitments, and income related to Associates and joint ventures result from
transactions which are executed as part of the normal Banking business. Dividends received by associates
and joint ventures are included in Note 8 'Investment in associates and joint ventures'.
Key management personnel compensation
The Executive Board of ING Groep N.V., the Management Board Banking and the Supervisory Board are
considered Key Management personnel of ING Group. In 2023 and 2022, the three members of the
Executive Board of ING Groep N.V. were also members of the Management Board Banking.
Transactions with key management personnel, including their compensation are included in the tables
below.
Key management personnel compensation (Executive Board and Management Board Banking)
2023
in EUR thousands
Executive Board
of ING Groep N.V.
Management
Board Banking 1
Total
Fixed Compensation
\u2013\u00a0 Base salary
4,220
4,200
8,420
\u2013\u00a0 Collective fixed allowances 2
1,002
887
1,889
\u2013\u00a0 Pension costs
78
107
185
\u2013\u00a0 Severance benefits
734
734
Variable compensation
\u2013\u00a0 Upfront cash
598
598
\u2013\u00a0 Upfront shares
293
598
891
\u2013\u00a0 Deferred cash
897
897
\u2013\u00a0 Deferred shares
439
897
1,336
\u2013\u00a0 Other emoluments 3
344
487
832
Total compensation
6,376
9,405
15,782
1 Excluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 128,810.
3 This includes expatriate allowances (such as housing, school/tuition fees and international health insurances, if applicable); banking
and insurance benefits from ING (on the same terms as for other employees of ING in the Netherlands); tax and financial planning
services to ensure compliance with the relevant legislative requirements; reimbursement of costs under the Directors & Officers
indemnity provided by ING; the use of a company car or driver service.
Key management personnel compensation (Executive Board and Management Board Banking)
2022
Executive Board of
ING Groep N.V.
Management Board
Banking 1
Total
in EUR thousands
Fixed Compensation
\u2013\u00a0 Base salary
4,220
4,969
9,189
\u2013\u00a0 Collective fixed allowances\u00a0 2
1,011
1,073
2,084
\u2013\u00a0 Pension costs
70
116
186
\u2013\u00a0 Severance benefits
932
932
Variable compensation
\u2013\u00a0 Upfront cash
803
803
\u2013\u00a0 Upfront shares
268
803
1,071
\u2013\u00a0 Deferred cash
1,204
1,204
\u2013\u00a0 Deferred shares
401
1,204
1,605
\u2013\u00a0 Other emoluments 3
296
638
934
Total compensation
6,266
11,742
18,008
1 Excluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 114,866.
3 This includes amongst others: housing, school/tuition fees, international health insurance, relocation costs and tax and financial
planning.
ING indemnifies the members of the EB against direct financial losses in connection with claims from third
parties filed, or threatened to be filed, against them by virtue of their service as a member of the EB, as far
as permitted by law, on the conditions laid down in the Articles of Association and their commission
contract. ING has taken out liability insurance for the members of the EB.
In accordance with the Articles of Association ING indemnifies the members of the Supervisory Board as far
as legally permitted against direct financial losses in connection with claims from third parties filed or
threatened to be filed against them by virtue of their service as a member of the Supervisory Board.
Key management personnel compensation is generally included in Staff expenses in the statement of profit
or loss. The total remuneration of the Executive Board and Management Board Banking is disclosed in the
table above. Under IFRS, certain components of variable remuneration are not recognised in the statement
of profit or loss directly, but are allocated over the vesting period of the award. The comparable amount
recognised in Staff expenses in 2023 relating to the fixed expenses of 2023 and the vesting of variable
remuneration of earlier performance years, is EUR 14 million in 2023 (2022: EUR 14 million).
The table below shows the total of fixed remuneration, expense allowances and attendance fees for the
Supervisory Board in 2023 and 2022.
Key management personnel compensation (Supervisory Board)
in EUR thousands
2023
2022
Total compensation
1,152
1,048
Loans and advance to key management personnel
As at 31 December 2023 Loans and advances outstanding to key management personnel amounted to EUR
1.7 million (2022: EUR 2.7 million) and loan commitments to key management personnel amounted to EUR
138 thousand (2022: EUR 203\u00a0thousand). Total interest received in 2023 on these loans and advances
amounted to EUR 30 thousand (2022: EUR 62 thousand).
These loans and advances and loan commitments (1) were made in the ordinary course of business, (2)
were granted on conditions that are comparable to those of loans and advances granted to all employees
and (3) did not involve more than the normal risk of collectability or present other unfavourable features.
Loans and advances to members of the Executive Board and Management Board Banking are compliant
with the standards set out in the DNB guidelines for loans to officers and directors of a regulated entity,
such as ING.
Deposits outstanding to key management personnel
As at 31 December 2023 Deposits outstanding from key management personnel amounted to EUR 13.9
million (2022: EUR 11.5 million). Total interest paid in 2023 on these deposits amounted to EUR
197\u00a0thousand (2022: EUR 36 thousand).
ING shares held by key management personnel
Number of ING Groep N.V. shares to key management personnel
ING Groep N.V. shares
in numbers
2023
2022
Executive Board members
128,241
108,217
Management Board Banking
262,507
294,574
Supervisory Board members
5,295
5,295
Total number of shares
396,043
408,086
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46\u00a0 Related parties
In the normal course of business, ING Group enters into various transactions with related parties. Parties are
considered to be related if one party has the ability to control or exercise significant influence over the other
party in making financial or operating decisions. Related parties of ING Group include, among others, its
associates, joint ventures, key management personnel, and various defined benefit and contribution plans.
For post-employment benefit plans, reference is made to Note 33 'Pensions and other post-employment
benefits' Transactions between related parties include rendering or receiving of services, leases, transfers
under finance arrangements and provisions of guarantees or collateral. All transactions with related parties
took place at conditions customary in the market. There are no significant provisions for doubtful debts or
individually significant bad debt expenses recognised on outstanding balances with related parties.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:549300NYKK9MWM7GGW15", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "f-792": { "value": "
Key management personnel compensation
The Executive Board of ING Groep N.V., the Management Board Banking and the Supervisory Board are
considered Key Management personnel of ING Group. In 2023 and 2022, the three members of the
Executive Board of ING Groep N.V. were also members of the Management Board Banking.
Transactions with key management personnel, including their compensation are included in the tables
below.
Key management personnel compensation (Executive Board and Management Board Banking)
2023
in EUR thousands
Executive Board
of ING Groep N.V.
Management
Board Banking 1
Total
Fixed Compensation
\u2013\u00a0 Base salary
4,220
4,200
8,420
\u2013\u00a0 Collective fixed allowances 2
1,002
887
1,889
\u2013\u00a0 Pension costs
78
107
185
\u2013\u00a0 Severance benefits
734
734
Variable compensation
\u2013\u00a0 Upfront cash
598
598
\u2013\u00a0 Upfront shares
293
598
891
\u2013\u00a0 Deferred cash
897
897
\u2013\u00a0 Deferred shares
439
897
1,336
\u2013\u00a0 Other emoluments 3
344
487
832
Total compensation
6,376
9,405
15,782
1 Excluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 128,810.
3 This includes expatriate allowances (such as housing, school/tuition fees and international health insurances, if applicable); banking
and insurance benefits from ING (on the same terms as for other employees of ING in the Netherlands); tax and financial planning
services to ensure compliance with the relevant legislative requirements; reimbursement of costs under the Directors & Officers
indemnity provided by ING; the use of a company car or driver service.
Key management personnel compensation (Executive Board and Management Board Banking)
2022
Executive Board of
ING Groep N.V.
Management Board
Banking 1
Total
in EUR thousands
Fixed Compensation
\u2013\u00a0 Base salary
4,220
4,969
9,189
\u2013\u00a0 Collective fixed allowances\u00a0 2
1,011
1,073
2,084
\u2013\u00a0 Pension costs
70
116
186
\u2013\u00a0 Severance benefits
932
932
Variable compensation
\u2013\u00a0 Upfront cash
803
803
\u2013\u00a0 Upfront shares
268
803
1,071
\u2013\u00a0 Deferred cash
1,204
1,204
\u2013\u00a0 Deferred shares
401
1,204
1,605
\u2013\u00a0 Other emoluments 3
296
638
934
Total compensation
6,266
11,742
18,008
1 Excluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 114,866.
3 This includes amongst others: housing, school/tuition fees, international health insurance, relocation costs and tax and financial
planning.
ING indemnifies the members of the EB against direct financial losses in connection with claims from third
parties filed, or threatened to be filed, against them by virtue of their service as a member of the EB, as far
as permitted by law, on the conditions laid down in the Articles of Association and their commission
contract. ING has taken out liability insurance for the members of the EB.
In accordance with the Articles of Association ING indemnifies the members of the Supervisory Board as far
as legally permitted against direct financial losses in connection with claims from third parties filed or
threatened to be filed against them by virtue of their service as a member of the Supervisory Board.
Key management personnel compensation is generally included in Staff expenses in the statement of profit
or loss. The total remuneration of the Executive Board and Management Board Banking is disclosed in the
table above. Under IFRS, certain components of variable remuneration are not recognised in the statement
of profit or loss directly, but are allocated over the vesting period of the award. The comparable amount
recognised in Staff expenses in 2023 relating to the fixed expenses of 2023 and the vesting of variable
remuneration of earlier performance years, is EUR 14 million in 2023 (2022: EUR 14 million).
The table below shows the total of fixed remuneration, expense allowances and attendance fees for the
Supervisory Board in 2023 and 2022.
Key management personnel compensation (Supervisory Board)
in EUR thousands
2023
2022
Total compensation
1,152
1,048
Loans and advance to key management personnel
As at 31 December 2023 Loans and advances outstanding to key management personnel amounted to EUR
1.7 million (2022: EUR 2.7 million) and loan commitments to key management personnel amounted to EUR
138 thousand (2022: EUR 203\u00a0thousand). Total interest received in 2023 on these loans and advances
amounted to EUR 30 thousand (2022: EUR 62 thousand).
These loans and advances and loan commitments (1) were made in the ordinary course of business, (2)
were granted on conditions that are comparable to those of loans and advances granted to all employees
and (3) did not involve more than the normal risk of collectability or present other unfavourable features.
Loans and advances to members of the Executive Board and Management Board Banking are compliant
with the standards set out in the DNB guidelines for loans to officers and directors of a regulated entity,
such as ING.
Deposits outstanding to key management personnel
As at 31 December 2023 Deposits outstanding from key management personnel amounted to EUR 13.9
million (2022: EUR 11.5 million). Total interest paid in 2023 on these deposits amounted to EUR
197\u00a0thousand (2022: EUR 36 thousand).
ING shares held by key management personnel
Number of ING Groep N.V. shares to key management personnel
ING Groep N.V. shares
in numbers
2023
2022
Executive Board members
128,241
108,217
Management Board Banking
262,507
294,574
Supervisory Board members
5,295
5,295
Total number of shares
396,043
408,086
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47\u00a0 Capital management
Objectives
Group Treasury (\u201cGT\u201d) Balance Sheet & Capital Management, is responsible for maintaining the adequate
capitalisation of ING Group and ING Bank entities, to manage the risk associated with ING\u2019s business
activities. This involves not only managing, planning and allocating capital within ING Group, ING Bank and
its various entities, but also helping to execute necessary capital market transactions, term (capital) funding
and risk management transactions. ING takes an integrated approach to assess the adequacy of its capital
position in relation to its risk profile and operating environment. This means GT Balance Sheet & Capital
Management takes into account both regulatory and internal, economic based metrics and requirements as
well as the interests of key stakeholders such as shareholders and rating agencies.
ING applies the following main capital definitions:
\u2022 Common equity Tier 1 capital (CET1) - is defined as shareholders\u2019 equity less regulatory adjustments.
CET1 capital divided by risk-weighted assets equals the CET1 ratio.
\u2022 Tier 1 capital \u2013 is defined as CET1 capital plus Additional Tier 1 (hybrid) securities and other regulatory
adjustments. Tier 1 capital divided by risk-weighted assets equals the Tier 1 capital ratio.
\u2022 Total capital \u2013 is Tier 1 capital plus subordinated Tier 2 liabilities and regulatory adjustments. Total capital
divided by risk-weighted assets equals the Total capital ratio.
\u2022 CET1 ratio target \u2013 is built on the CET1 requirements specified for ING, potential increase in the regulatory
requirement of the Countercyclical Buffer, the potential impact of a standardised and pre-determined
stress scenario and general uncertainties.
\u2022 Leverage ratio (LR) \u2013 is defined as Tier 1 capital divided by the leverage exposure.
\u2022 Total Loss Absorbing Capacity (TLAC) \u2013 is Total capital plus senior unsecured bonds and amortisations.
TLAC ratios are based on both risk-weighted assets and leverage exposure.\u00a0
\u2022 Minimum Required Eligible Liabilities (MREL) \u2013 is Total capital plus senior unsecured bonds and
amortisations. MREL ratios are based on both risk-weighted assets and leverage exposure.\u00a0
Capital developments
ING\u2019s capital position remained strong despite the challenging geopolitical environment. At both the
consolidated and entity level, ING has sufficient buffers to withstand various stressed scenarios.\u00a0
ING\u2019s CET1 target level of around 12.50% is well above the prevailing Maximum Distributable Amount (MDA)
level of 10.98%, implying a management buffer of about 150 basis points.
ING Group\u2019s capital ratios at the end of the year increased compared to 2022 primarily due to higher net
profit after dividend reserving, coupled with lower risk-weighted assets. Besides the regular 50% dividend
distribution, ING distributed an additional EUR 1.5 billion and EUR 2.5 billion as next steps to converge the
CET1 ratio towards ING\u2019s CET1 target by 2025. Risk-weighted assets were mainly impacted by volume
reduction in Russia-related exposure, currency movements, improvement in book quality and model
impacts.
ING Groep N.V. has a CET1 ratio of 14.7% at 31 December 2023 versus an overall SREP requirement
(including buffer requirements) of 10.98%. The Group\u2019s Tier 1 ratio increased to 16.9%. The Total capital ratio
increased from 19.4% to 19.8% compared to last year.
ING Bank N.V. has a CET1 ratio of 11.9% versus an overall CET1 requirement (including buffer requirements)
of 7.50%. The Bank\u2019s Tier 1 ratio decreased from 14.5% to 14.1% compared to last year. The Banks\u2019s Total
capital ratio decreased to 17.0%.
ING Group capital position according to CRR II / CRD V
in EUR million
2023
2022
Shareholders\u2019 equity 1
51,240
49,909
- Interim profits not included in CET1 capital
-2,504
-1,411
- Other adjustments
-1,880
-537
Regulatory adjustments
-4,384
-1,948
Available common equity Tier 1 capital
46,856
47,961
Additional Tier 1 securities
6,983
6,295
Regulatory adjustments additional Tier 1
59
60
Available Tier 1 capital
53,898
54,316
Supplementary capital Tier 2 bonds 2
9,115
10,046
Regulatory adjustments Tier 2
40
-32
Available Total capital
63,052
64,330
Risk weighted assets
319,169
331,520
Common equity Tier 1 ratio
14.68%
14.47%
Tier 1 ratio
16.89%
16.38%
Total capital ratio
19.76%
19.40%
1 Shareholders' equity is determined in accordance with IFRS-EU.
2 All T2 securities are CRR/CRD V-compliant for 2023.
In accordance with the applicable regulation, credit and operational risk models used in the capital ratios
calculations are not audited.
ING Bank capital position according to CRR II / CRD V
in EUR million
2023
2022
Shareholders\u2019 equity 1
40,191
42,546
-Interim profits not included in CET1 capital
-766
-913
- Other adjustments
-1,029
332
Regulatory adjustments
-1,795
-580
Available common equity Tier 1 capital
38,396
41,966
Additional Tier 1 securities
6,962
6,280
Regulatory adjustments additional Tier 1
86
78
Available Tier 1 capital
45,444
48,324
Supplementary capital Tier 2 bonds 2
9,115
10,046
Regulatory adjustments Tier 2
54
41
Available Total capital
54,613
58,411
Risk weighted assets
321,358
332,853
Common equity Tier 1 ratio
11.95%
12.61%
Tier 1 ratio
14.14%
14.52%
Total capital ratio
16.99%
17.55%
1 Shareholders' equity is determined in accordance with IFRS-EU.
2 All T2 securities are CRR/CRD V-compliant for 2023.
Distribution
ING\u2019s distribution policy is a pay-out ratio of 50% of resilient net profit. Resilient net profit is defined as net
profit adjusted for significant items not linked to the normal course of business. The 50% pay-out may be in
the form of cash, or a combination of cash and share repurchases, with the majority in cash. Additional
distributions to be considered periodically, taking into account alternative opportunities, macro-economic
circumstances and the outcome of our capital planning.
For 2023, the resilient net profit amounts to EUR 7,520 million, of which EUR 3,760 million was reserved for
distribution outside of CET1 capital reflecting ING\u2019s distribution policy of a 50% pay-out ratio. Resilient net
profit includes a positive adjustment to the net profit of EUR 234 million related to hyperinflation accounting
according to IAS 29 in the consolidation of our subsidiary in T\u00fcrkiye and the impairment of the goodwill
allocated to T\u00fcrkiye.
Following ING\u2019s distribution policy of a 50% pay-out ratio on resilient net profit:
\u2022 A final dividend over 2022 of EUR 0.389 per share was paid was paid in May 2023.\u00a0
\u2022 An interim dividend over 2023 of EUR 0.350 per share was paid on 14 August 2023.
\u2022 The Board has proposed to pay a final cash dividend over 2023 of EUR 0.756 per share. This is subject to
the approval by shareholders at the Annual General Meeting in April 2024.
In addition to this, ING announced an additional EUR 1.5 billion and EUR 2.5 billion distribution in 2023:
\u2022 An additional distribution of EUR 1.5 billion, by means of a share buyback programme, was announced
on 11 May 2023. Between 11 May 2023 and 13 October 2023, 121.3 million of ordinary shares have been
repurchased with a total consideration of EUR 1,566 million.
\u2022 An additional distribution of EUR 2.5 billion, by means of a share buyback programme, was announced
on 2 November 2023. Between 3 November 2023 and 5 February 2024, 194.8 million of ordinary shares
have been repurchased with a total consideration of EUR 2,508 million.
Processes for managing capital
GT Balance Sheet & Capital Management ensures adherence to ING\u2019s solvency risk appetite statements by
planning and executing capital management transactions. The ongoing assessment and monitoring of
capital adequacy is embedded in the capital planning process as part of the ICAAP framework. As part of the
dynamic business planning process, ING prepares a capital and funding plan on a regular basis for all its
material businesses and assesses continuously the timing, need and feasibility for capital management
actions in scope of its execution strategy. Sufficient financial flexibility should be preserved to meet
important financial objectives. Risk appetite statements are at the foundation of the capital plan and are
cascaded to the different businesses in line with ING\u2019s risk management framework. Contingency capital
measures and early warning indicators are in place in conjunction with ING\u2019s contingency and recovery plan
to support the strategy in times of stress.
Adverse planning and stress testing, which reflect the outcome of the annual risk assessment, are integral
components of ING\u2019s risk and capital management framework. It allows to (i) identify and assess potential
vulnerabilities in ING\u2019s businesses, business model, portfolios or operating environment; (ii) understand the
sensitivities of the core assumptions used in ING\u2019s strategic and capital plan; and (iii) improve decision-
making and business steering through balancing risk and return following a forward looking and prudent
management approach.
Regulatory requirements
Capital adequacy and the use of required regulatory capital are based on the guidelines developed by the
Basel Committee on Banking Supervision (The Basel Committee) and the European Union Directives, as
implemented by the Dutch Central Bank and the ECB for supervisory purposes. In 2010, the Basel Committee
issued new solvency and liquidity requirements that superseded Basel II, implemented in the EU via CRR /
CRD. In accordance with the CRR the minimum Pillar 1 capital requirements applicable to ING Group are: a
CET1 ratio of 4.5%, a Tier 1 ratio of 6.0% and a Total capital ratio of 8.0% of risk-weighted assets.
The overall SREP CET1 requirement (including buffer requirements) for ING Group at a consolidated level
increased during 2023 due to changes in the Countercyclical Buffer and was 10.98% at the end of December
2023. This requirement is the sum of a 4.5% Pillar I requirement, a 0.98% Pillar II requirement, a 2.5% Capital
Conservation Buffer (CCB), a 0.50% Countercyclical Buffer (CCyB) and a 2.5% O-SII (Other Systemically
Important Institutions) buffer that is set separately for Dutch systemic banks by the Dutch Central Bank (De
Nederlandsche Bank). This requirement excludes the Pillar II guidance, which is not disclosed.
ING\u2019s fully loaded CET1 requirement stood at 10.76% in 4Q2023 (4Q2022: 10.98%), which is lower than the
prevailing CET1 ratio requirement as a result of the reduction in the Pillar II requirement applicable as of 1
January 2024 and a 0.50% lower O-SII buffer requirement effective as of 31 May 2024. This is partly offset
by various countercyclical buffers becoming effective over the coming quarters. The fully loaded CET1
requirement of 10.76% also reflects the increase from the re-activation of the countercyclical buffer in
Belgium to 1% from 4Q2024 which will be phased in over the coming quarters.
The Maximum Distributable Amount (MDA) trigger level stood at 10.98% in 4Q2023 for CET1, 12.81% for Tier
1 Capital and 15.25% for Total Capital. These MDA levels are in line with the application of Art.104a in CRD V,
which allows ING to partly fulfill the total Pillar II requirement (1.75%) with Additional Tier 1 and Tier 2
capital. As per 1 January 2024, the Pillar II requirement is 1.65%. As per 1 January 2023 a MDA requirement
on the leverage ratio of 3.5% applies to ING Group. In the event that ING Group breaches an MDA level, ING
may face restrictions on dividend payments, coupons on AT1 securities and payment of variable
remuneration.
Ratings
ING\u2019s credit ratings and outlook are shown in the table below. Each of these ratings reflects only the view of
the applicable rating agency at the time the rating was issued, and any explanation of the significance of a
rating may be obtained only from the rating agency.
Main credit ratings of ING at 31 December 2023
S&P
Moody\u2019s
Fitch
GBB-Rating
ING Groep N.V.
Issuer rating
Long-term
A-
n/a
A+
Short-term
A-2
n/a
F1
Outlook
Stable
Stable 1)
Stable
Senior unsecured rating
A-
Baa1
A+
ING Bank N.V.
Issuer rating
Long-term
A+
A1
AA-
A+
Short-term
A-1
P-1
F1+
n/a
Outlook
Stable
Stable
Stable
Indeterminate
Senior unsecured rating
A+
A1
AA-
1 Outlook refers to the senior unsecured rating.
A security rating is not a recommendation to buy, sell or hold securities and each rating should be
evaluated independently of other ratings. There is no assurance that any credit rating will remain in effect
for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by the
rating agency if, in the rating agency\u2019s judgment, circumstances so warrant. ING accepts no responsibility
for the accuracy or reliability of the ratings.
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48\u00a0 Subsequent events
There are no subsequent events to report other than those already disclosed in Note 42 'Legal proceedings'
and Note 47 'Capital management'.
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