ING Group’s Q1 2025 Results: Navigating Uncertainty with Resilience and Ambition

Amid ongoing geopolitical tensions and macroeconomic volatility, ING Group delivered a robust Q1 2025 performance, underscored by strong deposit growth, rising fee income, and a resilient CET1 capital ratio. The Dutch banking giant’s results reflect its dual focus on client-centric strategies and disciplined capital management, even as it faces headwinds in lending and wholesale markets.

Key Financial Highlights

• Net Result: €1,455 million, driven by a 10% year-on-year rise in fee income and a 23% surge in sustainable finance volumes.
• CET1 Ratio: 13.6%, comfortably above its 12.5% long-term target, supporting its announced €2.0 billion share buyback program.
• Retail Banking Growth: Mobile primary customers increased by 174,000, with core deposits up €17 billion and mortgages climbing €6 billion in the Netherlands and Germany.
• Risk Management: Risk costs fell to €313 million, or 18 basis points of average lending, reflecting strong asset quality.

Retail Banking: The Engine of Growth

ING’s retail division was the star performer, benefiting from its digital-first strategy and expanding customer base. The Netherlands and Germany, its largest markets, saw mortgage applications jump 20% year-on-year to 125,000, driven by sustained demand for housing and competitive pricing.

Fee income rose 18% year-on-year, fueled by investment products and customer trading activity. Notably, ING’s push into sustainability tools—such as CO₂ emissions tracking in Spain and energy efficiency programs in Australia—signals a strategic shift toward embedding ESG into its retail services.

Wholesale Banking: Navigating Volatility

Wholesale Banking’s total income remained stable, though lending volumes dipped due to cautious corporate behavior in uncertain markets. Fee income, however, rose quarter-on-quarter, thanks to strong performance in Global Capital Markets and Trade Finance.

The division’s sustainable finance volumes hit €30 billion, a 23% year-on-year increase, highlighting ING’s leadership in green and transition finance. CEO Steven van Rijswijk emphasized the bank’s role in supporting European competitiveness through infrastructure and tech investments, even as it grapples with regulatory pressures.

Capital Allocation and Shareholder Returns

The €2.0 billion share buyback program announced in Q1 underscores ING’s confidence in its capital position. The bank’s CET1 ratio, now at 13.6%, provides a buffer against Basel IV adjustments and geopolitical risks. Management reiterated its long-term target of 12.5% but raised its 2025 guidance to 12.8–13%, reflecting prudence amid potential tariff-related disruptions.

Challenges Ahead

• Margin Pressures: A shift toward lower-margin mortgages and inflation-driven operating costs (up 6% year-on-year to €3.8 billion) could strain profitability.
• Housing Markets: Elevated prices in key markets like the Netherlands and Germany pose risks if demand softens.
• Macroeconomic Uncertainty: Trade disputes and energy costs could dampen corporate lending activity in Wholesale Banking.

Conclusion: A Resilient Foundation for Growth

ING’s Q1 results demonstrate its ability to navigate a turbulent environment through retail dominance, sustainable finance innovation, and capital discipline. With fee income growth on track to hit €5 billion by 2027 and a CET1 ratio well above target, the bank is positioned to capitalize on opportunities in Europe’s fragmented banking landscape.

While risks remain, ING’s diversified client base, digital infrastructure, and sustainability focus suggest it is building a durable competitive edge. Investors should monitor its progress in scaling fee-based revenue and mitigating margin pressures, but the first quarter’s results provide a solid foundation for optimism.

As van Rijswijk noted, “ING’s resilience isn’t accidental—it’s the product of deliberate choices.” With €23 billion in deposit growth and a CET1 ratio at 13.6%, the bank is poised to weather near-term headwinds while pursuing its long-term strategic goals.