SECURITIES
AND
EXCHANGE
COMMISSION
Report
of
Foreign
Private
Issuer
Pursuant
to
Rule
13a-16
or
15d-16
under
the
Securities
Exchange
Act
of
1934
For
the
period
ended
30
June
2020
Commission
File
Number
1-14642
Indicate
by
check
mark
whether
the
registrant
files
or
will
file
annual
reports
under
cover
of
Form
20-F
or
Form
20-F
[x]
Form
40-F
[
]
Indicate
by
check
mark
if
the
registrant
is
submitting
the
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6-K
in
paper
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permitted
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S-T
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the
registrant
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submitting
the
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6-K
in
paper
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permitted
by
Regulation
S-T
This
Report
on
Form
6-K
is
hereby
incorporated
by
reference
into
the
Registration
Statements
on
Form
S-8
(Files
Nos.
333-215535,
333-172921,
333-172920,
333-172919,
333-168020,
333-165591,
333-158155,
333-
158154,
333-149631,
333-137354,
333-125075,
333-108833,
333-81564
and
333-92220)
of
ING
Groep
N.V.
and
shall
be
a
part
thereof
from
the
date
on
which
this
Report
is
furnished,
to
the
extent
not
superseded
by
documents
or
reports
subsequently
filed
or
furnished.
Presentation
of
information
The
condensed
consolidated
inte
rim
financial
statements
included
in
this
report
on
Form
6-K
are
prepared
in
accordance
with
International
Accounting
Standard
34
‘Interim
Financial
Reporting’
as
adopted
by
the
International
Accounting
Standards
Board
(‘IFRS
-IASB’).
In
preparing
the
financial
statements
in
this
document,
except
as
described
otherwise,
the
same
accounting
principles
are
applied
as
in
ING
Groep
N.V.’s
Annual
Report
on
Form
20-F
for
the
year
ended
31
December
2019
(the
“2019
Form
20-F”).
In
this
document,
references
to
“ING
Groep
N.V.”,
“ING
Groep”
and
“ING
Group”
refer
to
ING
Groep
N.V.
and
references
to
“ING”,
the
“Company”,
the
“Group”,
“we”
and
“us”
refer
to
ING
Groep
N.V.
and
its
consolidated
subsidiaries.
All
references
to
IFRS-IASB
in
this
document
refer
to
International
Financial
Reporting
Standards
(“IFRS”)
as
issued
by
the
International
Accounting
Standards
Board
(“IASB”).
ING
prepares
financial
information
in
accordance
with
IFRS
as
issued
by
the
IASB
for
purposes
of
reporting
with
the
SEC,
including
financial
information
contained
in
the
2019
Form
20-F.
ING
Group’s
accounting
policies
under
IFRS
-IASB
are
described
under
“Basis
of
preparation
and
accounting
policies”
beginning
on
page
F-13
in
the
consolidated
financial
statements
contained
in
the
2019
Form
20-F.
All
references
to
IFRS-EU
in
this
document
refer
to
IFRS
as
adopted
by
the
European
Union
(“EU”),
including
the
decisions
made
by
ING
Group
with
respect
to
the
options
available
under
IFRS
as
adopted
by
the
EU.
ING
also
prepares
financial
information
in
accordance
with
IFRS
-EU,
including
the
decisions
ING
made
with
regard
to
the
options
available
under
IFRS
-EU.
Unless
otherwise
indicated,
financial
information
included
in
this
document
has
been
prepared
in
accordance
with
IFRS
-EU.
Other
than
for
the
purpose
of
SEC
reporting,
ING
Group
intends
to
continue
to
prepare
its
annual
accounts
under
IFRS
-EU.
For
an
explanation
of
the
differences
between
IFRS
-IASB
and
IFRS
-EU,
see
page
F-14
of
the
2019
Form
20-F.
For
a
reconciliation
between
IFRS
-EU
and
IFRS
-IASB
as
of
and
for
the
years
ended
31
December
2019,
2018
and
2017,
see
Note
1.3.2
to
the
consolidated
financial
statements
contained
in
the
2019
Form
20-F.
For
a
reconciliation
between
IFRS
-EU
and
IFRS
-IASB
as
of
and
for
the
six
months
ended
30
June
2020,
see
Note
“Basis
of
preparation
and
accounting
policies”
of
this
document.
Capital
measures
included
in
this
document
are
based
on
IFRS
-EU,
as
this
is
the
primary
accounting
basis
for
statutory
and
regulatory
reporting
used
by
ING
Group.
Certain
amounts
set
forth
herein,
such
as
percentages,
may
not
sum
due
to
rounding.
This
document
contains
inactive
textual
addresses
to
Internet
websites
operated
by
us
and
third
parties.
Reference
to
such
websites
is
made
for
information
purposes
only,
and
information
found
at
such
websites
is
not
incorporated
by
reference
into
this
document.
ING
does
not
make
any
representation
or
warranty
with
respect
to
the
accuracy
or
completeness
of,
or
take
any
responsibility
for,
any
information
found
at
any
websites
operated
by
third
parties.
ING
specifically
disclaims
any
liability
with
respect
to
any
information
found
at
websites
operated
by
third
parties.
ING
cannot
guarantee
that
websites
operated
by
third
parties
remain
available
following
the
publication
of
this
document,
or
that
any
information
found
at
such
websites
will
not
change
following
the
filing
of
this
document.
Many
of
those
factors
are
beyond
ING’s
control.
This
document
does
not
constitute
an
offer
to
sell,
or
a
solicitation
of
an
offer
to
purchase,
any
securities
in
the
United
States
or
any
other
jurisdiction.
Forward
-
Certain
of
the
statements
contained
herein
are
not
historical
facts,
including,
without
limitation,
certain
statements
made
of
future
expectations
and
other
forward
-looking
statements
that
are
based
on
management’s
current
views
and
assumptions
and
involve
known
and
unknown
risks
and
uncertainties
that
could
cause
actual
results,
performance
or
events
to
differ
materially
from
those
expressed
or
implied
in
such
statements.
Actual
results,
performance
or
events
may
differ
materially
from
those
in
such
statements
due
to
a
number
of
factors,
including,
without
limitation:
(1)
changes
in
general
economic
conditions,
in
particular
economic
conditions
in
ING’s
core
markets,
including
changes
affecting
currency
exchange
rates,
(2)
the
effects
of
the
Covid-19
pandemic
and
related
response
measures,
including
lockdowns
and
travel
restrictions,
on
economic
conditions
in
countries
in
which
ING
operates,
on
ING’s
business
and
operations
and
on
ING’s
employees,
customers
and
counterparties,
(3)
changes
affecting
interest
rate
levels,
(4)
any
default
of
a
major
market
participant
and
related
market
disruption,
(5)
changes
in
performance
of
financial
markets,
including
in
Europe
and
developing
markets,
(6)
changes
in
the
fiscal
position
and
the
future
economic
performance
of
the
United
States,
including
potential
consequences
of
a
downgrade
of
the
sovereign
credit
rating
of
the
US
government,
(7)
consequences
of
the
United
Kingdom’s
withdrawal
from
the
European
Union,
(8)
changes
in
or
discontinuation
of
‘benchmark’
indices,
(9)
inflation
and
deflation
in
our
principal
markets,
(10)
changes
in
conditions
in
the
credit
and
capital
markets
generally,
including
changes
in
borrower
and
counterparty
creditworthiness,
(11)
failures
of
banks
falling
under
the
scope
of
state
comp
ensation
schemes,
(12)
non-compliance
with
or
changes
in
laws
and
regulations,
including
those
financial
services
and
tax
laws,
and
the
interpretation
and
application
thereof,
(13)
geopolitical
risks,
political
instabilities
and
policies
and
actions
of
governmental
and
regulatory
authorities,
(14)
ING’s
ability
to
meet
minimum
capital
and
other
prudential
regulatory
requirements,
(15)
outcome
of
current
and
future
litigation,
enforcement
proceedings,
investigations
or
other
regulatory
actions,
including
claims
by
customers,
(16)
operational
risks,
such
as
system
disruptions
or
failures,
breaches
of
security,
cyber-attacks,
human
error,
changes
in
operational
practices
or
inadequate
controls
including
in
respect
of
third
parties
with
which
(17)
risks
and
challenges
related
to
cybercrime
including
the
effects
of
cyber-attacks
and
changes
in
legislation
and
regulation
related
to
cybersecurity
and
data
privacy,
(18)
changes
in
general
competitive
factors,
(19)
the
inability
to
protect
our
intell
ectual
property
and
infringement
claims
by
third
parties,
(20)
changes
in
credit
ratings,
(21)
business,
operational,
regulatory,
reputation
and
other
risks
and
challenges
in
connection
with
climate
change,
(22)
inability
to
attract
and
retain
key
personne
l,
(23)
future
liabilities
under
defined
benefit
retirement
plans,
(24)
failure
to
manage
business
risks,
including
in
connection
with
use
of
models,
use
of
derivatives,
or
maintaining
appropriate
policies
and
guidelines,
(25)
changes
in
capital
and
credit
markets,
including
interbank
funding,
as
well
as
customer
deposits,
which
provide
the
liquidity
and
capital
required
to
fund
our
operations,
(26)
the
other
risks
and
uncertainties
detailed
in
the
most
recent
annual
report
on
Form
20-F
of
ING
Groep
N.V.
(including
the
Risk
Factors
contained
therein)
and
ING’s
more
recent
disclosures,
including
press
releases,
which
are
available
on
www.ING.com.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
4
Contents
5
12
Condensed
consolidated
interim
financial
statements
25
26
28
29
31
Notes
to
the
Condensed
consolidated
interim
financial
statements
1
33
2
36
3
36
4
38
5
39
6
39
7
41
8
42
9
43
10
43
11
44
12
44
13
46
14
47
15
47
16
48
17
49
18
49
Additional
notes
to
the
Condensed
consolidated
interim
financial
statements
19
56
20
65
21
67
22
67
23
67
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
5
Introduction
ING
is
a
global
financial
institution
with
a
strong
European
base,
offering
banking
services
through
its
operating
company
ING
Bank.
ING
Bank’s
more
than
55,000
employees
offer
retail
and
wholesale
banking
services
to
customers
in
over
40
countries.
Steven
van
Rijswijk,
previously
member
of
the
Executive
Board
and
chief
risk
officer
of
ING,
has
succeeded
Ralph
Hamers
as
CEO
and
chairman
of
the
Executive
Board.
The
Supervisory
Board
has
appointed
Steven
van
Rijswijk
effective
1
July
2020.
Covid
-
The
spread
of
Covid-19
in
the
first
half
of
2020
and
its
development
into
a
global
pandemic
affected
ING
in
a
number
of
ways,
impacting
our
customers,
operations
and
employees
and
the
communities
where
we
operate.
Supported
by
ING’s
digital
focus,
most
of
our
employees
worldwide
continue
to
work
from
home,
providing
an
uninterrupted,
high
standard
of
service
to
our
customers.
ING
put
measures
in
place
to
help
customers
deal
with
the
impact
of
the
pandemic
on
their
finances.
This
included
extensions
of
loan
repayments
for
SME
and
retail
customers
in
various
countries.
ING
also
works
with
larger
corporate
clients
to
deliver
solutions
tailored
to
their
specific
needs.
The
economic
impact
of
the
Covid-19
pandemic
and
the
impact
of
IFRS
-9
methodology
have
resulted
in
significantly
higher
Expected
Credit
Losses,
which
have
impacted
ING’s
net
profit
for
the
first
half
of
2020.
As
a
result
of
the
impairment
test
triggered
by
the
Covid-19
pandemic,
ING
also
recognised
€310
million
as
an
impairment
of
goodwill
on
its
balance
sheet
in
the
reporting
period.
More
information
on
the
impact
of
Covid-19
on
ING
as
well
on
the
related
risk
measures
taken
to
address
the
impact
can
be
found
in
the
section
“Risk
Management”.
The
financial
impact
on
the
Covid
-19
related
crisis
can
be
found
in
the
section
“ING
Group
consolidated
results”
and
throughout
the
financial
statements
As
a
reaction
to
the
ongoing
global
pandemic,
regulators
have
introduced
a
number
of
changes
to
regulatory
capital
requirement
reliefs
that
are
also
applicable
to
ING.
More
information
on
this
can
be
found
in
the
section
“business
environment”
of
this
report
and
note
“Capital
Management”
of
the
interim
financial
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
6
ING
Group
consolidated
results
ING
Group:
Consolidated
profit
or
loss
account
6
month
period
(1
January
to
30
June)
the
IFRS
-EU
'IAS
39
carve
out'
of
which:
Total
ING
Group
2020
2019
2020
2019
2020
2019
6,877
6,896
–54
–57
6,931
6,953
Net
fee
and
commission
income
1,506
1,386
1,506
1,386
Total
investment
and
other
income
305
–134
–439
–1,036
745
902
8,688
8,148
–493
–1,093
9,182
9,241
Expenses
excl.
Regulatory
costs
4,963
4,626
4,963
4,626
663
612
663
612
5,626
5,238
5,626
5,238
3,062
2,910
–493
–1,093
3,556
4,003
Addition
to
loan
loss
provisions
1,998
416
1,998
416
1,065
2,493
–493
–1,093
1,558
3,586
Taxation
438
740
–115
–243
553
983
Non-controlling
interests
36
47
36
47
591
1,707
–379
–850
969
2,556
ING
Group
monitors
and
evaluates
the
performance
of
ING
Group
at
a
consolidated
level
and
by
segment
using
results
based
on
figures
according
to
IFRS
as
adopted
by
the
European
Union
(IFRS
-EU).
The
Executive
Board
and
the
Management
Board
Banking
consider
this
measure
to
be
relevant
to
an
understanding
of
the
Group’s
financial
performance,
because
it
allows
investors
to
understand
the
primary
method
used
by
management
to
evaluate
the
Group’s
operating
performance
and
make
decisions
about
allocating
resources.
In
addition,
ING
Group
believes
that
the
presentation
of
results
in
accordance
with
IFRS
-EU
helps
investors
compare
its
segment
performance
on
a
meaningful
basis
by
highlighting
result
before
tax
attributable
to
ongoing
operations
and
the
profitability
of
the
segment
businesses.
IFRS
-EU
result
is
derived
by
excluding
from
IFRS
-IASB
the
impact
of
the
IFRS
-EU
‘IAS
39
carve
out’
adjustment.
The
IFRS-EU
‘IAS
39
carve-out’
adjustment
relates
to
fair
value
portfolio
hedge
accounting
strategies
for
the
mortgage
and
savings
portfolios
in
the
Benelux,
Germany
and
Other
Challengers
that
are
not
eligible
under
IFRS-
IASB.
As
no
hedge
accounting
is
applied
to
these
mortgage
and
savings
portfolios
under
IFRS-IASB,
the
fair
value
changes
of
the
derivatives
are
not
offset
by
fair
value
changes
of
the
hedge
items
(mortgages
and
savings).
As
from
the
financial
year
2020
the
information
presented
to
the
Executive
Board
is
no
longer
based
on
underlying
results
but
on
IFRS
as
endorsed
by
the
European
Union.
Previously
monitoring
and
evaluation
of
ING
Group’s
segments
was
based
a
non-GAAP
financial
performance
measure
called
underlying.
Underlying
result
was
derived
by
excluding
from
IFRS
the
following:
special
items,
the
impact
of
divestments
and
results
from
former
insurance
related
activities.
In
2020
and
2019
no
special
items,
divestments
or
former
insurance
related
results
were
recorded
anymore.
The
breakdown
of
net
result
by
segment
is
included
in
Note
18
‘Segments’.
ING
Group:
reconciliation
from
IFRS
-IASB
to
IFRS-EU
6
month
period
(1
January
to
30
June)
2020
2019
Net
result
ING
Group
IFRS-IASB
591
1,707
-/-
Adjustment
of
the
EU
'IAS
39
carve
out'
–379
–850
Net
result
ING
Group
IFRS-EU
969
2,556
Consolidated
results
of
operations
ING’s
net
result
in
the
first
half
of
2020
decreased
to
€591
million,
or
65.4%,
compared
with
€1,707
million
in
the
same
period
of
2019.
This
decrease
in
result
was
affected
by
€471
million
less
negative
fair
value
changes
on
derivatives
(including
a
negative
impact
under
net
interest
income
of
ending
some
hedge
relationships)
related
to
hedging
mortgage
and
savings
portfolios
in
the
Benelux,
Germany,
France
and
Czech
Republic.
These
negative
fair
value
changes
are
mainly
caused
by
changes
in
markets
interest
rates.
No
fair
value
hedge
accounting
is
applied
to
these
mortgage
and
savings
portfolios
under
IFRS
-IASB.
Including
the
compensating
positive
hedge
adjustment
on
those
portfolios
as
applied
under
IFRS
-EU,
the
net
result
decreased
62.1%
to
€969
million,
compared
with
€2,556
million
in
the
same
period
of
2019.
The
decline
was
primarily
caused
by
elevated
risk
costs
reflecting
the
(expected)
economic
impact
of
the
Covid-19
pandemic,
including
higher
Individual
Stage
3
provisions,
and
€310
million
of
impairments
on
goodwill.
Including
the
aforementioned
compensating
hedge
adjustment,
the
effective
tax
rate
was
35.5%
compared
with
27.4%
in
the
first
half
of
2019.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
7
The
result
before
tax
declined
57.3%
to
€1,065
million
from
€2,493
million
in
the
first
six
months
of
2019.
Including
the
aforementioned
compensating
hedge
adjustment,
the
result
before
tax
fell
56.6%
to
€1,558
million
from
€3,586
million
in
the
first
half
of
2019,
predominantly
due
to
€1,582
million
higher
risk
costs,
but
also
due
to
higher
expenses
and
lower
income.
Income
decreased
0.6%
as
the
first
half
of
2019
had
included
a
€119
million
one-off
gain
related
to
the
release
of
a
currency
translation
reserve
and
a
€79
million
receivable
related
to
the
insolvency
of
a
financial
institution.
Excluding
these
one-off
items,
income
was
1.5%
higher,
mainly
due
to
higher
fee
income
on
investment
products
and
higher
income
from
Financial
Markets,
which
more
than
offset
the
impact
of
lower
interest
margins
on
customer
deposits.
Operating
expenses
rose
by
€388
million,
or
7.4%,
on
the
first
six
months
of
2019,
mainly
due
to
€310
million
of
goodwill
impairments.
Net
interest
income
decreased
by
€19
million,
or
0.3%,
to
€6,877
million
in
the
first
six
months
of
2020,
but
when
including
the
aforementioned
compensating
hedge
adjustment,
net
interest
income
income
decreased
by
€22
million,
or
0.3%,
to
€6,931
million
in
the
first
six
months
of
2020.
The
interest
result
on
customer
deposits
declined
due
to
lower
interest
margins
on
both
savings
and
current
accounts
caused
by
lower
reinvestment
yields,
while
average
current
account
volumes
increased.
The
interest
result
on
customer
lending
was
higher
compared
with
the
same
period
a
year
ago,
due
to
improved
interest
margins
on
residential
mortgages
combined
with
higher
lending
volumes.
Higher
interest
results
at
Treasury
(supported
by
the
introduction
of
the
ECB’s
two-tiering
system
at
the
end
of
October
2019)
and
Financial
Markets
(which
can
be
volatile),
were
offset
by
lower
net
interest
income
in
the
Corporate
Line.
ING’s
overall
net
interest
margin,
which
is
defined
as
net
interest
income
divided
by
the
average
balance
sheet
total,
decreased
by
7
basis
points
to
1.47%,
from
1.54%
in
the
first
half
of
2019.
Net
fee
and
commission
income
increased
8.7%
to
€1,506
million
from
€1,386
million
one
year
ago.
In
Retail
Banking,
net
fee
and
commission
income
rose
by
€94
million.
This
was
mainly
driven
by
higher
fee
income
on
investment
products,
predominantly
in
Germany,
while
fee
income
on
daily
banking
products
was
lower
reflecting
a
reduction
of
(international)
payment
transactions
following
the
lockdown
measures
related
to
the
Covid-19
pandemic.
Total
fee
income
in
Wholesale
Banking
increased
by
€23
million,
predominantly
in
Financial
Markets,
mainly
due
to
higher
deal
activity
in
Global
Capital
Markets,
partly
offset
by
lower
fees
in
Trade
&
Commodity
Finance
as
a
result
of
lower
average
oil
prices.
Total
investment
and
other
income
rose
to
€305
million
in
the
first
six
months
of
2020
from
€-134
million
in
the
same
period
of
last
year.
Including
the
aforementioned
compensating
hedge
adjustment,
total
investment
and
other
income
fell
to
€745
million
from
€902
million
in
the
first
half
of
2019,
which
had
included
a
€119
million
one-off
gain
from
the
release
of
a
currency
translation
reserve
related
to
the
sale
of
ING’s
stake
in
Kotak
Mahindra
Bank
and
a
€79
million
receivable
related
to
the
insolvency
of
a
financial
institution.
Excluding
these
items,
investment
and
other
income
rose
by
€41
million,
or
5.8%,
primarily
in
Financial
Markets.
Operating
expenses
increased
by
€388
million,
or
7.4%,
to
€5,626
million.
Expenses
in
the
first
six
months
of
2020
included
€663
million
of
regulatory
costs,
while
the
same
period
of
2019
included
€612
million
of
regulatory
costs.
Expenses
excluding
regulatory
costs
rose
by
€337
million,
or
7.3%,
to
€4,963
million.
The
increase
was
mainly
caused
by
€310
million
of
goodwill
impairments
related
to
a
number
of
acquisitions
in
the
past.
Also
excluding
this
goodwill
impairment,
expenses
increased
by
0.6%,
mainly
due
to
the
impact
of
collective
-labour-agreement
salary
increases
and
higher
KYC
-related
expenses.
These
increases
were
largely
offset
by
a
value
added
tax
(VAT)
refund
and
the
impact
of
cost
savings
(including
lower
marketing
and
travel
costs
as
a
result
of
the
Covid
-19
restrictions),
while
the
first
half
of
2019
included
a
restructuring
provision
in
Retail
Germany.
The
cost/income
ratio
increased
to
61.3%
from
56.7%
in
the
first
half
of
2019.
Net
additions
to
loan
loss
provisions
were
€1,998
million
compared
with
€416
million
in
the
first
half
of
2019.
Risk
costs
in
the
first
six
months
of
2020
were
severely
impacted
by
a
combination
of
increased
collective
provisioning
reflecting
the
worsened
macro
-economic
indicators
due
to
the
Covid-19
pandemic,
higher
Individual
Stage
3
provisions
and
negative
rating
migration.
Risk
costs
in
the
first
half
of
2020
included
€627
million
of
collective
provision
related
to
the
worsened
macro
-economic
indicators.
Risk
costs
were
annualised
64
basis
points
of
average
customer
lending
compared
with
14
basis
points
in
the
first
half
of
2019.
For
the
followin
g
information
per
business
line
the
IFRS
-EU
measures
are
in
place,
in
line
with
management
reporting.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
8
Retail
Netherlands
posted
a
result
before
tax
of
€1,043
million,
compared
with
€1,132
million
in
the
first
six
months
of
2019.
This
decline
was
mainly
attributable
to
higher
risk
costs
reflecting
the
worsened
macro-
economic
environment,
as
well
as
lower
margins
on
savings
and
current
accounts.
The
impact
of
these
factors
was
partly
offset
by
higher
Treasury
-related
revenues.
Total
income
increased
by
€9
million,
or
0.4%,
to
€2,269
million,
compared
with
€2,260
million
in
the
first
half
of
2019.
Net
interest
income
rose
1.3%,
mainly
due
to
higher
treasury
related
revenues,
which
was
largely
offset
by
lower
net
interest
results
on
savings
and
current
accounts
due
to
lower
margins,
while
average
volumes
continued
to
increase.
Net
interest
results
on
customer
lending
were
stable,
as
lower
average
volumes
were
compensated
by
slightly
higher
margins.
Customer
lending
increased
by
€2.4
billion
in
the
first
half
of
2020.
Net
core
lending
(which
excludes
Treasury
products
and
a
€0.6
billion
decline
in
the
WUB
run-off
portfolio)
decreased
by
€0.9
billion,
of
which
€0.4
billion
was
in
residential
mortgages
and
€0.5
billion
in
other
lending.
In
the
first
half
of
2020
net
customer
deposits
(excluding
Treasury)
grew
by
€11.1
billion,
mainly
in
current
accounts.
Net
fee
and
commission
income
increased
by
€3
million,
or
0.9%,
while
investment
and
other
income
was
€15
million
lower.
Operating
expenses
decreased
by
€7
million,
or
0.6%,
to
€1,088
million
from
€1,095
million
in
the
first
six
months
of
2019.
The
decrease
was
mainly
due
to
lower
expenses
related
to
staff,
marketing
and
travel,
which
were
largely
offset
by
higher
regulatory
costs
and
IT
expenses.
The
net
addition
to
loan
loss
provisions
was
€139
million,
or
17
basis
points
of
average
customer
lending,
in
the
first
six
months
of
2020,
compared
with
€33
million,
or
4
basis
points,
in
the
same
period
of
last
year.
Risk
costs
in
the
first
half
of
2020
included
€90
million
of
collective
provisions
related
to
the
worsened
macro-
economic
indicators,
including
provisioning
related
to
loans
subject
to
a
payment
holiday.
Retail
Belgium,
which
includes
Luxembourg,
posted
a
result
before
tax
of
€-36
million
in
the
first
half
of
2020,
compared
with
€328
million
in
the
same
period
of
2019.
The
decline
was
mainly
attributable
to
higher
risk
costs
reflecting
the
worsened
macro
-economic
environment,
combined
with
lower
income
and
higher
expenses.
Total
income
declined
by
€44
million,
or
3.5%,
to
€1,215
million.
Net
interest
result
decreased
by
€22
million,
or
2.3%,
mainly
reflecting
lower
margins
on
savings
and
current
accounts,
partly
offset
by
higher
net
interest
income
from
mortgages
due
to
improved
margins
and
higher
volumes.
Net
core
lending
(excluding
Treasury)
decreased
by
€0.3
billion
in
the
first
half
of
2020,
fully
in
residential
mortgages.
Net
customer
deposits
(excluding
Treasury)
grew
by
€3.3
billion,
predominantly
in
current
accounts.
Net
fee
and
commission
income
rose
by
€19
million,
or
10.1%,
mainly
due
to
higher
fee
income
on
investment
products.
Investment
and
other
income
declined
by
€41
million,
mainly
due
to
lower
Treasury
-related
revenues,
including
negative
marked
-to-market
movements
of
derivatives
which
are
not
in
hedge
accounting.
Operating
expenses
rose
by
€96
million,
of
which
€43
million
was
caused
by
a
goodwill
impairment
related
to
an
acquisition
in
the
past
by
ING
Belgium.
The
remaining
increase
was
mainly
due
to
higher
regulatory
costs
and
KYC
-related
expenses.
The
net
addition
to
the
provision
for
loan
losses
increased
to
€282
million,
or
annualised
62
basis
points
of
average
customer
lending,
from
€58
million
in
the
first
half
of
2019.
The
increase
in
risk
costs
was
mainly
in
business
lending.
Risk
costs
in
the
first
half
of
2020
included
€65
million
of
collective
provisions
related
to
the
worsened
macro
-economic
indicators,
including
provisioning
related
to
loans
subject
to
a
payment
holiday.
The
remaining
risk
costs
we
re
mainly
related
to
Stage
3
provisioning
on
a
number
of
individual
files.
Retail
Germany,
which
includes
Austria,
recorded
a
first
-half
2020
result
before
tax
of
€494
million,
up
10.0%
from
€449
million
in
the
same
period
of
2019.
The
increase
was
primarily
due
to
higher
income,
partly
offset
by
higher
risk
costs
after
a
net
release
in
the
first
half
of
2019.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
9
Total
income
increased
to
€1,075
million,
up
7.0%
from
€1,005
million
in
the
first
six
months
of
2019.
The
increase
was
driven
by
€92
million
higher
fee
income,
predominantly
on
investment
products
due
to
a
higher
number
of
brokerage
trades
on
the
back
of
market
volatility.
Net
interest
income
increased
0.6%
to
€801
million,
due
to
accounting
asymmetry
in
Treasury
(with
an
offset
in
other
income)
and
higher
margins
on
mortgages,
largely
offset
by
margin
pressure
on
savings.
In
the
first
six
months
of
2020,
net
core
lending
(which
excludes
Treasury
products)
increased
by
€1.5
billion,
of
which
€1.3
billion
was
in
residential
mortgages
and
€0.2
billion
in
consumer
lending.
Net
customer
deposits
(excluding
Treasury)
increased
by
€1.2
billion,
fully
in
current
accounts
while
savings
showed
an
outflow.
Investment
and
other
income
declined
by
€27
million,
mainly
in
Treasury
due
to
the
aforementioned
accounting
asymmetry
and
lower
Operating
expenses
decreased
by
€12
million,
or
2.1%,
to
€567
million
from
€579
million
in
the
first
half
of
2019.
When
adjusted
for
a
€36
million
restructuring
provision
recorded
in
the
first
half
of
last
year,
expenses
increased
by
€24
million.
The
increase
was
mainly
due
to
investments
to
support
business
growth
as
well
as
the
consolidation
of
a
subsidiary
as
from
the
first
half
of
2020,
partly
offset
by
lower
regulatory
costs.
The
net
addition
to
the
provision
for
loan
losses
was
€14
million,
or
3
basis
points
of
average
customer
lending,
in
the
first
half
of
2020,
compared
with
a
net
release
of
€23
million
in
the
same
period
of
last
year,
which
had
included
model
updates
on
mortgages.
Risk
costs
in
the
first
half
of
2020
included
€3
million
of
collective
provisions
related
to
the
worsened
macro
-economic
indicators.
Retail
Other
Challengers
&
Growth
Markets
Retail
Other
Challengers
&
Growth
markets’
result
before
tax
declined
to
€295
million
from
€438
million
in
the
first
six
months
of
2019,
reflecting
higher
risk
costs
and
operating
expenses,
partly
offset
by
higher
income.
Total
income
rose
by
€33
million,
or
2.0%,
to
€1,720
million
from
€1,687
million
in
the
first
six
months
of
last
year,
driven
by
higher
net
interest
income
consistent
with
higher
volumes,
and
higher
Treasury
-related
revenues.
The
increase
was
partially
offset
by
lower
net
fee
and
commission
income
as
lockdown
measures
due
to
the
Covid-19
pandemic
reduced
the
number
of
daily
banking
transactions.
The
net
production
in
customer
lending
(adjusted
for
currency
effects
and
Treasury)
was
€1.3
billion
in
the
first
half
of
2020,
with
growth
in
all
countries,
except
in
Italy.
The
net
inflow
in
customer
deposits,
also
adjusted
for
currency
impacts
and
Treasury,
was
€8.1
billion,
with
the
largest
increases
in
Poland
and
Spain.
Operating
expenses
increased
by
€59
million,
or
5.6%,
to
€1,120
million
from
€1,061
million
in
the
first
half
of
2019,
of
which
€17
million
was
due
to
higher
regulatory
costs.
The
remaining
increase
was
mainly
due
to
strategic
initiatives
and
the
execution
of
bank-wide
regulatory
programmes,
including
KYC,
partly
offset
by
lower
marketing
expenses.
The
net
addition
to
loan
loss
provisions
increased
by
€117
million
on
the
first
half
of
2019
to
€304
million,
or
annualised
63
basis
points
of
average
customer
lending.
Risk
costs
in
the
first
half
of
2020
included
€104
million
of
collective
provisions
related
to
the
worsened
macro
-economic
indicators.
The
increase
versus
the
first
half
of
last
year
was
mainly
visible
in
Poland,
Italy
and
Spain,
whereas
risk
costs
in
Turkey
declined.
In
the
first
six
months
of
2020,
the
result
before
tax
turned
to
a
loss
of
€204
million
from
€1,018
million
in
the
same
period
last
year.
The
decline
was
predominantly
due
to
elevated
risk
costs
as
well
as
higher
expenses
(including
a
€260
million
goodwill
impairment
as
a
result
of
the
impairment
test
triggered
by
the
Covid-19
pandemic),
partly
offset
by
higher
income.
Total
income
increased
by
€162
million,
or
6.2%,
to
€2,780
million
in
the
first
half
of
2020,
mainly
due
to
higher
income
in
Financial
Markets
and
Treasury
&
Other.
This
was
partly
offset
by
lower
income
in
Daily
Banking
&
Trade
Finance
and
negative
marked
-to-market
adjustments
in
Lending.
The
increase
in
Financial
Markets
was
driven
by
higher
income
in
the
Forex,
Rates
and
Global
Capital
Market
businesses,
together
with
substantial
lower
negative
valuation
adjustments
than
recorded
in
the
first
half
of
2019.
Net
interest
income
increased
by
€33
million,
or
1.8%,
on
the
first
six
months
of
2019,
mainly
driven
by
Treasury
&
Other
and
Financial
Markets.
The
increase
was
partly
offset
by
lower
interest
results
in
Daily
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
10
Banking
&
Trade
Finance,
mainly
due
to
lower
margins
in
Payments
&
Cash
Management.
Net
core
lending
(excluding
currency
impacts,
Treasury
and
the
Lease
run-off
portfolio)
grew
by
€3.8
billion
in
the
first
half
of
2020.
Net
customer
deposits
(excluding
currency
impacts
and
Treasury)
rose
by
€6.4
billion.
Net
fee
and
commission
income
increased
by
€23
million,
or
4.3%,
on
last
year,
predominantly
in
Financial
Markets
mainly
due
to
higher
deal
activity
in
Global
Capital
Markets.
The
increase
was
partly
offset
by
Daily
Banking
&
Trade
Finance
mainly
due
to
lower
fees
in
Trade
&
Commodity
Finance
(mainly
due
to
lower
average
oil
prices).
Investment
and
other
income
rose
to
€354
million
from
€248
million
in
the
first
half
of
2019,
primarily
due
to
higher
revenues
in
Financial
Markets.
This
increase
was
partly
offset
by
Lending,
which
included
negative
marked
-to-market
adjustments
related
to
syndicated
loans
and
loans
at
fair
value
through
Operating
expenses
were
€1,728
million,
or
20.2%
higher
than
in
the
first
six
months
of
2019.
Excluding
regulatory
costs
(€151
million
in
the
first
half
of
2020
versus
€143
million
one
year
ago),
operating
expenses
increased
by
€283
million,
or
21.9%.
The
increase
was
mainly
explained
by
a
€260
million
goodwill
impairment
related
to
a
number
of
acquisitions
in
the
past.
Also
excluding
this
goodwill
impairment,
expenses
increased
by
1.8%,
mainly
due
to
higher
staff
expenses
related
to
annual
salary
increases
and
higher
KYC
costs.
This
increase
was
partly
offset
by
lower
performance
-related
expenses
and
the
impact
of
continued
cost
-savings
measures.
Net
addition
to
loan
loss
provisions
rose
to
€1,256
million,
or
annualised
133
basis
points
of
average
customer
lending,
from
€162
million,
or
18
basis
points,
in
the
first
half
of
2019.
The
increase
was
predominantly
due
to
various
Individual
Stage
3
provisions
and
high
collective
Stage
1
and
Stage
2
provisions
as
a
result
of
the
economic
impact
of
the
Covid-19
pandemic,
including
€366
million
of
collective
provisions
related
to
the
worsened
macro
-economic
indicators,
as
well
as
a
€30
million
collective
Stage
2
provision
for
increased
risk
that
was
observed
in
the
US
reserve
-based
lending
book.
The
Corporate
Line
reported
a
result
before
tax
of
€-34
million
compared
with
€221
million
in
the
first
half
of
2019.
Total
income
fell
to
€123
million
from
€413
million
a
year
ago.
This
decline
was
primarily
due
to
lower
investment
and
other
income,
as
the
first
six
months
om
2019
included
a
€119
million
one-off
gain
from
the
release
of
a
currency
translation
reserve
related
to
the
sale
of
ING’s
stake
in
Kotak
Mahindra
Bank
and
the
recognition
of
a
€79
million
receivable
related
to
the
insolvency
of
a
financial
institution.
Excluding
both
items,
income
decreased
by
€92
million,
primarily
due
to
lower
income
from
foreign
currency
exchange
ratio
hedging.
Operating
expenses
decreased
to
€154
million
from
€192
million
in
the
first
half
of
2019,
mainly
due
to
the
recognition
of
a
value
-added
tax
(VAT)
refund
in
the
first
half
of
2020,
partly
offset
by
higher
shareholders
and
KYC
-related
expenses.
ING
Group
statement
of
financial
position
(‘balance
sheet’)
ING
Group’s
total
balance
sheet
increased
by
€93
billion
to
€981
billion
at
30
June
2020
from
€889
billion
at
Cash
and
balances
with
central
banks
Cash
and
balances
with
central
banks
increased
by
€66
billion
to
€119
billion.
The
increase
was
driven
by
ING’s
participation
in
a
new
series
of
Targeted
Longer-Term
Refinancing
Operations,
TLTRO
III,
initiated
by
the
European
Central
Bank
(visible
in
deposits
from
banks)
and
increased
customer
deposits.
Further
details
on
TLTRO
can
be
found
in
note
Deposits
from
Banks.
Loans
and
advances
to
banks
and
deposits
from
banks
Loans
and
advances
to
banks
decreased
by
€4
billion
to
€31
billion.
Deposits
from
banks
increased
by
€44
billion
to
€79
billion,
mainly
due
to
the
participation
in
TLTRO
III
of
€60
billion
(of
which
€55
billion
in
June
2020),
which
was
partly
offset
by
repayments
and
maturities
of
TLTRO
II
(€-18
billion).
|
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statements
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
11
Financial
assets/liabilities
at
fair
value
through
profit
or
loss
Financial
assets
at
fair
value
through
profit
or
loss
increased
by
€15
billion
to
€111
billion,
after
a
relatively
low
year-end
2019.
The
increase
was
mainly
due
to
€10
billion
of
higher
assets
mandatorily
at
fair
value
through
profit
or
loss
(reverse
repos)
and
€5
billion
higher
trading
assets
(derivatives).
Financial
liabilities
at
fair
value
through
profit
or
loss
increased
by
€13
billion
to
€91
billion,
approximately
mirroring
the
development
on
the
asset
side
of
the
balance
sheet,
with
€8
billion
of
higher
trading
liabilities
(trading
derivatives
and
repos)
and
€5
billion
of
increased
designated
financial
liabilities
at
fair
value
through
profit
or
Financial
assets
at
fair
value
through
other
comprehensive
income
Financial
assets
at
fair
value
through
other
comprehensive
income
(OCI)
increased
by
€5
billion
to
€39
billion,
due
to
€5
billion
more
debt
securities,
which
mainly
reflect
investments
in
government
bonds
(mainly
US
Treasuries)
and
short-term
paper.
In
addition,
the
value
of
the
existing
portfolio
rose
due
to
a
drop
in
yields.
Securities
at
amortised
costs
Securities
at
amortised
cost
increased
by
€5
billion
to
€51
billion,
mainly
due
to
an
increase
of
investments
in
Loans
and
advances
to
customers
Loans
and
advances
to
customers
increased
by
€4
billion
to
€612
billion
from
€608
billion
at
31
December
2019.
This
was
due
to
€6
billion
of
higher
customer
lending
partly
offset
by
€1
billion
of
higher
provisions
for
loan
losses.
When
adjusted
for
€3
billion
of
negative
currency
impacts,
customer
lending
increased
by
€9
billion.
After
also
exclu
ding
€4
billion
increase
of
short-term
lending
in
Treasury
and
a
€1
billion
decline
in
the
WUB
and
Lease
run-off
portfolios,
net
core
lending
increased
by
€5
billion
of
which
€3
billion
was
in
non-
mortgage
lending
and
€2
billion
in
residential
mortgages.
Other
assets
increased
by
€3
billion
while
other
liabilities
were
€2
billion
higher.
Both
movements
were
mainly
due
to
changes
in
financial
transactions
pending
settlement.
Customer
deposits
increased
by
€31
billion
to
€606
billion.
Adjusted
for
currency
impacts
and
Treasury,
net
customer
deposits
grew
by
€30
billion
in
the
first
half
of
2020,
predominantly
due
to
higher
customer
deposits
at
Retail
Banking
reflecting
ING
Bank’s
strength
as
a
deposit
gatherer.
Debt
securities
in
issue
increased
by
€3
billion
to
€121
billion
due
to
€5
billion
of
higher
certificates
of
deposit/
commercial
paper
(CD/CPs),
while
other
debt
securities,
mainly
long-term
debt,
decreased
by
€3
billion.
Subordinated
loans
remained
flat
at
€17
billion,
as
new
issuances
in
February
and
May
were
offset
by
redemptions
in
the
same
months.
Shareholders’
equity
increased
by
€0.2
billion
to
€51.1
billion
from
€51.0
billion
at
31
December
2019.
The
increase
mainly
reflects
the
€0.6
billion
net
result
for
the
first
half
of
2020
and
a
positive
change
in
the
cashflow
hedge
reserve
of
€0.5
billion,
partly
offset
by
a
€0.6
billion
decrease
of
the
currency
translation
reserve
and
€0.3
billion
of
negative
unrealised
revaluations
of
equity
securities
(mainly
due
to
a
decrease
of
the
valuation
of
our
stake
in
Bank
of
Beijing).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
12
Managing
risk
is
at
the
core
of
ING’s
business.
Financial
risks
include
credit
risk,
for
example
when
we
offer
loans,
market
risk
through
our
trading
and
banking
book
positions,
and
liquidity
or
funding
risk
through
financial
management.
Non-financial
risks
are
those
associated
with
IT
and
cybersecurity,
our
daily
operations
(e.g.
fraud
and
money
laundering),
compliance,
adhering
to
socially-acceptable
ethical
norms
and
We
continually
develop
our
risk
management
to
address
political
and
economic
developments,
evolving
regulatory
requirements,
changing
customer
expectations,
emerging
competitors
and
new
technologies,
all
of
which
could
potentially
impact
our
business.
This
risk
management
section
contains
an
update
of
information
relating
to
the
nature
and
the
extent
of
the
risks
arising
from
financial
instruments
as
disclosed
in
the
2019
ING
Group
consolidated
financial
statements
as
included
in
the
2019
Annual
Report
on
Form
20F.
These
disclosures
are
an
integral
part
of
the
ING
Group
condensed
consolidated
interim
financial
statements
and
are
indicated
by
the
symbol
(*).
Chapters,
paragraphs,
graphs
or
tables
within
this
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
condensed
consolidated
interim
financial
statem
ents.
This
risk
management
section
also
includes
additional
disclosures
beyond
those
required
by
IFRS
standards,
such
as
certain
regulatory
disclosures.
Not
all
information
in
this
section
can
be
reconciled
back
to
the
primary
financial
statements
and
corresponding
notes,
as
it
has
been
prepared
using
risk
data
that
differs
to
the
accounting
basis
of
measurement.
Examples
of
such
differences
include
the
exclusion
of
accrued
interest
and
certain
costs
and
fees
from
risk
data,
and
timing
differences
in
exposure
values
(IFRS
9
models
report
expected
credit
loss
on
underlying
exposures)
.
The
Covid-19
pandemic
and
subsequent
lockdown
measures
have
thrown
the
world
economy
in
turmoil.
Even
as
countries
are
reopening,
the
global
economy
is
expected
to
shrink
in
2020
as
domestic
demand
and
supply,
trade,
and
finance
have
been
severely
disrupted.
In
addition,
the
continuing
US-China
trade
tensions
and
prolonged
uncertainty
on
Brexit
have
negatively
affected
the
global
economy
in
the
first
half-year
of
2020.
Covid-19
In
late
-2019,
a
highly-infectious
coronavirus
named
Covid-19
was
first
identified
in
China.
Spreading
quickly
to
other
regions
of
the
world,
Covid-19
was
declared
a
global
pandemic
by
the
World
Health
Organization
on
11
March
2020.
Various
countries
and
local
governmental
authorities
across
the
world
have
introduced
measures
aimed
at
preventing
the
further
spread
of
Covid-19,
such
as
bans
on
public
events
with
over
a
certain
number
of
attendees,
closures
of
places
where
larger
groups
of
people
gather
such
as
schools,
sports
facilities
and
bars
and
restaurants,
lockdowns,
border
controls
and
travel
and
other
restrictions.
Such
measures
have
disrupted
the
normal
flow
of
business
operations
in
those
countries
and
regions,
which
include
countries
and
regions
where
ING
and
its
customers
and
counterparties
operate,
affected
global
supply
chains,
global
manufacturing,
tourism,
consumer
spending
and
asset
prices,
and
resulted
in
volatility
and
uncertainty
across
the
global
economy
and
financial
markets.
In
addition
to
measures
aimed
at
preventing
the
further
spread
of
the
Covid-19
virus,
governments
in
various
countries
have
introduced
measures
aimed
at
mitigating
the
economic
consequences
of
the
outbreak.
For
example,
the
Dutch
government
has
announced
economic
measures
aimed
at
protecting
jobs,
households’
wages
and
companies,
e.g.,
by
way
of
tax
payment
holidays,
guarantee
schemes
and
a
compensation
scheme
for
heavily
affected
sectors
in
the
economy.
These
announced
measures
and
any
additional
measures,
including
any
payment
holidays
with
respect
to
mortgages
or
other
loans,
have
had
and
may
continue
to
have
a
significant
impact
on
ING’s
customers
and
other
counterparties.
Governments,
regulators
and
central
banks
(including
the
ECB),
have
also
announced
that
they
are
taking
or
considering
measures
seeking
to
safeguard
the
stability
of
the
financial
sector,
to
prevent
lending
to
the
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
13
business
sector
from
being
jeopardised
and
to
ensure
the
payment
system
continues
to
function
properly.
The
Basel
III
framework
includes
capital
and
liquidity
buffers
which
are
designed
to
withstand
stressed
situations
like
the
current
one.
In
this
context,
ING
Group’s
Systemic
Risk
Buffer
has
been
lowered
from
3.0%
of
global
risk-weighted
exposures
to
2.5%.
In
addition,
the
ECB
allows
banks
to
operate
temporarily
below
the
level
of
capital
defined
by
the
Pillar
2
Guidance
(P2G)
and
the
capital
conservation
buffer
(CCB).
The
ECB
effectuated
Art
104(a)
CRDV
as
of
the
first
quarter
of
2020,
which
essentially
brings
forward
the
possibility
to
cover
Pilar
2
requirements
with
a
mix
of
own
funds
instead
of
CET1
only.
For
ING
this
means
a
reduction
of
P2R
from
1.75%
to
0.98%.
Furthermore,
several
countries
released
or
reduced
their
countercyclical
buffer
(CCyB).
This
brings
back
ING
Group’s
fully
loaded
CCyB
from
24
bps
in
Q4
2019
to
3
bps
in
Q2
2020,
helping
to
maintain
the
supply
of
credit
and
dampen
the
downswing
of
the
financial
cycle.
The
measures
remain
until
ING
is
monitoring
the
ongo
ing
Covid-19
pandemic
carefully
as
it
evolves
to
understand
the
impact
on
its
people
and
business.
A
central
ING
team
has
been
set
up
to
monitor
the
situation
globally
and
provide
guidance
on
health
and
safety
measures,
travel
advice
and
business
continuity
for
our
company.
As
the
situation
differs
from
country
to
country,
we
are
following
local
government
guidelines
in
our
response
to
the
virus.
As
of
April
2020,
most
of
ING’s
staff
are
working
from
home
for
several
months,
during
which
time
ING
has
not
experienced
any
substantial
operational
disruptions
as
result
of
work
from
home.
In
addition,
since
May
staff
in
various
countries
have
started
rotation
schemes
to
return
to
work
in
the
office
in
a
controlled
manner,
taking
into
account
local
circumstances
and
any
applicable
government
measures
(including
with
respect
to
social
distancing).
This
controlled
office
opening
process
is
expected
to
allow
for
essential
face
-to-
face
meetings.
However,
at
this
time,
it
is
not
certain
when
ING’s
employees
may
be
generally
expected
or
permitted
to
return
to
ING’s
offices.
If
due
to
illness,
technical
limitations
or
other
restrictions
in
connection
with
the
pandemic,
employees
are
unable
to
work
or
are
not
able
to
operate
as
effectively
and
efficiently
as
in
the
office,
this
may
adversely
affect
ING’s
business,
results
and
financial
condition.
In
addition,
a
situation
in
which
most
or
some
ING’s
employees
continue
working
from
home
may
raise
operational
risks,
including
with
respect
to
information
security,
data
protection,
availability
of
key
systems
and
infrastructure
integrity
.
There
is
also
a
risk
that
ING
will
not
be
effective
in
implementing
regulatory
or
strategic
change
programs
in
the
current
environment.
If
any
of
these
risks
were
to
materialize
that
may
adversely
affect
ING’s
business,
results
and
financial
condition
Also
the
potential
economic
implications
for
the
countries
and
sectors
where
ING
is
active,
which
could
have
a
material
adverse
effect
on
ING’s
business
and
operations,
are
being
assessed
and
discussed
in
order
to
identify
possible
mitigating
actions.
Further
details
on
our
credit
risk
and
market
risk
portfolios
are
covered
in
the
next
chapters.
Credit
risk
management
practices
(*)
In
many
countries,
Governments
have
adopted
economic
support
programs
(such
as
tax
advantages,
unemployment
regulations
or
guarantees)
that
we
believe
will
assist
ING
clients
in
potential
financial
difficulty
to
manage
through
these
extraordinary
times.
In
addition,
various
initiatives
have
been
taken
to
grant
payment
holidays,
(guaranteed)
new
money
facilities
etc.
Governments
in
almost
all
Retail
Banking
countries
have
adopted
measures
providing
for
payment
holidays.
As
of
end
of
June,
approximately
189,000
customers
were
granted
payment
holidays.
The
total
exposure
of
loans
for
which
a
payment
holiday
is
granted
amounts
to
€
18.1
billion,
of
which
over
55%
were
for
customers
located
in
the
Netherlands
and
Belgium.
The
payment
holiday
schemes
offered
in
the
various
countries
differ
in
terms
of
scope,
benefit
duration
and
key
conditions.
Generally
these
schemes
offer
a
3
or
6
month
suspension
of
principal
payment,
and
in
some
instances
also
of
interest
payment.
The
payment
holidays
are
applied
to
business
lending
and
for
mortgages
The
modification
of
contractual
terms
of
loans
subject
to
payment
holiday
arrangements
does
not
automatically
result
in
derecognition
of
the
financial
assets.
Where
applicable,
the
carrying
amount
of
the
financial
asset
has
been
recalculated
as
the
present
value
of
the
renegotiated
or
modified
contractual
cash
flows,
discounted
at
the
original
effective
interest
rate
and
a
gain
or
loss
was
recognized
.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
14
The
various
measures
by
governments
and
ING
to
alleviate
the
impact
of
Covid-19
also
impact
the
loan
classification
in
terms
of
forbearance
and
consequently
IFRS
9
staging.
In
light
of
this,
the
EBA
has
provided
guidelines
which
define
eligibility
criteria
for
a
payment
holiday
arrangement
offered
to
a
large
group
of
customers
to
be
classified
as
a
“general
payment
moratorium”.
The
application
of
such
a
general
payment
moratorium
should
not
lead
to
a
forbearance
classification.
Therefore
it
should
not
automatically
trigger
recognition
of
lifetime
ECL
either.
ING
follows
the
EBA
guidelines
and
when
a
payment
holiday
is
provided
to
a
customer
as
part
of
a
“general
payment
moratorium”,
ING
does
not
consider
this
measure
to
classify
as
Portfolio
quality
and
concentration
Lending
to
businesses
is
diversified
over
various
sectors
and
countries.
The
total
gross
carrying
amounts
is
composed
of
approximately
65%
business
lending
and
35%
consumer
lending.
For
a
detailed
breakdown
of
ING’s
credit
risk
portfolio
by
Sector
and
Geographical
area,
refer
to
the
section
“Credit
Risk
portfolio”
reported
in
the
‘Risk
management’
section
of
the
2019
Annual
Report
on
Form
20F.
ING’s
total
credit
outstandings
increased
significantly
compared
to
year
-end
2019
mainly
as
a
result
of
the
TLTRO
III
participation
through
deposits
to
central
banks.
This
is
visible
in
the
next
table
as
investment
grade
with
AAA
rating.
For
the
sectors
which
were
mostly
impacted
by
Covid
-19,
please
refer
to
the
section
“Changes
in
gross
carrying
amounts
and
loan
loss
provision”.
As
described
in
above
section
“business
environment”
governments
in
various
countries
have
introduced
measures
aimed
at
mitigating
the
economic
consequences
of
the
Covid
-19
virus
outbreak,
especially
for
private
individuals
and
small
business.
These
measures
have
a
mitigating
effect
on
the
deterioration
of
the
credit
quality
of
the
portfolio.
Policies
with
respect
to
payment
holidays
are
intended
to
address
short-term
liquidity
difficulties
for
individuals
and
businesses
resulting
from
the
impact
of
Covid-19.
These
payment
holidays
have
led
to
a
reduced
number
of
defaults.
Loan
Loss
Provisioning
(*)
Since
1
January
2018,
ING
has
recognised
loss
allowances
based
on
the
expected
credit
loss
model
(ECL)
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,
certain
financial
guarantees,
and
undrawn
committed
revolving
credit
facilities.
The
table
below
describes
the
portfolio
composition
over
the
different
IFRS
9
stages
and
rating
classes.
The
Stage
1
portfolio
represents
91.9%
(31
December
2019:
94.0%)
of
the
total
gross
carrying
amounts,
mainly
composed
of
investment
grade,
while
Stage
2
makes
up
6.7%
(31
December
2019:
4.7%)
and
Stage
3
makes
up
1.4%
(31
December
2019:
1.3%)
total
gross
carrying
amounts,
respectively.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
15
Gross
Carrying
amount
per
IFRS
9
stage
and
rating
class
(*)
1
Lifetime
ECL
not
credit
impaired
Lifetime
ECL
credit
impaired
Total
Amount
Provisions
Amount
Provisions
Amount
Provisions
Amount
Provisions
125,600
5
273
125,873
5
103,608
5
297
103,905
5
134,992
23
1,177
1
136,168
24
296,019
90
7,825
14
303,844
104
171,411
215
17,849
119
189,260
334
30,548
210
24,388
496
54,936
706
1,421
169
4,676
436
6,097
605
4,055
200
4,055
200
2,238
145
2,238
145
13,476
3,984
13,476
3,984
Total
863,599
717
62,777
1,412
13,476
3,984
939,852
6,112
1
IAS
37
provisions
(EUR
95.4
million)
are
excluded.
Gross
Carrying
amount
per
IFRS
9
stage
and
rating
class
(*)
1
Lifetime
ECL
not
credit
impaired
Lifetime
ECL
credit
impaired
Total
Amount
Provisions
Amount
Provisions
Amount
Provisions
Amount
Provisions
75,144
1
75,144
1
82,992
3
28
83,020
3
131,931
11
273
132,204
11
295,449
55
4,905
6
300,354
61
194,643
209
7,925
54
202,568
263
36,683
202
18,416
367
55,099
569
405
7
4,067
146
4,472
153
3,253
160
3,253
160
2,216
148
2,216
148
10,955
3,275
10,955
3,275
Total
817,247
490
41,082
881
10,955
3,275
869,284
4,646
1
IAS
37
provisions
(EUR
93.3
million)
are
excluded.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
16
Changes
in
gross
carrying
amounts
and
loan
loss
provision
(*)
The
table
below
provides
a
reconciliation
by
stage
of
the
gross
carrying/nominal
amount
and
allowances
for
loans
and
advances
to
banks
and
customers,
including
loan
commitments
and
financial
guarantees.
The
transfers
of
financial
instruments
represents
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
for
the
first
•
Stage
3
gross
carrying
amount
increased
by
€2.5
billion
from
€10.9
billion
as
per
31
December
2019
mainly
as
a
result
of
ING’s
introduction
of
a
new
definition
of
default
which
had
an
impact
of
€1.0
billion
and
due
to
developments
with
respect
to
certain
large
individual
files.
For
further
background
on
implementation
of
new
Definition
of
Default,
please
refer
to
section
1.5
of
the
Condensed
Consolidated
•
Stage
2
gross
carrying
amount
increased
by
€21.6
billion
from
€41.1
billion
as
per
31
December
2019.
This
is
mainly
caused
by
the
significant
lifetime
PD
trigger
(€8.4
billion),
the
Watchlist
trigger
(€4.0
billion),
primarily
in
Wholesale
Banking,
and
to
a
lesser
extent
Forbearance
(€3.3
billion);
•
Transportation
&
Logistics,
Services,
Real
Estate
and
Food,
Beverages
&
Personal
Care
were
the
sectors
particularly
impacted
by
the
Covid-19
pandemic,
with
an
increase
in
Stage
2
amounts
of
€4.7
billion,
€2.1
billion,
€2.0
billion
and
€1.7
billion
respectively.
These
sectors
represent
12%,
9%,
9%
and
8%
of
the
total
Stage
2
gross
carrying
amounts
respectively.
•
The
net
remeasurement
of
loan
loss
provisions
in
Stage
1
and
Stage
2
of
€182
million
and
€354
million
respectively
and
the
transfer
into
lifetime
ECL
of
€522
million
were
significantly
impacted
by
the
worsened
macro
-economic
outlook,
including
management
adjustments
of
€90
million
to
reflect
the
risks
in
payment
holidays
and
the
impact
of
oil
price
decrease
on
the
upstream
Reserve
Based
Lending
Additional
information
on
macro
-economic
scenarios
is
included
in
the
section
“Macro
-economic
scenarios
and
sensitivity
analysis
of
key
sources
of
estimation
uncertainty”.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
17
Changes
in
gross
carrying
amounts
and
loan
loss
provisions
(*)
1,2,3
Lifetime
ECL
not
credit
impaired
(Stage
2)
Lifetime
ECL
credit
impaired
(Stage
3)
Total
amount
Provisions
amount
Provisions
amount
Provisions
amount
Provisions
Opening
balance
as
at
1
January
2020
817,247
490
41,082
881
10,955
3,275
869,284
4,645
Transfer
into
12-month
ECL
(Stage
1)
7,746
14
-7,401
-126
-346
-8
-120
Transfer
into
lifetime
ECL
not
credit
impaired
(Stage
2)
-33,528
-50
33,948
522
-420
-46
426
Transfer
into
lifetime
ECL
credit
impaired
(Stage
3)
-2,136
-20
-2,144
-136
4,280
1,058
900
Net
remeasurement
of
loan
loss
provisions
182
354
261
797
New
financial
assets
originated
or
purchased
95,280
146
95,280
146
Financial
assets
that
have
been
derecognised
-65,966
-43
-4,230
-66
-551
-73
-70,747
-182
Net
drawdowns
and
repayments
44,955
1,522
-9
46,468
Changes
in
models/risk
parameters
–
Increase
in
loan
loss
provisions
230
548
1,192
1,970
-433
-433
-433
-433
Recoveries
of
amounts
previously
written
off
19
19
Foreign
exchange
and
other
movements
-2
-17
-70
-89
Closing
balance
as
at
30
June
2020
863,599
717
62,777
1,412
13,476
3,983
939,852
6,112
1
At
the
end
of
June
2020,
the
Gross
carrying
amounts
included
loans
and
advances
to
central
banks
(€116.9
billion),
loans
and
advances
to
banks
(€30.7
billion),
financial
assets
at
FVOCI
(€37.0
billion),
securities
at
amortised
cost
(€51.1
billion),
loans
and
advances
to
customers
(€618.4
billion)
and
financial
guarantees
(cred
it
replacement)
in
scope
of
IFRS
9
impairment
requirements
(€112.7
billion)
and
excludes
receivables
related
to
securities
in
reverse
repurchase
transaction
(EUR
-13.4
billion),
cash
collateral
in
respect
of
derivatives
(€-9.4
billion),
the
value
adjustment
hedged
items
(€-0.1
billion),
a
receivable
that
is
offset
by
a
liquidity
facility
(€-1.5
billion),
on-demand
bank
balances
(€-2.7
billion)
and
other
differences
amounting
to
€0.1
billion.
2
Stage
3
Lifetime
credit
impaired
includes
€5
million
Purchased
or
Originated
Credit
Impaired.
3
At
the
end
of
June
2020,
the
stock
of
provisions
included
provisions
for
loans
and
advances
to
central
banks
(€5
million),
loans
and
advances
to
banks
(€13
million),
financial
assets
at
FVOCI
(€13
million),
securities
at
amortised
cost
(€21
million),
provisions
for
loans
and
advances
to
customers
(€6,029
million)
and
provisions
for
contingent
liabilities
(credit
replacements)
recorded
under
Provisions
(€30
million).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
18
Changes
in
gross
carrying
amounts
and
loan
loss
provisions
(*)
1,2,3
Lifetime
ECL
not
credit
impaired
(Stage
2)
Lifetime
ECL
credit
impaired
(Stage
3)
Total
amount
Provisions
amount
Provisions
amount
Provisions
amount
Provisions
Opening
balance
as
at
1
January
2019
788,537
501
46,949
925
10,758
3,141
846,244
4,568
Transfer
into
12-month
ECL
(Stage
1)
12,856
30
-12,579
-253
-277
-23
-246
Transfer
into
lifetime
ECL
not
credit
impaired
(Stage
2)
-21,577
-73
22,382
474
-805
-81
320
Transfer
into
lifetime
ECL
credit
impaired
(Stage
3)
-2,210
-6
-1,753
-135
3,964
1,113
972
Net
remeasurement
of
loan
loss
provisions
-77
36
283
242
New
financial
assets
originated
or
purchased
180,605
205
180,605
205
Financial
assets
that
have
been
derecognised
-126,082
-103
-9,108
-162
-1,659
-137
-136,849
-402
Net
drawdowns
and
repayments
-14,880
-4,807
1
-19,686
Changes
in
models/risk
parameters
15
2
-8
9
Increase
in
loan
loss
provisions
-9
-39
1,147
1,099
-1
-1
-2
-2
-1,027
-1,028
-1,030
-1,031
Recoveries
of
amounts
previously
written
off
55
55
Foreign
exchange
and
other
movements
-1
-3
-41
-45
Closing
balance
as
at
31
December
2019
817,247
490
41,082
881
10,955
3,275
869,284
4,646
1
At
the
end
of
December
2019,
the
Gross
carrying
amounts
included
loans
and
advances
to
central
banks
(€51.2
billion),
loans
and
advances
to
banks
(€35.1
billion),
financial
assets
at
FVOCI
(€32.2
billion),
securities
at
amortised
cost
(€46.1
billion),
loans
and
advances
to
customers
(€612.6
billion)
and
financial
guarantees
(cre
dit
replacement)
in
scope
of
IFRS
9
impairment
requirements
(€115.7
billion)
and
excludes
receivables
related
to
securities
in
reverse
repurchase
transaction
(€-9.9
billion),
cash
collateral
in
respect
of
derivatives
(€-10.2
billion),
a
receivable
that
is
offset
by
a
liquidity
facili
ty
(€-1.3
billion),
de-netting
of
cash
pool
balances
(€-1.8
billion)
and
other
differences
amounting
to
€-0.3
billion.
2
Stage
3
Lifetime
credit
impaired
includes
€1
million
Purchased
or
Originated
Credit
Impaired.
3
At
the
end
of
December
2019,
the
stock
of
provisions
included
provisions
for
loans
and
advances
to
central
banks
(€1
million),
loans
and
advances
to
banks
(€9
million),
financial
assets
at
FVOCI
(€10
million),
securities
at
amortised
cost
(€10
million),
provisions
for
loans
and
advan
ces
to
customers
(€4,590
million)
and
provisions
for
contingent
liabilities
(credit
replacements)
recorded
under
Provisions
(€25
million).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
19
Macro-economic
scenarios
and
sensitivity
analysis
of
key
sources
of
estimation
uncertainty
(*)
Our
methodology
in
relation
to
the
adoption
and
generation
of
macroeconomic
scenarios
is
described
in
the
Risk
Management
section
of
the
Annual
Report
on
Form
20F
2019.
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
macro
-economic
scenarios
are
applicable
to
the
whole
ING
portfolio
in
the
scope
of
IFRS9
ECL’s
.
Macro
-economic
scenarios
(*)
The
provisions
are
based
on
the
end
of
June
macro
-economic
consensus
forecasts,
with
the
main
inputs
for
four
of
our
main
portfolios
in
the
upside
scenario,
baseline
scenario
and
downside
scenario
presented
in
the
sensitivity
table
below.
The
Macro
-economic
(ME)
forecast
resulted
increased
calculated
model
based
collective
provisions.
The
main
driver
for
the
increase
is
the
significant
GDP
growth
deterioration
which
is
forecasted
as
result
of
the
Covid-19
crisis,
which
mainly
impacted
risk
costs
in
Wholesale
Banking.
For
Retail
portfolios,
unemployment
rate
and
house
prices
are
the
most
important
drivers
and
those
did
show
more
moderate
deterioration.
Hence
the
impact
of
worsened
macroeconomic
forecasts
on
the
Retail
portfolios
is
The
macro
-economic
scenarios
reflects
how
the
Covid-19
pandemic,
the
(reversal
of)
lockdown
measures
and
government
and
central
bank
support
measures
potentially
can
impact
the
economic
outlook.
In
the
consensus
forecast,
a
rebound
in
activity
is
projected
to
start
in
the
second
half
of
2020
despite
ongoing
containment
measures.
Nevertheless,
the
consensus
does
not
expect
the
major
economies
to
return
to
pre-
crisis
levels
until
after
2021.
Making
predictions
is
difficult
as
there
are
still
many
uncertainties
about
the
development
of
the
Covid-19
pandemic.
Management
adjustments
(*)
In
times
of
volatility
and
uncertainty
where
the
portfolio
quality
and
economic
environment
is
rapidly
changing,
models
alone
may
not
be
able
to
accurately
predict
losses.
In
these
cases
management
adjustments
can
be
applied
to
appropriately
reflect
ECL.
Adjustments
can
also
be
applied
where
the
impact
of
the
updated
macroeconomic
scenarios
is
over
-
or
under-estimated
by
the
IFRS
9
models.
As
mentioned
above,
per
the
guidance
from
EBA,
Covid-19
related
payment
holidays
should
not
be
regarded
as
an
automatic
forbearance
trigger,
and
hence,
should
not
automatically
trigger
recognition
of
lifetime
ECL.
Looking
forward,
it
is
expected
that
the
phasing
out
of
the
Covid-19
related
payment
holiday
schemes
and
other
support
measures
in
the
second
half
of
2020
could
potentially
lead
to
more
business
insolvencies
and
unemployment.
This
could
lead
to
more
clients
that
have
currently
taken
payment
holidays,
getting
into
financial
difficulties
and
to
higher
levels
of
defaults.
To
the
extent
ING
believes
that
this
elevated
risk
is
not
yet
covered
in
the
IFRS9
models,
a
management
adjustment
has
been
recognised.
This
management
adjustment
has
been
recognised
for
SME
portfolios
as
these
portfolios
are
considered
to
be
most
at
risk
and
have
the
highest
percentage
of
customers
requesting
payment
holidays
compared
to
other
portfolios.
ING
has
recognised
a
management
adjustment
of
€45
million
in
Netherlands
and
€15
million
in
Belgium
as
they
are
the
largest
SME
portfolios
and
not
significantly
impacted
by
ME
forecasts
updates.
In
addition,
as
oil
price
remains
volatile,
as
well
as
exposed
to
the
impacts
of
the
Covid-19
crisis
and
subject
to
political
decisions,
ING
reco
gnised
a
management
adjustment
for
the
upstream
oil
book
of
€30
million.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
20
Analysis
on
sensitivity
(*)
Based
on
the
above,
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
is
presented
below.
The
countries
included
in
the
analysis
are
the
Group’s
most
significant
geographic
regions,
in
terms
of
both
gross
contribution
to
reportable
ECL,
and
sensitivity
of
ECL
to
forward
-looking
macroeconomics.
Accordingly,
the
Group
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.
The
Group
also
observes
that,
in
general,
the
Wholesale
business
is
more
sensitive
to
the
impact
of
forward-
looking
macroeconomic
scenarios.
While
the
table
does
give
a
high-level
indication
of
the
sensitivity
of
the
outputs
to
the
different
scenarios,
it
does
not
provide
insight
on
the
interdependencies
and
correlations
between
different
macroeconomic
1,2,3
2020
2021
2022
Un-weighted
Probability-
weighing
4
Netherlands
-6.0
5.2
3.9
476
20%
559
Unemployment
4.9
4.4
3.8
HPI
3.7
14.7
5.3
-6.3
4.0
2.3
536
60%
Unemployment
5.3
5.4
5.4
HPI
-0.2
0.8
3.2
-6.9
0.6
0.1
708
20%
Unemployment
6.2
7.5
8.3
HPI
-4.4
-14.4
0.3
1,2,3
2020
2021
2022
Un-weighted
Probability-
weighing
4
Germany
-5.8
7.1
2.6
518
20%
575
Unemployment
3.7
2.4
1.6
HPI
6.0
7.0
8.5
-6.3
5.3
1.9
558
60%
Unemployment
4.0
3.6
3.2
HPI
4.4
3.2
5.1
-6.9
1.7
-0.4
681
20%
Unemployment
4.7
5.1
5.2
HPI
0.7
-1.3
1.3
Belgium
-7.6
6.2
2.8
450
20%
510
Unemployment
8.9
7.7
7.2
HPI
2.8
5.0
4.4
-7.9
4.9
2.3
491
60%
Unemployment
9.2
7.7
7.7
HPI
1.9
3.9
3.5
-8.5
2.5
1.0
628
20%
Unemployment
10.3
10.2
10.3
HPI
0.7
2.2
2.6
-5.6
5.3
4.9
205
20%
335
Unemployment
9.8
5.2
2.7
HPI
3.1
6.8
8.8
-5.7
4.2
3.0
285
60%
Unemployment
10.2
6.6
4.7
HPI
2.3
2.8
3.0
-6.6
0.5
0.7
612
20%
Unemployment
10.9
9.1
8.1
HPI
1.3
-1.9
-3.3
1
Real
GDP,
in
%
year
-on-year
change
2
Unemployment
in
%
of
total
labour
force
3
House
Price
Index
(HPI)
in
%
year-on-year
4
Sensitivity
does
not
include
the
effect
of
manual
adjustments,
which
are
not
material
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
21
The
setting
of
PD
threshold
bandings
requires
management
judgement,
and
is
a
key
source
of
estimation
uncertainty.
To
demonstrate
the
sensitivity
of
the
ECL
to
these
PD
thresholds
bandings,
analysis
was
run
on
all
collectively
-assessed
assets,
which
assumed
all
assets
(Stage
1
and
2)
were
below
the
threshold,
and
apportioned
a
12
month
ECL.
On
ING
Group
level,
the
total
ECL
collective
-assessment
for
performing
assets
is
€2,129
million
(2019:
€1,291
million).
On
the
same
asset
base,
analysis
was
run
which
assumed
all
performing
assets
were
above
the
threshold,
and
apportioned
a
lifet
ime
ECL.
This
gave
rise
to
a
hypothetical
collective-
assessment
ECLs
€1,636
million
(2019:
€866
million)
and
€3,409
million
(2019:
€2,665
million)
respectively.
Please
note
that
in
this
analysis
all
other
ECL
risk
parameters
(except
for
the
stage)
were
kep
t
equal.
It
should
be
noted
that
the
lifetime
PD
thresholds
are
not
the
only
drivers
of
stage
allocation.
An
asset
can
change
stages
as
a
result
of
being
in
arrears,
on
a
Watch
List
or
being
forborne,
among
other
triggers.
Market
risk
in
trading
books(*)
As
part
of
the
risk
monitoring
framework,
ING
actively
monitors
the
daily
changes
of
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,
IR
risk
per
currency,
and
Credit
Spread
risk
per
country
and
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
trading
positions
(*)
2019
127
116
-37
–21
27
20
-26
–15
-24
–10
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
22
Most
important
interest
rate
and
credit
spread
sensitivities
(*)
2019
Euro
-1,280
Euro
–740
-745
–325
-154
–105
-92
–68
-66
–31
Germany
153
360
109
Germany
163
-58
France
117
Indonesia
42
73
40
72
1
Basis
Point
Value
(BPV)
measures
the
impact
on
value
of
a
1
basis
point
increase
in
interest
rates.
The
figures
include
commodity
risk
in
2
Credit
Spread
Sensitivity
(CS01)
measures
the
impact
on
value
of
a
1
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
(excluding
sovereign
exposures)
(*)
Corporate
Financial
Institutions
Corporate
Financial
Institutions
1
-3
1
–1
21
-64
–15
–63
56
-50
143
32
207
-24
273
1
57
-4
148
9
20
-2
51
1
3
26
Total
365
-147
626
–21
1
Credit
Spread
Sensitivity
(CS01)
measures
the
impact
on
value
of
a
1
basis
point
increase
in
credit
spreads.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
23
Other
risks
and
uncertainties
Because
we
are
a
financial
services
company
conducting
business
on
a
global
basis,
our
revenues
and
earnings
are
affected
by
the
volatility
and
strength
of
the
economic,
business,
liquidity,
funding
and
capital
markets
environments
specific
to
the
geographic
regions
in
which
we
conduct
business.
The
ongoing
turbulence
and
volatility
of
such
factors
have
adversely
affected,
and
may
continue
to
adversely
affect,
the
profitability,
solvency
and
liquidity
of
our
business.
Factors
such
as
interest
rates,
securities
prices,
credit
ratings,
credit
spreads,
liquidity
spreads,
exchange
rates,
effects
of
the
Covid-19
pandemic,
consequences
of
the
United
Kingdom’s
withdrawal
from
the
European
Union,
changes
to
‘benchmark’
indices,
consumer
spending,
changes
in
client
behaviour,
business
investment,
real
estate
values
and
private
equity
valuations,
government
spending,
inflation
or
deflation,
the
volatility
and
strength
of
the
capital
markets,
political
events
and
trends,
non-compliance
with
(or
changes)
in
laws
and
re
gulations,
climate
change,
terrorism,
as
well
as
inability
to
protect
our
intellectual
property
and
infringement
claims
by
third
parties,
to
achieve
our
strategy
or
to
retain
key
personnel
may
all
impact
the
business
and
economic
environment
and,
ultimately,
our
solvency,
liquidity
and
the
amount
and
profitability
of
business
we
conduct
in
a
specific
geographic
region.
Additional
risks
of
which
the
ING
is
not
presently
aware,
or
that
are
currently
viewed
as
less
material
than
the
risks
described
above,
could
also
affect
the
business
operations
of
ING
and
have
a
material
adverse
effect
on
ING’s
business
activities,
financial
condition,
results
of
operations
and
prospects.
For
more
information
on
risks,
please
refer
to
“Other
information
and
appendices
-
Risk
Factors”
in
the
Annual
Report
on
Form
20-F
of
ING
Group
for
the
year
ended
December
31,
2019."
In
the
first
half
year
of
2020,
as
part
of
this
process,
the
Risk
Committee
and
the
Supervisory
Board
spent
considerable
time
discussing,
among
other
things,
the
progress
in
the
bank-wide
Know
Your
Customer
The
KYC
Enhancement
Programme
encompasses
all
client
segments
in
all
ING
business
units.
The
programme
consists
of
three
parts:
(a)
look-back
analysis
on
past
deficiencies
in
post
-transaction
monitoring.
The
look-
back
analysis
consists
of
screening
of
transactions
executed
in
the
past.
In
case
unusual
transactions
are
identified,
ING
is
committed
to
following
the
applicable
reporting
process;
(b)
enhancement
of
customer
due
diligence
files
with
the
aim
to
document
sufficiently
the
knowledge
the
bank
has
about
its
clients
in
the
line
with
past
and
new
requirements;
(c)
structural
solutions
that
should
support
getting
sustainably
better
in
addressing
money
laundering
risks
in
our
portfolio
and
complying
with
laws
and
regulations.
The
structural
solutions
comprise
five
pillars:
●
Development
and
global
roll
-out
of
KYC
risk
appetite
statements,
KYC
risk
assessments
on
clients,
capability
structure
and
maturity
assessments;
●
Development
and
global
roll
-out
of
a
bank-wide
KYC
digital
service
platform;
●
Translation
of
risk
assessment
outcomes
into
scenarios
and
alert
definitions
that
can
be
applied
in
●
Set
up
central
KYC
organisation
that
defines
standards
and
drives
global
execution
and
improvements;
and
●
Develop
and
rollout
KYC
communication
and
awareness
initiatives
and
set
up
a
behavioural
risk
department
that
performs
risk
assessments.
In
the
first
half-year
2020,
ING
continued
to
make
progress
in
executing
the
Global
KYC
Enhancement
Program.
Several
workstreams
have
delivered
on
their
commitments
and
further
improvement
activities
are
now
embedded
in
continuous
improvement
cycles
in
regular
operations.
Key
achievements
in
the
past
months
include
among
others:
●
the
adjusted
Global
KYC
organisation
started
on
1st
February
with
the
establishment
of
three
pillars
-
Customer
Due
Diligence,
Transac
tion
Monitoring
and
Screening
–
to
enhance
end-to-end
steering
and
ownership;
●
the
adoption
of
ING’s
2020
Global
KYC
RAS,
which
includes
a
number
of
inclusions
set
for
high
risk
client
relationships;
and
●
the
partnership
with
the
Association
of
Certified
Ant
i-Money
Laundering
Specialists
(ACAMS)
to
rollout
their
internationally
recognised
and
certified
KYC
training
for
ING
employees
.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
24
Interbank
offered
rates,
such
as
EURIBOR
and
LIBOR,
are
widely
used
as
benchmarks
to
set
interest
rates
across
a
broad
range
of
financial
products
and
contracts.
In
line
with
recommendations
from
the
Financial
Stability
Board,
a
fundamental
review
and
reform
of
the
major
interest
rates
benchmarks
has
been
undertaken.
For
the
Eurozone,
this
led
to
a
reform
of
the
EURIBOR
benchmark
rate
and
development
of
€STR
as
the
recommended
new
nearly
risk-free-rate
(RFR)
to
replace
EONIA.
For
LIBOR
benchmarks,
the
reform
will
include
replacing
interest
rate
benchmarks
with
alternative,
nearly
risk-free
rates.
This
process
is
at
different
stages,
and
is
progressing
at
different
speeds,
across
several
major
currencies.
ING
Bank
has
exposure
to
IBORs
through
various
products
in
all
of
its
business
lines
(wholesale
banking,
retail
banking,
business
banking)
and
exposure
relating
to
the
associated
funding
and
hedging
activities
including
debt
issuance,
the
interest
rate
risk
position,
holdings
of
investment
securities,
etc.
ING
has
established
a
global
IBOR
Transition
Program
to
manage
the
transition.
The
program
performs
the
assessment
and
actions
necessary
to
manage
a
smooth
transition
to
RFRs
within
all
internal
processes
and
systems,
including
pricing,
risk
management,
legal
documentation,
hedge
arrangements,
as
well
as
any
impact
on
customers.
The
Covid-19
virus
outbreak
has
impacted
the
progress
in
a
number
of
interim
industry
developments
intended
to
aid
transition.
However,
the
key
industry
working
groups
are
active
and
the
FCA
has
reiterated
that
the
working
assumption
that
LIBOR
cannot
be
assumed
to
be
available
beyond
the
end
of
2021
remains.
ING
is
proactively
reaching
out
to
industry
participants,
counterparties
and
clients
to
create
awareness
and
offer
support
on
the
upcoming
transition.
At
ING,
progress
has
been
made
in
H1
2020
on
the
IBOR
execution
activities
in
all
Business
Lines
of
the
bank.
The
program
has
a
robust
governance
in
place,
with
progress
being
tracked
by
business
line
Steering
committees
reporting
into
the
central
IBOR
Steering
committee.
ING
is
well
on
track
to
meet
the
external
milestones
of
2020
and
finalizing
detailed
roadmaps
and
resource
planning
for
implementation
in
2021.
ING
is
monitor
ing
market
developments
closely,
as
there
remain
some
uncertainties
in
the
industry.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
25
Condensed
consolidated
statement
of
financial
position
30
June
2020
31
December
2019
30
June
2020
31
December
2019
Assets
Liabilities
Cash
and
balances
with
central
banks
118,971
53,202
78,649
34,826
Loans
and
advances
to
banks
30,664
35,136
605,633
574,355
Financial
assets
at
fair
value
through
profit
or
loss
111,110
96,187
Financial
liabilities
at
fair
value
through
profit
or
loss
90,641
77,942
Financial
assets
at
fair
value
through
other
comprehensive
income
38,993
34,468
387
554
Securities
at
amortised
cost
51,085
46,108
499
322
Loans
and
advances
to
customers
612,387
608,029
Provisions
566
688
Investments
in
associates
and
joint
ventures
1,775
1,790
14,879
12,829
3,086
3,172
121,138
118,528
1,586
1,916
16,697
16,588
515
251
929,091
836,631
1,548
1,242
9,543
7,018
Equity
Share
capital
and
share
premium
17,128
17,117
3,616
4,013
30,406
29,866
Shareholders’
equity
(parent)
51,149
50,996
Non-controlling
interests
1,022
893
52,171
51,889
981,262
888,520
Total
liabilities
and
equity
981,262
888,520
References
relate
to
the
accompanying
notes.
These
are
an
integral
part
of
the
Condensed
consolidated
Interim
financial
statements.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
26
Condensed
consolidated
statement
of
profit
or
loss
for
the
periods
ended
30
June
2020
2019
2020
2019
Interest
income
using
effective
interest
rate
method
10,935
12,799
Addition
to
loan
loss
provisions
1,998
416
1,026
1,610
1
2,923
2,811
11,962
14,410
2,703
2,427
7,623
5,654
Interest
expense
using
effective
interest
rate
method
–4,160
–5,880
–925
–1,633
1
Result
before
tax
from
continuing
operations
1,065
2,493
–5,085
–7,513
Taxation
438
740
13
6,877
6,896
Net
result
from
continuing
operations
626
1,754
Net
fee
and
commission
income
14
1,506
1,386
Net
result
(before
non-controlling
interests)
626
1,754
Valuation
results
and
net
trading
income
15
–4
–489
Net
result
attributable
to
Non-controlling
interests
36
47
40
58
Net
result
attributable
to
shareholders
of
the
parent
591
1,707
2
269
296
8,688
8,148
1
Prior
period
amounts
in
other
interest
income
and
other
interest
expense
have
been
updated
to
improve
consistency
and
comparability.
2
Other
income
includes
Result
from
associates
and
joint
ventures,
Result
on
disposal
of
group
companies,
Net
result
on
derecognition
of
financial
assets
at
amortised
cost
and
Other.
References
relate
to
the
accompanying
notes.
These
are
an
integral
part
of
the
Condensed
consolidated
Interim
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
27
Condensed
consolidated
statement
of
profit
or
loss
–
continued
2020
2019
Earnings
per
ordinary
share
17
Basic
earnings
per
ordinary
share
0.15
0.44
Diluted
earnings
per
ordinary
share
0.15
0.44
Earnings
per
ordinary
share
from
continuing
operations
17
Basic
earnings
per
ordinary
share
from
continuing
operations
0.15
0.44
Diluted
earnings
per
ordinary
share
from
continuing
operations
0.15
0.44
Dividend
per
ordinary
share
–
0.24
References
relate
to
the
accompanying
notes.
These
are
an
integral
part
of
the
Condensed
consolidated
Interim
financial
statements.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
28
Condensed
consolidated
statement
of
comprehensive
income
2020
2019
Net
result
(before
non-controlling
interests)
626
1,754
Other
comprehensive
income
Items
that
will
not
be
reclassified
to
the
statement
of
profit
or
loss:
Realised
and
unrealised
revaluations
property
in
own
use
11
36
Remeasurement
of
the
net
defined
benefit
asset/liability
84
–23
Net
change
in
fair
value
of
equity
instruments
at
FVOCI
–311
201
Net
change
in
fair
value
of
own
credit
risk
of
financial
liabilities
at
FVPL
11
–91
Items
that
may
subsequently
be
reclassified
to
the
statement
of
profit
or
loss:
Net
change
in
fair
value
of
debt
instruments
at
FVOCI
–81
1
Realised
gains/losses
on
debt
instruments
at
FVOCI
reclassified
to
the
statement
of
profit
–27
–36
Changes
in
cash
flow
hedge
reserve
644
861
Exchange
rate
differences
–691
–116
Share
of
other
comprehensive
income
of
associates
and
joint
ventures
and
other
income
2
–2
Total
comprehensive
income
268
2,585
Comprehensive
income
attributable
to:
Non-controlling
interests
134
86
Shareholders
of
the
parent
135
2,500
268
2,585
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
29
Condensed
consolidated
statement
of
changes
in
equity
Share
share
premium
Other
reserves
Retained
earnings
Share-
holders'
equity
(parent)
Non-
controlling
interests
Total
equity
Balance
as
at
31
December
2019
17,117
4,013
29,866
50,996
893
51,889
Net
change
in
fair
value
of
equity
instruments
at
fair
value
through
other
comprehensive
income
–310
–2
–312
–
–311
Net
change
in
fair
value
of
debt
instruments
at
fair
value
through
other
comprehensive
income
–76
–76
–5
–81
Realised
gains/losses
on
debt
instruments
at
fair
value
through
other
comprehensive
income
reclassified
to
the
statement
of
profit
or
loss
–27
–27
–1
–27
Changes
in
cash
flow
hedge
reserve
501
501
144
644
Realised
and
unrealised
revaluations
property
in
own
use
9
2
11
–
11
Remeasurement
of
the
net
defined
benefit
asset/liability
84
84
–
84
Exchange
rate
differences
and
other
–650
–650
–41
–691
Share
of
other
comprehensive
income
of
associates
and
joint
ventures
and
other
income
54
–52
2
–
2
Change
in
fair
value
of
own
credit
risk
of
financial
liabilities
at
fair
value
through
profit
or
loss
11
11
–
11
Total
amount
recognised
directly
in
other
comprehensive
income
net
of
tax
–
–404
–52
–456
98
–358
–
–
591
591
36
626
Total
comprehensive
income
net
of
tax
–
–404
539
135
134
268
Dividends
–3
–3
Changes
in
treasury
shares
–
6
–
6
–
6
Employee
stock
option
and
share
plans
11
–
1
12
–
12
Changes
in
the
composition
of
the
group
and
other
changes
–1
–1
Balance
as
at
30
June
2020
17,128
3,616
30,406
51,149
1,022
52,171
Changes
in
individual
Reserve
components
are
presented
in
Note
12
‘Equity’.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
30
Condensed
consolidated
statement
of
changes
in
equity
-
continued
Share
share
premium
Other
reserves
Retained
earnings
Share-
holders'
equity
(parent)
Non-
controlling
interests
Total
equity
Balance
as
at
31
December
2018
17,088
3,621
28,339
49,049
803
49,851
Net
change
in
fair
value
of
equity
instruments
at
fair
value
through
other
comprehensive
income
–123
322
199
2
201
Net
change
in
fair
value
of
debt
instruments
at
fair
value
through
other
comprehensive
income
–
–
–
1
Realised
gains/losses
on
debt
instruments
at
fair
value
through
other
comprehensive
income
reclassified
to
the
statement
of
profit
or
loss
–34
–34
–1
–36
Changes
in
cash
flow
hedge
reserve
830
830
31
861
Realised
and
unrealised
revaluations
property
in
own
use
29
7
36
–0
36
Remeasurement
of
the
net
defined
benefit
asset/liability
–23
–23
–23
Exchange
rate
differences
and
other
–121
–121
6
–116
Share
of
other
comprehensive
income
of
associates
and
joint
ventures
and
other
income
127
–129
–2
–
–2
Change
in
fair
value
of
own
credit
risk
of
financial
liabilities
at
fair
value
through
profit
or
loss
–91
–91
–91
Total
amount
recognised
directly
in
other
comprehensive
income
net
of
tax
593
200
793
38
832
–
1,707
1,707
47
1,754
Total
comprehensive
income
net
of
tax
593
1,906
2,500
86
2,585
Dividends
–1,714
–1,714
–27
–1,741
Changes
in
treasury
shares
3
3
3
Employee
stock
option
and
share
plans
27
–3
25
–
25
Balance
as
at
30
June
2019
17,116
4,218
28,528
49,862
862
50,723
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
31
Condensed
consolidated
statement
of
cash
flows
2020
2019
2020
2019
Cash
flows
from
operating
activities
Disposals
and
redemptions:
–
Associates
and
joint
ventures
12
6
1,065
2,493
-
Financial
assets
at
fair
value
through
other
comprehensive
income
8,523
8,982
–
Depreciation
and
amortisation
402
388
-
Securities
at
amortised
cost
11,547
7,441
–
Addition
to
loan
loss
provisions
1,998
416
4
71
–
Other
non-cash
items
in
Result
before
tax
1,285
53
–
401
–1,149
–1,583
8
1
–
Net
change
in
Loans
and
advances
to/from
banks,
not
available/payable
on
demand
51,912
–3,434
Net
cash
flow
from/(used
in)
investing
activities
–9,627
2,346
–
Net
change
in
Trading
assets
and
Trading
liabilities
3,208
–1,707
–
Loans
and
advances
to
customers
–9,865
–17,670
Cash
flows
from
financing
activities
34,416
15,297
Proceeds
from
debt
securities
48,565
54,835
–5,849
9,502
Repayments
of
debt
securities
–46,335
–57,088
Net
cash
flow
from/(used
in)
operating
activities
77,422
3,754
Proceeds
from
issuance
of
subordinated
loans
2,165
1,089
Repayments
of
subordinated
loans
–2,608
–933
Cash
flows
from
investing
activities
Repayments
of
principal
portion
of
lease
liabilities
–132
–123
Investments
and
advances:
-
Acquisition
of
subsidiaries,
net
of
cash
acquired
–
–17
Purchase/sale
of
treasury
shares
6
8
-
Associates
and
joint
ventures
–10
–60
–3
–1,714
-
Financial
assets
at
fair
value
through
other
comprehensive
income
–13,095
–7,765
–
-
Securities
at
amortised
cost
–16,306
–6,395
Net
cash
flow
from/(used
in)
financing
activities
1,658
–3,926
–144
–135
–165
–184
69,453
2,174
Cash
and
cash
equivalents
at
beginning
of
year
54,031
47,529
Effect
of
exchange
rate
changes
on
cash
and
cash
equivalents
–192
–53
Cash
and
cash
equivalents
at
end
of
year
123,292
49,650
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
32
Condensed
consolidated
statement
of
cash
flows
-
continued
Cash
and
cash
equivalents
30
June
2020
30
June
2019
Treasury
bills
and
other
eligible
bills
170
94
Deposits
from
banks/Loans
and
advances
to
banks
4,151
–2,615
Cash
and
balances
with
central
banks
118,971
52,171
Cash
and
cash
equivalents
at
end
of
year
123,292
49,650
The
increase
in
Cash
and
Cash
Equivalents
by
EUR
69
billion
in
the
6
month
period
up
to
30
June
2020
to
EUR
123
billion
were
mainly
driven
by
ING’s
participation
of
EUR
55
billion
in
the
targeted
longer
-term
refinancing
operations
(TLTRO
III)
in
June,
which
were
mainly
placed
on
deposit
with
the
ECB
as
at
30
June
(reported
as
Cash
and
balances
with
Central
Banks)
and
by
increased
customer
deposits.
The
table
below
presents
the
Interest
and
dividend
received
and
paid.
2020
2019
12,287
14,784
–5,504
–7,575
6,784
7,208
1
23
67
–3
–1,714
1.
Includes
dividends
received
as
recognized
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.
Dividend
paid
and
received
from
trading
positions
have
been
included.
Interest
received,
interest
paid
and
dividends
received
are
included
in
operating
activities
in
the
Condensed
consolidated
statement
of
cash
flows.
Dividend
paid
is
included
in
financing
activities
in
the
Condensed
consolidated
statement
of
cash
flows.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
33
Notes
to
the
Condensed
consolidated
interim
financial
statements
1
Basis
of
preparation
and
accounting
policies
1.1
ING
Groep
N.V.
is
a
company
domiciled
in
Amsterdam,
the
Netherlands.
Commercial
Register
of
Amsterdam,
number
33231073.
These
Condensed
consolidated
interim
financial
statements,
as
at
and
for
the
six
months
period
ended
30
June
2020,
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.
1.2
Basis
of
prepa
ration
of
the
Condensed
consolidated
interim
financial
statements
The
ING
Group
Condensed
consolidated
interim
financial
statements
have
been
prepared
in
accordance
with
International
Accounting
Standard
34
‘
Interim
Financial
Reporting’.
The
accounting
policies
used
to
prepare
the
Condensed
consolidated
interim
financial
statements
are
consistent
with
International
Financial
Reporting
Standards
as
issued
by
the
International
Accounting
Standards
Board
(IFRS
-IASB)
and
are
consistent
with
those
set
out
in
the
notes
to
the
2019
Consolidated
financial
statements
as
included
in
the
Annual
Report
on
Form
20-F
of
ING
Group
except
for
the
adoption
of
a
number
of
amendments
effective
in
2020
as
set
out
in
Note
1.3
‘Changes
to
accounting
policies’.
The
Condensed
consolidated
interim
financial
statements
should
be
read
in
conjunction
with
ING
Group’s
2019
Consolidated
financial
statements
as
included
in
the
Form
20-F.
The
ING
Group
Condensed
consolidated
interim
financial
statements
have
been
prepared
on
a
going
concern
basis.
The
Condensed
consolidated
interim
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
Presentation
of
Risk
management
disclosures
Certain
disclosures
of
the
nature
and
extent
of
risks
related
to
financial
instruments
as
disclosed
in
the
2019
ING
Group
Consolidated
financial
statements
and
included
in
the
2019
ING
Group
Annual
Report
on
Form
20-
F
are
updated
due
to
the
Covid-19
developments
in
the
first
six
months
of
2020.
Although
these
disclosures
are
included
in
the
‘Risk
management’
section,
they
are
an
integral
part
of
the
ING
Group
Condensed
consolidated
interim
financial
statements.
The
disclosures
are
indicated
by
the
symbol
(*).
1.2.2
Reconciliation
between
IFRS
-EU
and
IFRS
-IASB
ING
Group
also
publishes
its
Consolidated
financial
statements
and
Condensed
consolidated
interim
financial
statements
based
on
IFRS
-EU.
IFRS
-EU
refers
to
International
Financial
Reporting
Standards
(‘IFRS’)
as
adopted
by
the
European
Union
(EU),
including
the
decisions
ING
Group
made
with
regard
to
the
options
available
under
IFRS
as
adopted
by
the
EU.
IFRS
-EU
differs
from
IFRS
-IASB
in
respect
of
certain
paragraphs
in
IAS
39
‘Financial
Instruments:
Recognition
and
Measurement’
regarding
hedge
accounting
for
portfolio
hedges
of
intere
st
rate
risk.
Under
IFRS
9,
the
IAS
39
hedge
accounting
principles
can
be
applied.
Under
IFRS
-EU,
ING
Group
applies
fair
value
hedge
accounting
for
portfolio
hedges
of
interest
rate
risk
(fair
value
macro
hedges)
in
accordance
with
the
EU
carve
-out
versio
n
of
IAS
39.
Under
the
EU
IAS
39
carve
-out,
hedge
accounting
may
be
applied,
in
respect
of
fair
value
macro
hedges,
to
core
deposits
and
hedge
ineffectiveness
is
only
recognised
when
the
revised
estimate
of
the
amount
of
cash
flows
in
scheduled
time
buckets
falls
below
the
original
designated
amount
of
that
bucket
and
is
not
recognised
when
the
revised
amount
of
cash
flows
in
scheduled
time
buckets
is
more
than
the
original
designated
amount.
Under
IFRS-
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Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
34
IASB,
hedge
accounting
for
fair
value
macro
hedges
cannot
be
applied
to
core
deposits
and
ineffectiveness
arises
whenever
the
revised
estimate
of
the
amount
of
cash
flows
in
scheduled
time
buckets
is
either
more
or
less
than
the
original
designated
amount
of
that
bucket.
This
information
is
prepared
by
rever
sing
the
hedge
accounting
impacts
that
are
applied
under
the
EU
‘carve-
out’
version
of
IAS
39.
Financial
information
under
IFRS
-IASB
accordingly
does
not
take
account
of
the
possibility
that
had
ING
Group
applied
IFRS
-IASB
as
its
primary
accounting
framework
it
might
have
applied
alternative
hedge
strategies
where
those
alternative
hedge
strategies
could
have
qualified
for
IFRS
-IASB
compliant
hedge
accounting.
These
decisions
could
have
resulted
in
different
shareholders’
equity
and
net
result
amounts
compared
to
those
indicated
in
this
Condensed
consolidated
interim
financial
statements
on
Both
IFRS
-EU
and
IFRS
-IASB
differ
in
several
areas
from
accounting
principles
generally
accepted
in
the
United
States
of
America
(US
GAAP)
A
reconciliation
between
IFRS
-EU
and
IFRS
-IASB
is
included
below.
Reconciliation
net
result
under
IFRS-EU
and
IFRS
-IASB
2020
2019
In
accordance
with
IFRS
-EU
969
2,556
Adjustment
of
the
EU
IAS
39
carve-out
–493
–1,093
Tax
effect
of
the
adjustment
115
243
Effect
of
adjustment
after
tax
–379
–850
In
accordance
with
IFRS
-IASB
(attributable
to
the
shareholders
of
the
parent)
591
1,707
Non-controlling
interests
36
47
In
accordance
with
IFRS
-IASB
Total
net
result
626
1,754
Reconciliation
shareholders’
equity
under
IFRS
-EU
and
IFRS
-IASB
30
June
2020
31
December
2019
In
accordance
with
IFRS
-EU
54,305
53,769
Adjustment
of
the
EU
IAS
39
carve-out
–4,157
–3,658
Tax
effect
of
the
adjustment
1,001
885
Effect
of
adjustment
after
tax
–3,156
–2,773
51,149
50,996
Non-controlling
interests
1,022
893
In
accordance
with
IFRS
-IASB
Total
Equity
52,171
51,889
In
the
first
six
months
of
2020
interest
rates
decreased,
resulting
in
a
positive
hedge
accounting
impact
related
to
the
EU
IAS
39
carve-out.
The
difference
in
net
result
is
fully
reflected
in
the
segment
Wholesale
Banking.
1.3
Changes
to
accounting
policies
ING
Group
has
consistently
applied
its
accounting
policies
to
all
periods
presented
in
these
Condensed
consolidated
interim
financial
statements,
except
for
amendments
that
became
effective
in
2020.
1.3.1
Changes
in
IFRS
effective
in
2020
A
number
of
amended
standards
became
applicable
for
the
current
reporting
period
with
no
significant
impact
on
ING
Group’s
accounting
policies,
ING
Group’s
results
or
financial
position.
The
list
of
amendments
effective
in
the
current
period
and
applicable
for
ING
Group:
•
Amendments
to
IAS
39
‘
Financial
Instruments:
Recognition
and
Measurements’
and
IFRS
7
‘
Financial
Instruments:
Disclosures’:
‘IBOR
Reform
and
its
Effects
on
Financial
Reporting
–
Phase
1’
(issued
on
26
September
2019
and
early
adopted
by
ING
in
2019);
•
Amendments
to
IFRS
3
‘Business
Combinations’:
Definition
of
a
Business
(issued
on
22
October
2018);
•
Amendments
to
IAS
1
and
IAS
8:
‘Definition
of
Materi
al’
(issued
on
31
October
2018);
and
•
Amendments
to
References
to
the
Conceptual
Framework
in
IFRS
Standards
(issued
on
29
March
2018).
In
May
2020
the
IASB
also
issued
amendments
to
IFRS
16
‘Leases’:
‘Covid
-19-Related
Rent
Concessions’
to
provide
lessees
with
an
exemption
from
assessing
whether
a
Covid-19-related
rent
concession
is
a
lease
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statements
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
35
modification.
The
amendments
are
effective
for
annual
reporting
periods
beginning
on
or
after
1
June
2020,
with
earlier
application
permitted
(including
financial
statements
not
yet
authorised
for
issue
at
28
May
2020)
and
are
also
available
for
interim
reports.
The
amendments
will
not
have
material
impact
on
ING
Group’s
accounting
policies,
ING
Group’s
results
or
financial
position.
ING
Group
has
not
early
adopted
any
standard,
interpretation
or
amendment
(including
the
above
mentioned
IFRS
16
amendments)
which
has
been
issued,
but
is
not
yet
effective.
For
further
information,
reference
is
made
to
Note
1
‘Basis
of
preparation
and
accounting
policies,
1.4.2
Upcoming
changes
in
IFRS
after
2019’
in
the
2019
ING
Group
Consolidated
financial
statements
as
included
in
1.4
Significant
judgments
and
critical
accounting
estimates
and
assumptions
The
preparation
of
the
Condensed
consolidated
interim
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
period.
The
actual
outcome
may
differ
from
these
estimates.
The
process
of
setting
assumptions
is
subject
to
internal
control
procedures
and
approvals.
As
discussed
in
Note
1.5
‘
Significant
judgements
and
critical
accounting
estimates
and
assumptions’
of
the
2019
ING
Group
Consolidated
financial
statements
as
included
in
the
Form
20-F,
ING
Group
has
identified
the
following
3
areas
that
require
management
to
make
significant
judgements
and
use
critical
accounting
estimates
and
assumptions
based
on
the
information
and
financial
data
that
may
change
in
future
periods:
•
The
determination
of
the
fair
values
of
financial
assets
and
liabilities;
•
Loan
loss
provisions;
and
•
Provisions.
These
areas
continue
to
be
relevant
for
these
Condensed
consolidated
interim
financial
statements,
and,
in
particular,
an
increased
level
of
estimation
uncertainty
is
observed
for
Loan
loss
provisions
due
to
Covid-19
outbreak
and
determination
of
the
fair
values
of
financial
assets
and
liabilities
due
to
market
developments
in
the
first
six
months
of
2020.
In
addition
to
the
disclosures
in
the
2019
Annual
Report
on
Form
20-F,
the
increased
uncertainty
for
Loan
loss
provisions
from
Covid-19
manifested
itself
in
the
following
key
areas:
the
uncertainty
around
macroeconomic
forecasts
and
the
period
and
duration
of
the
economic
recovery
path;
uncertainty
around
determining
when
there
has
been
a
significant
increase
in
credit
risk,
especially
in
the
light
of
government
measures
such
as
payment
holidays
where
traditional
risk
drivers
in
ECL
models
based
on
payment
behaviour
can
be
ineffective
as
these
clients
are
not
required
to
make
regular
payments
and
limited
(if
any)
information
is
available.
For
further
discussion
and
details
of
the
significant
judgements
and
critical
accounting
estimates
and
assumptions
relating
to
the
Loan
loss
provisions,
reference
is
made
to
paragraph
‘Loan
loss
provisioning’
in
the
‘Risk
management’
section
of
the
interim
report.
In
light
of
uncertainties
due
to
Covid-19,
the
assessment
of
impairment
of
non-financial
assets
became
a
new
area
of
critical
accounting
estimates
in
the
first
six
months
of
2020.
For
ING
it
mainly
related
to
the
assessment
for
potential
impairment
of
goodwill
and
an
investment
in
associate
(TMB),
which
involves
estimation
of
their
recoverable
amounts.
Recoverable
amounts
are
sensitive
to
the
assumptions
used
and
their
estimation
becomes
particularly
judgmental
in
light
of
uncertainties
due
to
Covid-19.
The
projected
cash
flows,
discount
rates
and
growth
rates
are
particularly
relevant
and
the
sensitivity
of
the
recoverable
amounts
to
these
assumptions
is
described
in
Note
7
‘Intangible
assets’
and
Note
6
‘Investments
in
associates
ING
has
historically
aligned
the
Definition
of
Default
for
regulatory
purposes
with
the
definition
of
‘credit-
impaired’
financial
assets
under
IFRS
9
(Stage
3).
To
comply
with
new
regulatory
technical
standards
(RTS)
and
EBA
guidelines
ING
updated
its
Definition
of
Default
in
the
first
quarter
of
2020.
Consequently,
ING
updated
this
definition
also
for
IFRS
9
purposes.
From
an
accounting
perspective,
this
represents
a
change
in
accounting
estimate.
This
change
had
no
material
impact
on
the
Expected
Credit
Losses
but
impacted
the
migration
of
assets
mainly
between
Stage
2
and
Stage
3
resulting
in
an
increase
in
Stage
3
assets.
For
more
details
on
this
impact,
reference
is
made
to
paragraph
‘Loan
loss
provisioning’
in
the
‘Risk
management’
section
of
the
interim
report.
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statements
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
36
Notes
to
the
Condensed
consolidated
statement
of
financial
position
2
Financial
assets
at
fair
value
through
profit
or
loss
Financial
assets
at
fair
value
through
profit
or
loss
30
June
2020
31
December
2019
53,781
49,254
2,488
2,257
Designated
at
fair
value
through
profit
or
loss
3,700
3,076
Mandatorily
measured
at
fair
value
through
profit
or
loss
51,142
41,600
111,110
96,187
Trading
assets
include
assets
that
are
classified
under
IFRS
as
Trading,
but
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).
Part
of
the
trading
assets
are
sold
subject
to
repurchase
agreements,
securities
lending
and
similar
agreements
comparable
to
collateralised
lending,
and
continue
to
be
recognised
in
the
consolidated
statement
of
financial
position.
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
since
IFRS
does
not
always
allow
netting
of
these
positions
in
the
stateme
nt
of
financial
position.
As
at
30
June
2020,
Trading
Assets
include
Loans
and
receivables
of
EUR
14,344
million
(31
December
2019:
EUR
11,969
million)
with
regard
to
reverse
repurchase
transactions.
Reference
is
made
to
Note
9
‘Financial
liabilities
at
fair
value
through
profit
or
loss’
for
information
on
trading
liabilities.
Financial
assets
‘Mandatorily
measured
at
fair
value
through
profit
or
loss’
mainly
include
reverse
repurchase
agreements.
The
related
repurchase
financial
liabilities
are
classified
as
financial
liabilities
‘Designated
at
fair
value
through
profit
or
loss’.
As
at
30
June
2020,
Financial
assets
mandatorily
measured
at
fair
value
through
profit
or
loss
include
Loans
and
receivables
of
EUR
49,048
million
(31
December
2019:
EUR
38,985
million)
with
regard
to
reverse
repurchase
transactions.
3
Financial
assets
at
fair
value
through
other
comprehensive
income
Financial
assets
at
fair
value
through
other
comprehensive
income
by
type
30
June
2020
31
December
2019
1,998
2,306
1
35,650
30,483
1
1,345
1,680
38,993
34,468
1
Debt
securities
include
an
amount
of
EUR
-10
million
(31
December
2019:
EUR
-7
million)
and
the
Loans
and
advances
includes
EUR
-3
million
(31
December
2019:
EUR
-3
million)
of
Loan
loss
provisions.
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statements
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
37
Exposure
to
equity
securities
Equity
securities
designated
as
at
fair
value
through
other
comprehensive
income
Carrying
value
Dividend
income
Carrying
value
Dividend
income
30
June
2020
30
June
2020
31
December
2019
31
December
2019
Investment
in
Bank
of
Beijing
1,704
–
2,001
93
294
2
305
18
1,998
2
2,306
111
For
strategic
equity
securities,
ING
decided
to
apply
the
option
to
irrevocably
designate
these
investments
at
fair
value
through
other
comprehensive
income,
instead
of
the
IFRS
9
default
measurement
of
fair
value
As
at
30
June
ING
holds
approximately
13%
(31
December
2019:
13%)
of
the
shares
of
Bank
of
Beijing,
a
bank
listed
on
the
stock
exchange
of
Shanghai.
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
as
per
30
June
2020
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
1
Total
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
Opening
balance
as
at
1
January
2,306
3,228
32,163
27,995
34,468
31,223
Additions
9
11
13,087
16,259
13,095
16,270
Amortisation
32
–12
32
–12
Transfers
and
reclassifications
1
3
–
–0
1
3
Changes
in
unrealised
revaluations
2
–289
139
611
258
322
397
Impairments
–0
–2
–0
–2
–3
1
–3
1
Disposals
and
redemptions
–1
–1,091
–8,524
–12,298
–8,526
–13,389
Exchange
rate
differences
–27
15
–369
–40
–396
–25
Changes
in
the
composition
of
the
group
and
other
changes
–0
–
–0
2
–0
3
1,998
2,306
36,995
32,163
38,993
34,468
1
Fair
value
through
other
comprehensive
income
debt
instruments
includes
both
debt
securities
and
loans
and
advances.
2
Changes
in
unrealised
revaluations
include
changes
on
hedged
items
which
are
recognised
in
the
statement
of
profit
or
loss.
In
the
first
six
months
of
2020,
changes
in
unrealised
revaluations
of
equity
securities
decreased
mainly
related
to
negative
revaluation
of
the
stake
in
Bank
of
Bejing
following
a
sharp
decline
in
share
price
(EUR
-
In
the
first
quarter
of
2019,
ING
sold
its
last
tranche
of
shares
in
India’s
Kotak
Mahindra
Bank
(Kotak)
for
EUR
880
million.
The
transaction,
for
a
stake
of
3.07%,
concluded
the
divestment
process
and
was
the
main
driver
for
the
‘disposal’
line
in
2019.
Reference
is
made
to
Note
4
‘Securities
at
amortised
cost’
for
details
on
ING
Group’s
total
exposure
to
debt
securities.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
38
4
Securities
at
amortised
cost
Securities
at
amortised
cost
fully
consist
of
Debt
securities.
ING
Group’s
total
exposure
to
debt
securities
is
included
in
the
following
lines
in
the
statement
of
financial
position:
Exposure
to
debt
securities
30
June
2020
31
December
2019
Debt
securities
at
fair
value
through
other
comprehensive
income
35,650
30,483
Debt
securities
at
amortised
cost
51,085
46,108
Debt
securities
at
fair
value
through
other
comprehensive
income
and
amortised
cost
86,735
76,592
6,852
6,256
Debt
securities
at
fair
value
through
profit
or
loss
3,643
3,067
Total
debt
securities
at
fair
value
through
profit
or
loss
10,496
9,323
97,230
85,914
ING
Group’s
total
exposure
to
debt
securities
(excluding
debt
securities
held
in
the
trading
portfolio)
of
EUR
90,378
million
(31
December
2019:
EUR
79,659
million)
is
specified
as
follows:
Debt
securities
by
type
of
exposure
Total
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
148
408
24,679
20,300
28,427
25,627
53,254
46,334
Sub
-sovereign,
Supranationals
1,413
505
7,862
6,606
13,006
10,689
22,281
17,801
1,986
1,734
6,669
6,960
8,655
8,693
325
476
137
143
462
619
Financial
institutions'
bonds
1,353
1,440
377
332
1,933
1,536
3,663
3,308
730
714
431
1,043
934
1,163
2,095
2,920
3,643
3,067
35,660
30,491
51,106
46,118
90,409
79,676
–10
–7
–21
–10
–31
–17
3,643
3,067
35,650
30,483
51,085
46,108
90,378
79,659
Approximately
88%
(31
December
2019:
90%)
of
the
exposure
in
the
ABS
portfolio
is
externally
rated
AAA,
AA
or
A.
There
are
no
borrowed
debt
securities
recognised
in
the
statement
of
financial
position.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
39
5
Loans
and
advances
to
customers
Loans
and
advances
to
customers
by
type
30
June
2020
31
December
2019
Loans
to,
or
guaranteed
by,
public
authorities
41,925
42,190
Loans
secured
by
mortgages
348,769
348,526
Loans
guaranteed
by
credit
institutions
4,397
3,775
28,814
28,250
194,511
189,878
618,416
612,619
–6,029
–4,590
612,387
608,029
As
at
30
June
2020,
Loans
and
advances
to
customers
–
corporate
loans
include
receivables
with
regard
to
securities
which
have
been
acquired
in
reverse
repurchase
transactions
amounting
to
EUR
3,012
million
(31
December
2019:
EUR
180
million).
For
details
on
credit
quality
and
loan
loss
provisioning,
refer
to
‘Risk
management
–
Credit
risk’
paragraph
Loans
and
advances
to
customers
by
subordination
30
June
2020
31
December
2019
Non-subordinated
612,309
607,908
Subordinated
78
121
612,387
608,029
No
individual
loan
or
advance
has
terms
and
conditions
that
significantly
affect
the
amount,
timing
or
certainty
of
the
consolidated
cash
flows
of
the
Group.
6
Investments
in
associates
and
joint
ventures
Investments
in
associates
and
joint
ventures
Interest
invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMB
Public
Company
Limited
23
673
1,492
54,563
48,832
526
378
Other
investments
in
associates
and
joint
ventures
283
1,775
Investments
in
associates
and
joint
ventures
Interest
invest-
ments
Balance
sheet
value
Total
assets
Total
liabilities
Total
income
Total
expenses
TMB
Public
Company
Limited
23
1,109
1,509
55,804
49,974
1,145
891
Other
investments
in
associates
and
joint
ventures
281
1,790
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.
TMB
Bank
Public
Company
Limited
ING
Group
has
a
23.03%
investment
in
TMB
Bank
Public
Company
Limited
(hereafter:
TMB),
a
bank
listed
on
the
Stock
Exchange
of
Thailand.
TMB
is
providing
products
and
services
to
Wholesale,
Small
and
Medium
Enterprise
(SME),
and
Retail
customers.
In
December
2019
TMB
merged
with
Thanachart
Bank
and
became
Thailand’s
sixth
largest
bank.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
40
TMB
is
accounted
for
as
an
investment
in
associate
based
on
the
size
of
ING
shareholding
and
representation
on
the
Board.
IFRS
requires
to
test
its
investment
in
TMB
for
impairment
when
there
is
an
indication
that
In
the
first
half
year
of
2020,
the
fair
value
of
ING’s
investment
in
TMB
significantly
declined
below
the
purchase
cost.
This
indicator
triggered
ING
to
perform
an
impairment
test
on
the
recoverability
of
the
investment
of
TMB.
The
impairment
test
performed
led
to
no
impairment
at
30
June
2020,
as
the
recoverable
amount,
as
determined
by
a
Value
in
Use
calculation,
was
higher
than
the
carrying
amount.
Investments
in
associates
and
joint
ventures
Fair
value
TMB
Public
Company
Limited
1,606
673
1,492
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’).
Fair
value
less
costs
of
disposal
is
based
on
observable
share
price.
The
ViU
calculation
uses
discounted
cash
flow
projections
based
on
management’s
best
estimates.
VIU
is
derived
using
a
Dividend
Discount
Model
(DDM)
where
distributable
equity,
i.e.
future
earnings
available
to
ordinary
shareholders,
is
used
as
a
proxy
for
future
cash
flows.
The
valuation
looks
at
expected
cash
flows
into
perpetuity
resulting
in
two
main
components
to
the
ViU
calculation:
i)
the
estimation
of
future
earnings
over
a
5
year
forecast
period;
and
ii)
the
terminal
value
being
the
extrapolation
of
earnings
into
perpetuity
applying
a
long
term
growth
rate.
The
earnings
that
are
used
for
extrapolation
represent
the
stable
long
term
financial
results
and
position
of
TMB,
i.e.
a
steady
state.
The
terminal
value
comprises
the
ma
jority
of
the
total
VIU.
Key
assumptions
used
in
the
VIU
calculation
The
value
in
use
is
determined
using
a
valuation
model
which
is
subject
to
multiple
management
assumptions.
The
key
assumptions,
i.e.
those
to
which
the
overall
result
is
most
sensitive
to,
are
the
following:
●
Terminal
growth
rate:
3%
for
periods
after
2024,
consistent
with
current
long
term
forecasts
of
GDP
●
Discount
rate
(cost
of
equity):
9%,
based
on
the
capital
asset
pricing
model
(CAPM)
calculated
for
TMB,
using
current
market
data
.
The
model
was
tested
for
reasonably
possible
changes
to
key
assumptions
in
the
model.
This
reflects
the
sensitivity
of
the
VIU
to
each
key
assumption
on
its
own
and
it
is
possible
that
more
than
one
favourable
and/or
unfavourable
change
may
occur
at
the
same
time.
A
reduction
in
all
of
the
forecasted
annual
cash
flows,
including
terminal
value,
of
7.1%
would
reduce
the
recoverable
amount
to
the
carrying
amount.
A
-
122bps
change
in
the
terminal
growth
rate
or
a
46bps
change
in
the
discount
rate
would
cause
the
VIU
to
equal
the
carrying
amount.
Changes
in
Investments
in
associates
and
joint
ventures
30
June
2020
31
December
2019
Opening
balance
as
at
1
January
1,790
1,203
Additions
10
507
Transfers
to
and
from
Investments/Other
assets
and
liabilities
–0
4
Revaluations
2
–18
33
82
–11
–58
Disposals
–1
–10
Impairments
1
–34
Exchange
rate
differences
–55
113
Other
6
1,775
1,790
Share
of
results
from
associates
and
joint
ventures
of
EUR
33
million
(2019:
EUR
82
million)
as
included
in
the
table
above,
is
mainly
attributable
to
results
of
TMB
of
EUR
39
million
(2019:
EUR
77
million).
Share
of
results
from
associates
and
joint
ventures
as
presented
in
the
statement
of
profit
or
loss
includes,
besides
above
mentioned
share
of
results,
also
impairments.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
41
Changes
in
intangible
assets
Goodwill
Software
Other
Total
2020
31
December
2019
2020
31
December
2019
2020
31
December
2019
2020
31
December
2019
907
918
958
868
52
53
1,916
1,839
Additions
17
50
94
–
50
111
115
285
115
285
Amortisation
–120
–235
–1
–2
–121
–237
Impairments
1
–310
–3
–61
–15
–0
–328
–61
Exchange
rate
differences
–35
–28
–5
–
–0
–0
–40
–28
Disposals
–8
–1
–0
–8
–1
Changes
in
the
composition
of
the
group
2
8
–
1
2
9
562
907
989
958
35
52
1,586
1,916
872
907
2,738
2,608
60
61
3,670
3,575
–1,737
–1,641
–8
–7
–1,745
–1,648
–310
–11
–9
–17
–2
–338
–11
562
907
989
958
35
52
1,586
1,916
1
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
Goodwill
Goodwill
30
June
2020
31
December
2019
8.46%
0.00%
30
30
9.54%
0.00%
50
8.43%
0.00%
349
349
1
13.59%
3.61%
182
209
1
9.38%
0.85%
268
562
907
1
Goodwill
related
to
Growth
Countries
is
allocated
across
two
groups
of
CGUs,
EUR
182
million
to
Retail
Growth
Markets
and
EUR
0
million
to
Wholesale
Banking
(31
December
2019:
EUR
209
million
to
Retail
Growth
Markets
and
EUR
61
million
to
Wholesale
Covid-19
has
resulted
in
adverse
changes
in
the
market
and
economic
environment.
Due
to
the
impact
of
the
significant
deterioration
in
the
economic
environment
on
the
cash
flow
outlook
of
our
businesses,
we
completed
a
goodwill
impairment
review
across
ING
Group
in
the
second
quarter
of
2020.
This
review
resulted
in
the
recognition
of
goodwill
impairments
on
the
CGU
Retail
Belgium
of
EUR
50
million
(of
which
EUR
43
million
Retail
Belgium
segment
and
EUR
8
million
Corporate
Line)
and
on
the
CGU
Wholesale
Banking
of
EUR
260
million
(fully
reported
in
the
Wholesale
Banking
segment).
For
both
CGUs
the
impairment
resulted
from
the
negative
developments
in
the
macro-economic
outlook
in
the
context
of
the
Covid-19
pandemic.
In
addition,
the
applicable
discount
rate
is
also
affected
by
the
deteriorated
economic
and
risk
environment.
The
discount
rate
used
to
estimate
the
value
in
use
of
the
CGU
Belgium
as
at
30
June
2020
was
9.54
%
(31
December
2019:
6.94
%).
The
discount
rate
used
to
estimate
the
value
in
use
of
CGU
Wholesale
Banking,
which
is
based
on
the
weighted
average
of
the
discount
rates
of
various
local
businesses
as
Wholesale
Banking
is
a
global
business
line,
was
at
30
June
9.38%
(31
December
2019:
7.29%).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
42
For
each
of
the
other
group
of
CGU’s
the
recoverable
amount
exceeds
the
carrying
value
of
the
CGUs
for
2020
and
2019
and
therefore
no
impairment
is
required.
Several
methodologies
are
applied
to
arrive
at
the
best
estimate
of
the
recoverable
amount.
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
the
expected
impact
of
Covid-19.
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
capital
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’s
judgement.
The
long
term
growth
rate
for
EU-countries
is
based
on
long-term
risk-free
rate
by
reference
to
the
yield
of
a
composite
index
consisting
of
Euro
generic
government
bonds,
with
a
maturity
of
30
years.
For
other
countries,
the
growth
rate
includes
long
term
inflation
rate
obtained
from
market
sources.
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
rate
s
(cost
of
equity),
and
long
term
growth
The
recoverable
amounts
of
the
unimpaired
CGU’s
are
sensitive
to
the
above
key
assumptions.
A
decrease
in
the
available
cash
flow
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
the
above
key
assumptions
holding
the
other
key
assumptions
constant,
goodwill
of
the
remaining
CGUs
will
continue
to
be
recoverable
and
no
impairment
will
occur.
Other
intangible
assets
with
indefinite
life
The
carrying
value
of
CGU
Wholesale
Banking
includes
as
at
30
June
2020
EUR
11
million
(31
December
2019:
EUR
20
million)
of
intangibles
with
indefinite
life
which
relates
to
acquired
trade
names
in
the
payments
and
cash
management
business.
The
asset
is
deemed
to
have
indefinite
life
because
there
is
no
foreseeable
limit
to
the
cash
flows
generated
by
those
intangible
assets.
In
the
first
half
year
of
2020
an
impairment
of
an
indefinite
useful
life
asset
of
EUR
10
million
was
recognised,
related
to
a
trade
name
no
longer
in
use.
Deposits
from
banks
include
non-subordinated
debt
from
banks,
except
for
amounts
in
the
form
of
debt
securities.
Deposits
from
banks
by
type
30
June
2020
31
December
2019
19
180
78,631
34,646
78,649
34,826
Deposits
from
banks
includes
ING’s
participation
in
the
targeted
longer
-term
refinancing
operations
(TLTRO)
of
EUR
59.5
billion
(31
December
2019:
EUR
17.7
billion).
ING
participated
in
a
new
series
of
Targeted
Longer-
Term
Refinancing
Operations
(TLTRO
III)
for
EUR
4.5
billion
in
March
2020,
EUR
55.0
billion
in
June
2020
and
repaid
EUR
17.7
billion
on
previous
TLTRO.
The
TLTRO
funding
is
granted
for
a
period
of
three
years
with
early
repayment
option
after
1
year.
The
interest
rate
on
the
TLTRO
depends
on
the
lending
volumes
granted
to
corporates
(excluding
financial
institutions)
and
households
(excluding
mortgages).
Under
the
conditions
of
the
program,
banks
that
show
growth
in
lending
volumes
equal
to
or
above
0%
between
1
March
2020
and
31
March
2021
the
interest
rate
applied
on
all
TLTRO
III
operations
outstanding
over
the
period
between
24
June
2020
and
23
June
2021
will
be
50
basis
points
below
the
average
interest
rate
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
43
on
the
deposit
facility
prevailing
over
the
same
period,
and
in
any
case
not
higher
than
-1%.
In
subsequent
years
the
interest
will
be
in
a
corridor
between
the
Deposit
Facility
and
Main
Refinancing
Operations
rates,
depending
to
what
extent
ING
meets
the
lending
growth
conditions
of
the
TLTRO
III
program.
The
amount
of
interest
to
be
recognised
on
the
TLTRO
depends
on
a
reasonable
expectation
of
whether
the
conditions
will
be
met
over
the
life
of
the
loan.
Interest
on
TLTRO
is
presented
as
part
of
net
interest
margin.
9
Financial
liabilities
at
fair
value
through
profit
or
loss
Financial
liabilities
at
fair
value
through
profit
or
loss
30
June
2020
31
December
2019
35,745
28,042
2,435
2,215
Designated
at
fair
value
through
profit
or
loss
52,461
47,684
90,641
77,942
As
at
30
June
2020,
trading
liabilities
include
funds
on
deposit
of
EUR
8,559
million
(31
December
2019:
EUR
4,556
million)
with
regard
to
repurchase
transactions.
As
at
30
June
2020,
financial
liabilities
designated
at
fair
value
through
profit
or
loss
include
funds
entrusted
of
EUR
43,180
million
(31
December
2019:
EUR
38,492
million)
with
regard
to
repurchase
transactions.
10
Debt
securities
in
issue
Debt
securities
in
issue
relate
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
do
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.
The
maturities
of
the
debt
securities
are
as
follows:
Debt
securities
in
issue
–
maturities
30
June
2020
31
December
2019
Fixed
rate
debt
securities
32,575
26,871
More
than
1
year
but
less
than
2
years
13,311
10,358
More
than
2
years
but
less
than
3
years
3,232
9,527
More
than
3
years
but
less
than
4
years
6,608
6,321
More
than
4
years
but
less
than
5
years
3,466
2,836
28,705
29,007
Total
fixed
rate
debt
securities
87,896
84,920
Floating
rate
debt
securities
26,090
24,938
More
than
1
year
but
less
than
2
years
3,380
3,126
More
than
2
years
but
less
than
3
years
1,469
3,041
More
than
3
years
but
less
than
4
years
1,458
1,541
More
than
4
years
but
less
than
5
years
90
144
755
816
Total
floating
rate
debt
securities
33,242
33,608
121,138
118,528
In
the
first
six
months
of
2020,
Debt
securities
in
issue
increased
by
EUR
2.6
billion.
This
increase
is
mainly
attributable
to
issuances
of
commercial
paper
of
EUR
4.7
billion,
certificates
of
deposits
of
EUR
0.6
billion
and
an
increase
in
other
debt
securities
of
EUR
1.2
billion
partly
offset
by
matured
savings
certificates
of
EUR
0.2
billion,
the
redemption
of
RMBS
(residential
mortgage
backed
securities)
of
EUR
0.5
billion
and
matured
long
term
maturity
bonds
of
EUR
3.2
billion.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
44
Subordinated
loans
by
group
companies
30
June
2020
31
December
2019
13,691
13,069
3,007
3,519
16,697
16,588
Subordinated
loans
issued
by
ING
Groep
N.V.
include
bonds
issued
to
raise
Tier
1
and
Tier
2
(CRD
IV
eligible)
capital
for
ING
Bank
N.V.
Under
IFRS
these
bonds
are
classified
as
liabilities
and
for
regulatory
purposes,
they
are
considered
capital.
Subordinated
loans
issued
by
ING
Group
companies
comprise,
for
the
most
part,
subordinated
loans
which
are
subordinated
to
all
current
and
future
liabilities
of
ING
Bank
N.V.
Changes
in
subordinated
loans
30
June
2020
31
December
2019
Opening
balance
as
at
1
January
16,588
13,724
2,165
3,429
Repayments
–2,608
–933
Exchange
rate
differences
and
other
553
367
16,697
16,588
In
2020
ING
Groep
N.V.
issued
in
February
USD
750
million
4.875%
Perpetual
Additional
Tier
1
Contingent
Convertible
Capital
Securities
and
in
May
EUR
1.5
billion
2.125%
Subordinated
Tier
2
Notes.
In
February
ING
Bank
N.V.
bought
back
USD
1
billion
5.800%
Tier
2
securities
via
a
tender
and
in
April
ING
Groep
N.V.
redeemed
USD
1
billion
6.000%
Perpetual
Additional
Tier
1
Contingent
Convertible
Capital
Securities
and
USD
700
million
6.125%
Perpetual
Debt
Securities.
Equity
30
June
2020
31
December
2019
Share
capital
and
share
premium
39
39
17,089
17,078
17,128
17,117
-
Revaluation
reserve:
Equity
securities
at
FVOCI
1,270
1,580
-
Revaluation
reserve:
Debt
instruments
at
FVOCI
219
322
-
Revaluation
reserve:
Cash
flow
hedge
1,709
1,208
-
Revaluation
reserve:
Credit
liability
–103
–114
-
Revaluation
reserve:
Property
in
own
use
262
253
-
Net
defined
benefit
asset/liability
remeasurement
reserve
–252
–336
-
Currency
translation
reserve
–2,729
–2,079
-
Share
of
associates
and
joint
ventures
and
other
reserves
3,243
3,189
–3
–10
3,616
4,013
30,406
29,866
Shareholders’
equity
(parent)
51,149
50,996
Non-controlling
interests
1,022
893
52,171
51,889
In
March
2020,
ING
Group
announced
that
it
will
suspend
any
payment
of
dividends
until
1
October
2020,
following
an
industry
wide
recommendation
of
the
ECB.
The
ECB
subsequently
updated
their
recommendation
at
the
end
of
July,
extending
the
timeframe
for
suspension
of
dividend
payments
until
1
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
45
January
2021.
Any
dividend
payment
by
ING
will
therefore
be
delayed
until
after
1
January
2021.
Final
dividend
2019
paid
out
in
the
first
half
year
of
2020
is
therefore
nil
(2019:
EUR
1,714
million).
Changes
in
revaluation
reserve
FVOCI
FVOCI
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
1,580
1,914
322
398
1,208
604
-114
8
253
204
11
-116
Unrealised
revaluations
-312
137
-76
-43
501
604
11
58
Realised
gains/losses
-27
-33
Realised
revaluations
2
-472
–
–
-6
-2
-9
1,270
1,580
219
322
1,709
1,208
-103
-114
262
253
Equity
securities
at
FVOCI
In
2020,
the
unrealised
revaluations
of
EUR
-312
million
includes
EUR
-297
million
of
revaluations
of
shares
in
In
2019,
the
unrealised
revaluations
of
EUR
137
million
are
due
to
the
revaluation
of
shares
in
Bank
of
Beijing
EUR
35
million
and
shares
in
EquensWorldLine
EUR
101
million.
The
EUR
-472
million
transfer
of
revaluation
reserve
to
retained
earnings
is
mainly
related
to
the
sale
of
shares
in
Kotak
Mahindra
Bank
EUR
-320
million
and
EquensWorldLine
EUR
-149
million.
ING
mainly
hedges
floating
rate
lending
with
interest
rate
swaps.
Due
to
decrease
in
interest
rate
yield
curve
the
interest
rate
swaps
had
a
positive
revaluation
of
EUR
501
million
(2019:
EUR
604
million)
which
is
recognised
in
cash
flow
hedge
reserve.
Changes
in
currency
translation
reserve
30
June
2020
31
December
2019
–2,079
–2,043
84
–134
Realised
gains/losses
transferred
to
the
statement
of
profit
or
loss
–138
Exchange
rate
differences
–734
236
–2,729
–2,079
Unrealised
revaluations
relates
to
changes
in
the
value
of
hedging
instruments
that
are
designated
as
net
investment
hedges.
The
hedging
strategy
is
to
hedge
the
CET1
ratio.
The
net
decrease
of
unrealized
revaluations
and
Exchange
rate
differences
of
EUR
-650
million
(2019:
EUR
102
million
increase)
is
related
to
several
currencies
including
TRY,
PLN,
GBP,
RUB
and
AUD
that
depreciated
against
the
EUR.
Realised
gains/losses
transferred
to
the
statement
of
profit
or
loss
in
2019
is
related
to
the
sale
of
shares
in
Kotak
Mahindra
Bank
(EUR
-119
million)
and
the
effect
of
the
merger
transaction
of
TMB
(EUR
-18
million).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
46
Notes
to
the
Condensed
statement
of
profit
or
loss
2020
2019
2020
2019
8,333
9,659
Interest
expense
on
deposits
from
banks
113
184
Interest
income
on
financial
assets
at
fair
value
through
OCI
283
311
Interest
expense
on
customer
deposits
823
1,482
Interest
income
on
financial
assets
at
amortised
cost
263
359
Interest
expense
on
debt
securities
in
issue
1,005
1,239
Interest
income
on
non-trading
derivatives
(hedge
accounting)
1,769
2,268
Interest
expense
on
subordinated
loans
323
324
Negative
interest
on
liabilities
288
202
Negative
interest
on
assets
117
186
Total
interest
income
using
effective
interest
rate
method
10,935
12,799
Interest
expense
on
non-trading
derivatives
(hedge
accounting)
1,779
2,466
Total
interest
expense
using
effective
interest
rate
method
4,160
5,880
Interest
income
on
financial
assets
at
fair
value
through
profit
or
loss
450
1,006
Interest
expense
on
financial
liabilities
at
fair
value
through
profit
or
loss
348
892
Interest
income
on
non-trading
derivatives
(no
hedge
accounting)
556
588
1
Interest
expense
on
non-trading
derivatives
(no
hedge
accounting)
540
701
1
21
16
Interest
expense
on
lease
liabilities
11
12
Total
other
interest
income
1,026
1,610
25
29
Total
other
interest
expense
925
1,633
11,962
14,410
5,085
7,513
6,877
6,896
1
The
prior
periods
have
been
updated
to
improve
consistency
and
comparability.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
47
14
Net
fee
and
commission
income
Fee
and
commission
income
2020
2019
686
736
439
316
101
91
115
97
Brokerage
and
advisory
fees
321
278
Other
644
648
2,307
2,164
Other,
mainly
consists
of
commission
fees
in
respect
of
bank
guarantees
of
EUR
98
million
(first
six
months
of
2019:
EUR
103
million),
in
respect
of
underwriting
syndication
loans
of
EUR
10
million
(first
six
months
of
2019:
EUR
6
million),
in
respect
of
structured
finance
fees
of
EUR
67
million
(first
six
months
of
2019:
EUR
76
million)
and
in
respect
of
collective
instruments
distributed
but
not
managed
by
ING
of
EUR
112
million
(first
six
months
of
2019:
EUR
80
million).
Fee
and
commission
expenses
2020
2019
301
321
80
95
–
1
3
4
Brokerage
and
advisory
fees
157
129
Other
260
229
801
778
All
of
ING’s
net
fee
and
commission
income
are
in
scope
of
IFRS
15
‘Revenue
from
Contracts
with
Customers’.
Reference
is
made
to
Note
18
‘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
15
Valuation
results
and
net
trading
income
Valuation
results
and
net
trading
income
2020
2019
Securities
trading
results
–1,024
718
Derivatives
trading
results
1,596
–433
54
65
Change
in
fair
value
of
derivatives
relating
to
231
–164
–
cash
flow
hedges
(ineffective
portion)
–42
24
–
other
non-trading
derivatives
383
150
Change
in
fair
value
of
assets
and
liabilities
(hedged
items)
–644
–830
Valuation
results
on
assets
and
liabilities
designated
at
FVPL
and
assets
mandatorily
measured
–293
–329
Foreign
exchange
transactions
results
–264
310
–4
–489
Securities
trading
results
include
the
results
of
market
making
in
instruments
such
as
government
securities,
equity
securities,
corporate
debt
securities,
money
-market
instruments,
and
interest
rate
derivatives
such
as
swaps,
options,
futures,
and
forward
contracts.
Foreign
exchange
transactions
results
include
gains
and
losses
from
spot
and
forward
contracts,
options,
futures,
and
translated
foreign
currency
assets
and
liabilities.
Other
trading
results
include
the
results
of
trading
loans
and
funds
entru
sted.
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.
The
majority
of
the
risks
involved
in
security
and
currency
trading
is
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.
The
result
on
currency
trading
is
included
in
foreign
exchange
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
48
The
fair
value
movements
on
the
derivatives
are
influenced
by
changes
in
the
market
conditions
such
as
stock
prices,
interest
rates
and
currency
exchange
rates.
Following
the
increased
concerns
about
the
Covid-
19
pandemic,
the
global
financial
markets
experienced
more
volatility
than
usual
in
the
first
half
of
2020
which
had
considerable
impact
on
the
results.
Aided
by
substantial
central
bank
intervention,
markets
have
recovered
during
the
second
quarter
of
2020
and
volatility
has
largely
returned
to
pre-pandemic
levels.
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).
As
result
of
the
economic
consequences
of
the
Covid-19
pandemic,
ING
also
observed
significant
widening
of
the
spreads
resulting
in
increased
negative
fair
value
changes.
As
markets
stabilised
in
the
second
quarter
of
2020
and
spreads
tightened,
the
fair
value
changes
In
the
first
six
months
of
2020,
Derivatives
trading
results
include
EUR
-99
million
CVA/DVA
adjustments
on
trading
derivatives
(in
the
first
six
months
of
2019:
EUR
-1
million).
‘Valuation
results
and
net
trading
income’
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
relationsh
ips
as
hedged
items.
In
addition,
‘Valuation
results
and
net
trading
income’
include
the
results
on
assets
and
liabilities
designated
at
fair
value
through
profit
or
loss
and
assets
mandatorily
measured
at
fair
value
through
profit
or
loss.
In
the
first
six
months
of
2020,
Valuation
results
on
assets
and
liabilities
designated
at
fair
value
through
profit
or
loss
include
fair
value
adjustments
on
own
issued
notes
amounting
to
EUR
-141
million
(in
the
first
six
months
of
2019:
EUR
-373
million).
2020
2019
Share
of
result
associates
and
joint
ventures
34
19
Result
on
disposal
of
group
companies
–
117
Net
result
derecognition
of
FA
measured
at
amortised
cost
187
16
Other
48
144
269
296
In
the
first
six
months
of
2020,
ING
realised
a
result
of
EUR
186
million
following
a
one-off
sale
of
certain
securities
at
amortised
cost
driven
by
exception
al
market
conditions
due
to
Covid-19.
The
sale
is
considered
to
be
infrequent,
but
more
than
insignificant
in
value.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
49
17
Earnings
per
ordinary
share
Earnings
per
ordinary
share
Amount
2020
2019
2020
2019
2020
2019
591
1,707
3,897.9
3,893.6
0.15
0.44
Basic
earnings
from
continuing
operations
591
1,707
0.15
0.44
Effect
of
dilutive
instruments:
Stock
option
and
share
plans
0.5
0.6
0.5
0.6
591
1,707
3,898.5
3,894.2
0.15
0.44
Diluted
earnings
from
continuing
operations
591
1,707
0.15
0.44
ING
Group’s
segments
are
based
on
the
internal
reporting
structures
by
lines
of
business.
The
Executive
Board
of
ING
Group
and
the
Management
Board
Banking
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
Executive
Board
of
ING
Group
and
the
Management
Board
Banking.
Recognition
and
measurement
of
segment
results
are
in
line
with
the
accounting
policies
as
described
in
Note
1
‘Basis
for
preparation
and
accounting
policies’.
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.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
50
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
of
results
by
line
of
business
Income
from
retail
and
private
banking
activities
in
the
Netherlands,
including
the
SME
and
mid-corporate
segments,
and
the
Real
Estate
Finance
portfolio
related
to
Dutch
domestic
mid-corporates.
The
main
products
offered
are
current
and
savings
accounts,
business
lending,
mortgages
and
other
consumer
lending
in
the
Netherlands.
Income
from
retail
and
private
banking
activities
in
Belgium
(including
Luxembourg),
including
the
SME
and
mid-corporate
segments.
The
main
products
offered
are
similar
to
those
in
the
Netherlands.
Income
from
retail
and
private
banking
activities
in
Germany
(including
Austria).
The
main
products
offered
are
current
and
savings
accounts,
mortgages
and
other
(Challengers
and
Growth
Markets)
Income
from
retail
banking
activities
in
the
rest
of
the
world,
including
the
SME
and
mid-corporate
segments
in
specific
countries.
The
main
products
offered
are
similar
to
those
in
the
Netherlands.
(Challengers
and
Growth
Markets)
Income
from
wholesale
banking
activities.
The
main
products
are:
lending,
debt
capital
markets,
working
capital
solutions,
export
finance,
daily
banking
solutions,
treasury
and
risk
solutions,
and
corporate
finance.
Specification
of
geographical
segments
Belgium
Germany
Australia,
France,
Italy,
Spain,
Portugal,
Czech
Republic,
and
UK
Legacy
and
Other
Poland,
Romania,
Turkey,
Philippines
and
Asian
bank
stakes
Wholesale
Banking
Rest
of
World
UK,
Americas,
Asia
and
other
countries
in
Central
and
Eastern
Europe
Other
Corporate
Line
Banking
and
the
run-off
portfolio
of
Real
Estate
ING
Group
monitors
and
evaluates
the
performance
of
ING
Group
at
a
consolidated
level
and
by
segment
using
results
based
on
figures
according
to
IFRS
as
adopted
by
the
European
Union
(IFRS
-EU).
The
Executive
Board
and
the
Management
Board
Banking
consider
this
measure
to
be
relevant
to
an
understanding
of
the
Group’s
financial
performance,
because
it
allows
investors
to
understand
the
primary
method
used
by
management
to
evaluate
the
Group’s
operating
performance
and
make
decisions
about
allocating
resources.
In
addition,
ING
Group
believes
that
the
presentation
of
result
s
in
accordance
with
IFRS
-EU
helps
investors
compare
its
segment
performance
on
a
meaningful
basis
by
highlighting
result
before
tax
attributable
to
ongoing
operations
and
the
profitability
of
the
segment
businesses.
IFRS
-EU
result
is
derived
by
excluding
from
IFRS
-IASB
the
impact
of
the
IFRS-EU
‘IAS
39
carve
out’
adjustment.
The
IFRS
-EU
‘IAS
39
carve-out’
adjustment
relates
to
fair
value
portfolio
hedge
accounting
strategies
for
the
mortgage
and
savings
portfolios
in
the
Benelux,
Germany
and
Other
Challengers
that
are
not
eligible
under
IFRS
-IASB.
As
no
hedge
accounting
is
applied
to
these
mortgage
and
savings
portfolios
under
IFRS
-IASB,
the
fair
value
changes
of
the
derivatives
are
not
offset
by
fair
value
changes
of
the
hedge
items
(mortgages
and
savings).
ING
Group
reconciles
the
total
segment
results
to
the
total
result
using
Corporate
Line.
The
Corporate
Line
is
a
reflection
of
capital
management
activities
and
certain
income
and
expenses
that
are
not
allocated
to
the
banking
businesses,
including
a
recog
nition
of
a
value
-added
tax
(VAT)
refund
in
the
first
half
of
2020
(recorded
under
expenses),
while
the
same
period
of
last
year
included
a
EUR
119
million
gain
from
the
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
51
release
of
a
currency
translation
reserve
following
the
sale
of
ING’s
stake
in
Kotak
Mahindra
Bank
in
2019
and
the
recognition
of
a
EUR
79
million
receivable
related
to
the
insolvency
of
a
financial
institution
(both
recorded
under
income).
Furthermore,
the
Corporate
Line
includes
the
isolated
legacy
costs
(mainly
negative
interest
results)
caused
by
the
replacement
of
short-term
funding
with
long-term
funding
during
2013
and
2014.
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’
book
equity
and
the
currency
they
operate
in.
The
difference
between
IFRS
-IASB
and
IFRS
-EU
is
reflected
in
the
Wholesale
segment,
and
in
the
geographical
segments
the
Netherlands,
Belgium,
Germany
and
Other
Challengers.
As
from
the
financial
year
2020
the
information
presented
to
the
Executive
Board
is
no
longer
based
on
underlying
results
but
on
IFRS
as
endorsed
by
the
EU.
Pre
viously
monitoring
and
evaluation
of
ING
Group’s
segments
was
based
on
a
non-
GAAP
financial
performance
measure
called
underlying.
Underlying
result
was
derived
by
excluding
from
IFRS
-IASB
the
following:
the
impact
of
the
IFRS
-EU
‘IAS
39
carve-out’
adjustment,
special
items,
divestments
and
results
from
former
insurance
related
activities.
In
2020
and
2019
no
special
items,
divestments
or
results
from
former
insurance
related
activities
were
recorded
anymore.
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
revenue
specified
to
each
product
or
service
as
this
is
not
reported
internally
and
is
therefore
not
readily
available.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
52
Reconciliation
between
IFRS
-IASB
and
IFRS-EU
income,
expenses
and
net
result
2020
2019
Income
Expenses
Taxation
Non-controlling
interests
1
Income
Expenses
Taxation
Non-controlling
interests
1
Net
result
IFRS
-IASB
attributable
to
equity
holder
of
the
parent
8,688
7,623
438
36
591
8,148
5,654
740
47
1,707
Adjustment
of
the
EU
'IAS
39
carve
out'
2
493
115
379
1,093
243
850
3
9,182
7,623
553
36
969
9,241
5,654
983
47
2,556
1
Net
result,
after
tax
and
non-controlling
interests.
2
ING
prepares
the
Form
6-K
in
accordance
with
IFRS-IASB.
This
information
is
prepared
by
reversing
the
hedge
accounting
impacts
that
applied
under
the
EU
'carve-out'
version
of
IAS
39.
For
the
IFRS-EU
result,
the
impact
of
the
carve-out
is
reinstated
as
this
is
the
measure
at
which
management
monitors
the
business.
3
Results
are
derived
from
figures
in
accordance
with
IFRS-IASB
by
excluding
the
impact
of
adjustment
of
the
EU
'IAS
39
carve-out'.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
53
2020
2019
ING
Total
ING
Total
Income
6,931
–
6,931
6,950
3
6,953
–
Net
fee
and
commission
income
1,507
–1
1,506
1,386
–0
1,386
–
Total
investment
and
other
income
760
–16
745
896
6
902
9,198
–16
9,182
9,232
9
9,241
Expenditure
5,625
1
5,626
5,226
12
5,238
–
Addition
to
loan
loss
provisions
1,997
–
1,998
416
–
416
7,623
1
7,623
5,643
12
5,654
1,575
–17
1,558
3,590
–3
3,586
Taxation
519
34
553
954
29
983
Non-controlling
interests
36
36
47
–
47
1,021
–51
969
2,589
–32
2,556
Adjustment
of
the
EU
'IAS
39
carve
out'
–379
–379
–850
–850
Net
result
IFRS
-IASB
attributable
to
equity
holder
of
the
parent
642
–51
591
1,739
–32
1,707
1
Comprises
for
the
most
part
the
funding
charges
of
ING
Groep
N.V.
(Holding).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
54
Segments
by
line
of
business
2020
2019
Retail
Netherlands
Retail
Belgium
Retail
Germany
Retail
Other
Wholesale
Banking
Corporate
Line
Total
Retail
Netherlands
Retail
Belgium
Retail
Germany
Retail
Other
Wholesale
Banking
Corporate
Line
Total
Income
1,763
937
801
1,392
1,864
173
6,931
1,740
959
796
1,374
1,831
253
6,953
–
Net
fee
and
commission
income
332
207
215
193
561
–2
1,506
329
188
123
212
538
–6
1,386
–
Total
investment
and
other
income
175
71
59
134
354
–48
745
190
112
86
100
248
166
902
2,269
1,215
1,075
1,720
2,780
123
9,182
2,260
1,259
1,005
1,687
2,618
413
9,241
Expenditure
1,088
969
567
1,120
1,728
154
5,626
1,095
873
579
1,061
1,438
192
5,238
–
Addition
to
loan
loss
provisions
139
282
14
304
1,256
3
1,998
33
58
–23
187
162
–
416
1,227
1,251
581
1,424
2,984
156
7,623
1,128
931
556
1,248
1,600
192
5,654
1,043
–36
494
295
–204
–34
1,558
1,132
328
449
438
1,018
221
3,586
Taxation
262
9
188
85
23
–14
553
287
100
153
123
209
112
983
Non-controlling
interests
–1
–
2
27
8
–0
36
–
–
1
38
8
–0
47
781
–44
304
183
–235
–19
969
845
229
295
278
801
109
2,556
Adjustment
of
the
EU
'IAS
39
carve
out'
–379
–379
–850
–850
781
–44
304
183
–614
–19
591
845
229
295
278
–49
109
1,707
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
55
Geographical
split
of
the
segments
2020
2019
Netherlands
Belgium
Germany
Other
Challengers
Growth
Markets
Wholesale
Other
Total
Netherlands
Belgium
Germany
Other
Challengers
Growth
Markets
1
Wholesale
1
Other
Total
Income
2,097
1,090
1,059
893
799
823
169
6,931
2,061
1,112
1,060
885
800
787
247
6,953
–
Net
fee
and
commission
income
494
302
228
136
131
217
–3
1,506
487
270
142
142
156
197
–6
1,386
–
Total
investment
and
other
income
197
98
80
14
203
197
–44
745
90
177
108
5
167
183
172
902
2,788
1,491
1,367
1,043
1,133
1,237
123
9,182
2,638
1,558
1,310
1,032
1,123
1,167
413
9,241
Expenditure
1,736
1,126
652
669
644
644
155
5,626
1,472
1,025
654
638
616
640
193
5,238
–
Addition
to
loan
loss
provisions
320
338
241
212
205
678
3
1,998
78
99
–32
92
130
50
–
416
2,056
1,465
893
882
849
1,322
158
7,623
1,550
1,124
622
730
746
690
193
5,654
732
26
474
162
284
–85
–35
1,558
1,088
435
689
302
377
477
219
3,586
1,043
–36
494
74
222
–
–
1,796
1,132
328
449
163
275
2,348
–310
62
–20
88
62
–85
–2
–204
–44
106
240
139
102
477
–2
1,018
–
–
–
–
–
–
–34
–34
221
221
732
26
474
162
284
–85
–35
1,558
1,088
435
689
302
377
477
219
3,586
Taxation
252
25
170
56
71
–10
–10
553
271
132
233
101
84
48
113
983
Non-controlling
interests
–1
–
2
–
35
–
–0
36
–0
–
1
46
47
481
2
302
106
178
–74
–25
969
817
303
454
201
246
429
106
2,556
Adjustment
of
the
EU
'IAS
39
carve
out'
–338
3
–97
53
–
–
–
–379
–413
–287
–160
10
–850
143
5
205
159
178
–74
–25
591
404
16
294
211
246
429
106
1,707
1)
As
from
2020
financials
of
Philippines
are
reported
in
Growth
Markets
while
previously
Wholesale
Banking
in
Philippines
was
reported
in
WB
Rest
of
World;
historical
figures
have
been
adjusted.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
56
19
Fair
value
of
assets
and
liabilities
a)
Financial
assets
and
liabilities
The
following
table
presents
the
estimated
fair
values
of
ING
Group’s
financial
assets
and
liabilities.
Certain
items
per
the
statement
of
financial
position
are
not
included
in
the
table,
as
they
do
not
meet
the
definition
of
a
financial
asset
or
liability.
The
aggregation
of
the
fair
values
presented
below
does
not
represent,
and
should
not
be
construed
as
representing,
the
underlying
value
of
ING
Group.
The
Covid-19
pandemic
impacted
the
global
financial
markets
in
the
first
six
months
of
2020.
ING
observed
large
volatility
in
the
market
resulting
in
increased
spreads,
markets
distortion
and
also
illiquidity
in
some
specific
markets
which
has
stressed
ING’s
valuation
processes
and
movements
in
level
classifications.
The
volatility
in
the
market
has
stabilised
in
the
second
quarter
of
2020.
Financial
Assets
and
Liabilities,
including
Level
3,
continued
to
be
valued
using
agreed
methodologies
and
ING
continued
to
limit
the
unobservable
input
to
arrive
at
the
most
appropriate
Fair
Market
value.
Fair
value
of
financial
assets
and
liabilities
position
30
June
2020
31
December
2019
30
June
2020
31
December
2019
Cash
and
balances
with
central
banks
118,971
53,202
118,971
53,202
Loans
and
advances
to
banks
30,671
35,133
30,664
35,136
Financial
assets
at
fair
value
through
profit
or
loss
53,781
49,254
53,781
49,254
–
Non-trading
derivatives
2,488
2,257
2,488
2,257
–
Assets
mandatorily
as
at
fair
value
through
profit
or
loss
51,142
41,600
51,142
41,600
–
Assets
designated
as
at
fair
value
through
profit
or
loss
3,700
3,076
3,700
3,076
Financial
assets
at
fair
value
through
other
comprehensive
income
1,998
2,306
1,998
2,306
35,650
30,483
35,650
30,483
1,345
1,680
1,345
1,680
Securities
at
amortised
cost
52,147
46,928
51,085
46,108
Loans
and
advances
to
customers
626,983
621,194
612,387
608,029
1
8,381
5,854
8,381
5,854
987,257
892,966
971,591
878,985
78,531
35,086
78,649
34,826
606,363
575,055
605,633
574,355
Financial
liabilities
at
fair
value
through
profit
or
loss
35,745
28,042
35,745
28,042
–
Non-trading
derivatives
2,435
2,215
2,435
2,215
–
Designated
as
at
fair
value
through
profit
or
loss
52,461
47,684
52,461
47,684
2
12,115
9,776
12,115
9,776
120,907
118,844
121,138
118,528
16,250
17,253
16,697
16,588
924,807
833,956
924,875
832,014
1
Other
assets
do
not
include,
among
others:
(deferred)
tax
assets,
net
defined
benefit
asset,
inventory,
property
development
and
property
obtained
from
foreclosures.
2
Other
liabilities
do
not
include,
among
others:
(deferred)
tax
liabilities,
net
defined
benefit
and
related
employee
benefit
liabilities,
reorganisation
and
other
provisions,
other
taxation,
social
security
contributions
and
lease
liabilities.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
57
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
priority
of
the
inputs
to
the
valuation.
The
fair
value
hierarchy
gives
the
highest
priority
to
(unadjusted)
quoted
prices
in
active
markets
for
identical
assets
or
liabilities
and
the
lowest
priority
to
valuation
techniques
supported
by
unobservable
inputs.
An
active
market
for
the
asset
or
liability
is
a
market
in
which
transactions
for
the
asset
or
liability
occur
with
sufficient
frequency
and
volume
to
provide
reliable
pricing
information
on
an
ongoing
basis.
The
fair
value
hierarchy
consists
of
three
levels,
depending
upon
whether
fair
values
were
determined
based
on
(unadjusted)
quoted
prices
in
an
active
market
(Level
1),
valuation
techniques
with
observable
inputs
(Level
2)
or
valuation
techniques
that
incorporate
inputs
which
are
unobservable
and
which
have
a
more
than
insignificant
impact
on
the
fair
value
of
the
instrument
(Level
3).
Financial
assets
in
Level
3
include
for
example
illiquid
debt
securities,
complex
derivatives,
certain
complex
loans
(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),
and
asset
backed
securities
for
which
there
is
no
active
market
and
a
wide
dispersion
in
quoted
prices.
Observable
inputs
reflect
market
data
obtained
from
independent
sources.
Unobservable
inputs
are
inputs
which
are
based
on
the
Group’s
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
market.
Unobservable
inputs
may
include
volatility,
correlation,
spreads
to
discount
rates,
default
rates
and
recovery
rates,
prepayment
rates,
and
certain
credit
spreads.
Transfers
into
and
transfers
out
of
fair
value
hierarchy
levels
are
made
on
a
quarterly
basis.
A
comprehensive
description
of
Fair
value
hierarchy
is
reported
in
‘Note
38
Fair
value
of
assets
and
liabilities’
of
the
2019
Annual
Report
on
Form
20-F
of
ING
Group.
This
chapter
of
the
Interim
financial
report
should
be
read
in
conjunction
with
the
2019
Annual
Report
on
Form
20-F
of
ING
Group.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
58
Methods
applied
in
determining
fair
values
of
financial
assets
and
liabilities
(carried
at
fair
value)
Total
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
Financial
assets
at
fair
value
through
profit
or
loss
9,361
13,228
43,504
35,852
915
174
53,781
49,254
-
Non-trading
derivatives
2,482
2,249
6
8
2,488
2,257
-
Assets
mandatorily
at
fair
value
through
profit
or
loss
27
22
49,836
40,196
1,280
1,381
51,142
41,600
-
Assets
designated
as
at
fair
value
through
profit
or
loss
142
203
2,492
1,628
1,066
1,244
3,700
3,076
Financial
assets
at
fair
value
through
other
comprehensive
income
36,312
32,165
1,057
343
1,624
1,961
38,993
34,468
45,842
45,618
99,372
80,269
4,890
4,768
150,103
130,655
Financial
liabilities
at
fair
value
through
profit
or
loss
1,217
1,446
34,332
26,401
197
195
35,745
28,042
–
Non-trading
derivatives
1
2,278
2,105
155
110
2,435
2,215
–
Financial
liabilities
designated
as
at
fair
value
through
profit
or
loss
966
1,081
50,712
46,419
783
184
52,461
47,684
2,184
2,527
87,322
74,924
1,135
490
90,641
77,942
In
the
first
six
months
of
2020,
the
increase
in
financial
assets
mandatorily
at
fair
value
through
profit
or
loss
and
financial
liabilities
designated
as
at
fair
value
through
profit
or
loss
mainly
relates
to
(reverse)
repurchase
transactions
for
which
the
valuation
technique
is
supported
by
observable
inputs.
In
2020
there
were
no
significant
transfers
between
level
1
and
2
and
no
significant
changes
in
valuation
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
59
Changes
in
Level
3
Financial
assets
Non-trading
derivatives
Total
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
174
494
8
27
1,381
1,042
1,244
1,075
1,961
2,749
4,768
5,387
Realised
gain/loss
recognised
in
the
statement
of
profit
or
loss
during
the
period
–42
40
–1
–21
–70
–63
–110
–6
–9
–15
–231
–66
Revaluation
recognised
in
other
comprehensive
income
during
the
period
–51
155
–51
155
96
28
3
928
1,494
173
360
9
11
1,208
1,893
–53
–53
–3
–3
–836
–832
–101
–212
–187
–680
–1,179
–1,780
Maturity/settlement
–29
–11
–1
–43
–461
–41
–35
–97
–212
–210
–719
Reclassifications
–279
2
279
1
3
3
4
787
26
4
–2
9
63
785
103
–18
–72
–86
–88
–101
–53
–205
–214
Exchange
rate
differences
1
2
–1
–2
1
1
1
Changes
in
the
composition
of
the
group
and
other
changes
2
2
–0
1
2
3
915
174
6
8
1,280
1,381
1,066
1,244
1,624
1,961
4,890
4,768
1
Net
gains/losses
were
recorded
as
‘Valuation
results
and
net
trading
income’
in
the
statement
of
profit
or
loss.
The
total
amounts
includes
EUR
202
million
(31
December
2019:
EUR
43
million)
of
unrealised
gains
and
losses
recognised
in
the
statement
of
profit
or
2
Revaluation
recognised
in
other
comprehensive
income
is
included
on
the
line
‘Net
change
in
fair
value
of
debt
instruments
at
fair
value
through
other
comprehensive
income’.
In
the
first
six
months
of
2020,
the
transfer
into
Level
3
assets
is
mainly
driven
by
debt
securities
that
are
part
of
a
structure
transferred
into
level
3
due
to
illiquidity
in
the
market
which
decreased
market
observability
Transfers
out
of
Level
3
is
mainly
related
to
debt
obligations
due
to
the
valuation
no
longer
being
significantly
impacted
by
unobservable
inputs.
In
2019
the
amounts
reported
on
the
line
reclassifications
rela
te
to
syndicated
loans
reclassified
from
trading
assets
to
financial
assets
mandatory
at
FVPL.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
60
Changes
in
Level
3
Financial
liabilities
Financial
liabilities
designated
as
at
fair
value
through
profit
or
loss
Total
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
195
122
110
80
184
708
490
910
Realised
gain/loss
recognised
in
the
statement
of
profit
or
loss
1
–30
102
28
–16
–10
32
–12
118
32
72
18
46
555
35
605
154
Early
repayment
of
liabilities
–73
–30
–0
–0
–68
–10
–141
–40
Maturity/settlement
–8
–32
–1
–59
–479
–69
–511
92
13
224
49
316
62
–11
–52
–42
–150
–54
–202
197
195
155
110
783
184
1,135
490
1
Net
gains/losses
were
recorded
as
‘Valuation
results
and
net
trading
income’
in
the
statement
of
profit
or
loss.
The
total
amount
includes
EUR
13
million(31
December
2019:
EUR
115
million)
of
unrealised
gains
and
losses
recognised
in
the
statement
of
profit
or
loss.
In
the
first
six
months
of
2020,
the
tranfers
into
level
3
mainly
consisted
of
debt
issued
at
designated
fair
value,
mainly
structured
notes,
which
were
transferred
into
Level
3
due
to
illiquidity
in
the
market
which
caused
the
valuation
being
significantl
y
impacted
by
unobservable
inputs.
In
2019,
financial
liabilities
mainly
repo’s
were
transferred
out
of
Level
3
mainly
due
to
the
valuation
not
being
significantly
impacted
by
unobservable
inputs.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
61
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
‘Valuation
results
and
net
trading
income’
in
the
statement
of
profit
or
loss.
Unrealised
gains
and
losses
that
relate
to
‘Financial
assets
at
fair
value
through
other
comprehensive
income’
are
included
in
the
Revaluation
reserve
–
Equity
securities
at
fair
value
through
other
comprehensive
income
or
Debt
Instruments
at
fair
value
through
other
comprehensive
income.
Level
3
Financial
assets
and
liabilities
Financial
assets
measured
at
fair
value
in
the
statement
of
financial
position
as
at
30
June
2020
of
EUR
150
billion
includes
an
amount
of
EUR
4.9
billion
(
3.3%)
which
is
classified
as
Level
3
(31
December
2019:
EUR
4.8
billion,
being
3.6%).
Changes
in
Level
3
from
31
December
2019
to
30
June
2020
are
detailed
above
in
the
table
Changes
in
Level
3
Financial
assets.
Financial
liabilities
measured
at
fair
value
in
the
statement
of
financial
position
as
at
30
June
2020
of
EUR
91
billion
includes
an
amount
of
EUR
1.1
billion
(
1.3%)
which
is
classified
as
Level
3
(31
December
2019:
EUR
0.5
billion,
being
0.6%).
Changes
in
Level
3
from
31
December
2019
to
30
June
2020
are
disclosed
above
in
the
table
‘Changes
in
Level
3
Financial
liabilities’.
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’s
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
30
June
2020
of
EUR
4.9
billion
(31
December
2019:
EUR
4.8
billion),
an
amount
of
EUR
2.9
billion
(
59.9%)
(31
December
2019:
EUR
2.5
billion,
being
52.6%)
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’s
own
unobservable
inputs.
Furthermore,
Level
3
financial
assets
includes
approximately
EUR
1.1
billion
(31
December
2019:
EUR
1.3
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
0.8
billion
(31
December
2019:
EUR
1.0
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
30
June
2020
of
EUR
1.1
billion
(31
December
2019:
EUR
0.5
billion),
an
amount
of
EUR
0.7
billion
(64.6%)
(31
December
2019:
EUR
0.2
billion,
being
39.3%)
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’s
own
unobservable
inputs.
Furthermore,
Level
3
financial
liabilities
includes
approximately
EUR
0.1
billion
(31
December
2019:
EUR
0.1
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
0.3
billion
(31
December
2019:
EUR
0.2
billion)
of
the
fair
value
classified
in
Level
3
financial
liabilities
is
established
using
valuation
techniques
that
incorporates
certain
inputs
that
are
unobservable.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
62
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
3
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
analys
is
of
unobservable
inputs
(Level
3).
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
63
Valuation
techniques
and
range
of
unobservable
inputs
(Level
3)
Assets
Liabilities
Significant
unobservable
inputs
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
At
fair
value
through
profit
or
loss
1,470
920
0%
0%
107%
121%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
139
146
1
Price
–
–
5,475
5,475
919
1,576
0%
0%
100%
104%
n/a
n/a
n/a
n/a
2
1
1,013
250
539
3
434
1
1%
4%
4%
4%
350
184
69%
83%
112%
124%
n/a
n/a
n/a
n/a
14%
13%
27%
20%
Equity/Equity
correlation
0.6
0.6
0.9
0.8
-0.7
-0.5
0.3
0.3
1%
2%
5%
4%
Interest
rate
volatility
(%)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Derivatives
5
13
83
68
Interest
rate
volatility
(bps)
17
17
137
137
Interest
rate
correlation
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2%
2%
2%
2%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1
n/a
n/a
n/a
n/a
9
5
10
8
144
102
185
183
4
2
25,961
11,054
n/a
n/a
n/a
n/a
12%
12%
12%
12%
99%
n/a
107%
n/a
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
64
Valuation
techniques
and
range
of
unobservable
inputs
(Level
3)
Assets
Liabilities
Significant
unobservable
inputs
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
30
June
2020
31
December
2019
45
42
80
50
3%
4%
113%
84%
Equity/Equity
correlation
0.2
-
0.9
-
-0.6
-0.6
0.3
0.6
0%
0%
29%
13%
5
3
3
3
18%
11%
79%
53%
n/a
0.3
n/a
0.9
-0.5
-0.5
-0.3
-0.3
At
fair
value
through
other
comprehensive
income
n/a
n/a
n/a
n/a
1,345
1,680
9%
6%
9%
6%
279
282
2
n/a
1.91
n/a
3%
3%
3%
3%
100%
100%
100%
187%
Other
63
n/a
80
n/a
Total
4,890
4,768
1,135
490
The
presented
Fair
Values
include
an
IFRS
Fair
Value
Adjustment
that
reflects
the
fair
exit
price
of
which
the
valuation
changes
are
booked
through
P&L
or
OCI.
Additionally,
an
adjustment
that
is
to
capture
the
90%
confidence
prudency
is
considered
as
Additional
Valuation
Adjustment
according
to
CRR
Article
105/
RTS,
which
is
not
part
of
the
IFRS
Fair
Value
and
is
Sensitivity
analysis
of
unobservable
inputs
(Level
3)
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
90%
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.
If
ING
had
used
input
values
from
the
upper
and
lower
bound
of
this
range
of
reasonably
possible
alternative
input
values
when
valuing
these
instruments
as
of
30
June
2020,
then
the
impact
would
have
been
higher
or
lower
as
indicated
below.
The
purpose
of
this
disclosure
is
to
present
the
possible
impact
of
a
change
of
unobservable
inputs
in
the
fair
value
of
financial
instruments
where
unobservable
inputs
are
significant
to
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.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
65
Because
of
the
approach
taken,
the
valuation
uncertainty
in
the
table
below
is
broken
down
by
related
risk
class
rather
than
by
product.
In
reality
some
valuation
inputs
are
interrelated
and
it
would
be
unlikely
that
all
unobservable
inputs
would
ever
be
simultaneously
at
the
limits
of
their
respective
ranges
of
reasonably
possible
alternatives.
Therefore
it
can
be
assumed
that
the
estimates
in
the
table
below
show
a
greater
fair
value
uncertainty
than
the
realistic
position
at
period
end
assuming
normal
circumstances/normal
markets.
Also,
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
possible
impact
of
a
change
of
unobservable
inputs
in
the
fair
value
of
financial
instruments
at
fair
value
through
other
comprehensive
income
are
estimated
to
be
immaterial.
Sensitivity
analysis
of
Level
3
instruments
30
June
2020
31
December
2019
30
June
2020
31
December
2019
Fair
value
through
profit
or
loss
Equity
(equity
derivatives,
structured
notes)
43
35
–20
Interest
rates
(Rates
derivatives,
FX
derivatives)
25
40
–1
Credit
(Debt
securities,
Loans,
structured
notes,
credit
derivatives)
25
10
–9
93
85
–30
–
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.
Under
the
terms
of
the
settlement
agreement
ING
paid
a
fine
of
EUR
675
million
and
EUR
100
million
for
disgorgement.
In
connection
with
the
investigations,
ING
had
also
received
information
requests
from
the
US
Securities
and
Exchange
Commission
(“SEC”).
As
ING
announced
on
5
September
2018,
ING
has
received
a
formal
notification
from
the
SEC
that
it
has
concluded
its
investigation.
In
the
letter
dated
4
September
2018
the
Division
of
Enforcement
states
that,
based
on
information
as
of
the
date
thereof,
it
does
not
intend
to
recommend
an
SEC
enforcement
action
against
ING.
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,
have
filed
requests
with
the
Court
of
Appeal
in
The
Netherlands
to
reconsider
the
prosecutor’s
decision
to
enter
into
the
settlement
agreement
with
ING
and
not
to
prosecute
ING
or
(former)
ING
employees
and
that
the
Court
of
Appeal
is
now
taking
procedural
steps
as
part
of
due
process
of
law
before
entering
into
its
final
decision
making.
In
addition
other
parties
have
filed
or
may
file
requests
for
disciplinary
proceedings
against
ING
employees
based
on
the
Dutch
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’s
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.
|
|
statements
|
|
|
ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
66
Interest
rate
derivatives
claims:
ING
is
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.
The
total
amounts
that
need
to
be
repaid
or
compensated
in
some
cases
still
need
to
be
determined.
ING
may
decide
to
appeal
against
adverse
rulings.
Although
the
outcome
of
the
pending
litigation
and
similar
cases
that
may
be
brought
in
the
future
is
uncertain,
it
is
possible
that
the
courts
may
ultimately
rule
in
favour
of
the
claimants
in
some
or
all
of
such
cases.
Where
appropriate
a
provision
has
been
taken.
The
aggregate
financial
impact
of
the
current
and
future
litigation
could
become
material.
As
requested
by
the
AFM,
ING
has
reviewed
a
significant
part
of
the
files
of
clients
who
bought
interest
rate
derivatives.
In
December
2015,
the
AFM
concluded
that
Dutch
banks
may
have
to
re
-assess
certain
client
files,
potentially
including
certain
derivative
contracts
that
were
terminated
prior
to
April
2014
or
other
client
files.
As
advised
by
the
AFM,
the
Minister
of
Finance
appointed
a
Committee
of
independent
experts
(the
“Committee”)
which
has
established
a
uniform
recovery
framework
for
Dutch
SME
clients
with
interest
rate
derivatives.
ING
has
adopted
this
recovery
framework
and
has
reassessed
individual
files
against
this
framework.
ING
has
taken
an
additional
provision
for
the
financial
consequences
of
the
recovery
framework.
In
2017,
ING
has
informed
the
majority
of
the
relevant
clients
whether
they
are
in
scope
of
the
recovery
framework,
and
thus
eligible
for
compensation,
or
not.
Because
implementation
by
ING
of
the
uniform
recovery
framework
encountered
delay,
ING
has
previously
offered
advance
payments
to
customers
out
of
the
existing
provision.
As
of
December
2018,
all
customers
in
scope
of
the
uniform
recovery
framework
have
received
an
offer
of
compensation
from
ING
(including
offers
of
no
compensation).
In
July
2020,
the
independent
derivative
dispute
committee
rejected
all
claims
by
the
client
against
ING
in
ING’s
last
open
file
under
the
uniform
recovery
framework.
Interest
surcharges
claims:
ING
received
complaints
and
was
involved
in
litigation
with
natural
persons
(natuurlijke
personen)
in
the
Netherlands
regarding
increases
in
interest
surcharges
with
respect
to
several
credit
products,
including
but
not
limited
to
commercial
property
(commercieel
verhuurd
onroerend
goed).
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
surcharged
based
upon
the
essential
obligations
in
the
contract.
In
line
with
the
Dutch
Supreme
Court
ruling
in
a
case
involving
another
bank,
ING
will
continue
to
deal
with
all
claims
individually.
Criminal
proceedings
regarding
cash
company
financing:
In
June
2017,
a
Belgian
criminal
Court
ruled
that
ING
Luxembourg
assisted
third
parties
in
2000
to
commit
a
tax
fraud
in
the
context
of
the
purchase
of
the
shares
of
a
cash
company.
The
Court
convicted
ING
Luxembourg,
among
others,
and
ordered
ING
to
pay
a
penal
fine
of
EUR
120,000
(suspended
for
half
of
the
total
amount).
The
court
also
ordered
ING
Luxembourg
jointly
and
severally
with
other
parties,
to
pay
EUR
31.48
million
(together
with
any
interest
payable
under
applicable
law)
to
the
bankruptcy
trustee
of
the
cash
company.
In
July
2017,
ING
Luxembourg
filed
an
appeal
against
this
judgment.
A
settlement
with
all
the
civil
parties
involved
was
reached
in
mid-2018.
However,
this
settlement
does
not
apply
to
the
criminal
conviction
of
ING
Luxembourg.
In
January
2020,
the
Court
of
Appeal
of
Antwerp
reformed
the
first
judgment:
ING
Luxemburg
benefitted
from
an
"opschorting
van
de
uitspraak/suspension
du
prononcé"
which
means
that
the
conviction
has
been
upheld,
but
no
penal
sanction
has
been
pronounced
(penalties
suspended).
The
judgement
is
now
final.
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
court
proceedings
in
first
instance
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.
The
courts
in
first
instance
have
applied
in
their
rulings
different
criteria
regarding
the
reimbursement
of
expenses.
ING
Spain
has
filed
an
appeal
against
a
number
of
these
court
decisions.
ING
Spain
has
also
been
included,
together
with
other
Spanish
banks,
in
three
class
actions
filed
by
customer
associations.
The
outcome
of
the
pending
litigation
and
similar
cases
that
may
be
brought
in
the
future
is
uncertain.
A
provision
has
been
taken.
However,
the
aggregate
financial
impact
of
the
current
and
future
litigation
could
change.
In
February
2018,
the
Spanish
Supreme
Court
ruled
that
Stamp
Duty
(Impuesto
de
Actos
Jurídicos
Documentados)
expenses
are
chargeable
to
the
customer,
while
in
October
2018
it
ruled
that
Stamp
Duty
is
chargeable
to
the
banks.
In
November
2018,
the
Spanish
Supreme
Court
clarified
the
issue
regarding
Stamp
Duty
by
stating
that
this
tax
should
be
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statements
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
67
borne
by
the
customer.
As
for
the
remaining
types
of
the
expenses,
in
January
2019,
the
Spanish
Supreme
Court
issued
several
decisions
that
stated
that
the
client
and
the
bank
each
have
to
bear
half
of
the
notary
and
management
company
costs
and
that
registry
costs
have
to
be
borne
in
full
by
the
bank.
Allocation
of
valuation
costs
between
the
bank
and
the
customer
were
not
addressed
by
the
Spanish
Supreme
Court
decisions
and
remain
uncertain.
In
July
2020,
the
European
Court
of
Justice
ruled
that
if
the
clause
that
regulates
the
mortgage
formation
costs
is
declared
null
and
void,
any
mortgage
formation
costs
payable
pursuant
to
such
clause
have
to
be
borne
in
full
by
the
bank,
and
not
equally
divided
between
the
bank
and
the
customer,
contrary
to
the
Spanish
Supreme
Court
in
its
January
2019
ruling.
ING
Spain
is
assessing
the
impact
of
this
decision
on
claims
from
customers
against
ING.
For
further
information
regarding
legal
proceedings
we
refer
to
note
46
“Legal
proceedings”
in
ING
Group’s
2019
Consolidated
financial
statements
as
included
in
the
Form
20-F.
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
subsidiaries,
associates,
joint
ventures,
key
management
personnel,
and
various
defined
benefit
and
contribution
plans.
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
bal
ances
with
related
parties.
There
are
no
subsequent
events
to
report.
ING
Group’s
CET1
ratio
increased
to
15.0%
in
Q2
2020
(EOY
2019:
14.6%),
mainly
due
to
capital
generation
and
decreased
RWA
from
various
relief
measures
and
management
actions
taken.
Policy
changes
due
to
the
Covid-19
pandemic
As
a
reaction
to
the
ongoing
global
pandemic,
the
following
relevant
regulators
have
introduced
a
number
of
changes
to
regulatory
capital
requirements
applica
ble
to
ING:
The
DNB
decreased
ING
Group’s
Systemic
Risk
Buffer
requirement
from
3.00%
to
2.50%.
Moreover,
various
competent
authorities
changed
or
removed
Countercyclical
Buffer
(CCyB)
requirements,
which
reduced
the
fully
loaded
CCyB
for
ING
from
24
basis
points
to
3
basis
points.
The
ECB
effectuated
Art
104(a)
CRDV
as
of
the
first
quarter
of
2020,
which
essentially
brings
forward
the
possibility
to
cover
Pillar
2
Requirements
with
a
mix
of
own
funds
instead
of
CET1
only.
Consequentially,
ING
Group’s
fully
loaded
Total
Capital
Maximum
Distributable
Amount
trigger
level
decreased
from
15.49%
to
14.78%.
This
also
reduced
the
fully
loaded
CET1
requirement,
which
decreased
from
11.99%
to
10.51%,
and
the
fully
loaded
Tier
1
requirement,
which
decreased
from
13.49%
to
12.34%.
ING
is
committed
to
maintaining
a
CET1
ratio
above
the
prevailing
fully
loaded
requirement
plus
a
comfortable
management
buffer.
The
ECB
provided
some
relief
on
RWA
increases
by
postponing
pending
TRIM
reviews
by
at
least
six
months.
The
DNB
further
announced
it
is
delaying
the
introduction
of
a
floor
for
mortgage
loan
risk
weighting.
The
Basel
Committee
on
Banking
Supervision
announced
the
postponement
of
the
implementation
date
of
Basel
IV
standards
by
one
year
to
the
beginning
of
2023.
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statements
|
|
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
68
Following
the
CRR
amendments
due
to
Covid-19
(“CRR
quick
fix”
or
CRR
2.5),
ING
adopted
a)
an
extension
of
the
IFRS
9
transitional
arrangements
(EUR
0.2
billion
capital
increase),
b)
the
infrastructure
support
factor
(EUR
0.9
billion
RWA
relief)
and
c)
the
SME
support
factor
(EUR
2.0
billion
RWA
relief).
Dividend
In
March
2020,
ING
Group
announced
that
it
will
suspend
any
payment
of
dividends
following
an
industry
wide
recommendation
of
the
ECB.
The
ECB
subsequently
updated
their
recommendat
ion
at
the
end
of
July,
extending
the
timeframe
for
suspension
of
dividend
payments
until
1
January
2021.
Any
dividend
payment
by
ING
will
therefore
be
delayed
until
after
1
January
2021.
Ratings
The
ratings
from
S&P,
Moody’s
and
Fitch
remained
unchanged
in
the
first
half
of
the
year.
Fitch
changed
its
outlook
on
both
ING
Group
and
ING
Bank
to
‘Rating
Watch
Negative’
(RWN)
on
1
April
2020.
Standard
&
Poor's
changed
its
outlook
for
ING
Group
to
'Negative'
on
23
April
2020.
Main
credit
ratings
of
ING
at
30
June
2020
Moody’s
Fitch
Rating
Outlook
Rating
Outlook
Rating
Outlook
Long-term
A-
Negative
Baa1
Stable
A+
RWN*
Long-term
A+
Stable
Aa3
Stable
AA-
RWN*
Short-term
A-1
P-1
F1+
ING’s
key
credit
ratings
and
outlook
are
shown
in
the
table
above.
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
fro
m
the
rating
agency.
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’s
judgment,
circumstances
so
warrant.
ING
accepts
no
responsibility
for
the
accuracy
or
reliability
of
the
ratings.
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statements
|
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ING
Group
Interim
financial
report
on
form
6-K
for
the
period
ended
30
June
2020
-
Unaudited
69
SIGNATURES
Pursuant
to
the
requirements
of
the
Securities
Exchange
Act
of
1934,
the
registrant
has
duly
caused
this
report
to
be
signed
on
its
behalf
by
the
undersigned,
thereunto
duly
authorized.
(Registrant)