ING Groep N.V. (ING) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects strong financial performance with increased net core lending and core deposits. Fee income growth is notable, especially in investment products. Expenses are well-managed, and the CET1 ratio is stable despite a share buyback. The Q&A reveals a positive outlook on liability margins, insurance strategy, and mortgage demand, although some uncertainties remain in wholesale banking. Overall, the company's strategic plans and financial health indicate a positive sentiment, likely leading to a stock price increase of 2% to 8%.
Key Financial Performance
Mobile primary customer growth Grew by 125,000 in Q1 2026, on track to achieve 1 million growth target for the year. Growth is seasonally lower in Q1 but maintained momentum.
Loan growth Annualized pace of more than 8%. Retail banking grew by 9.4% in Q1 2026, driven by mortgages and strong growth in business banking.
Wholesale Banking loan book Grew by EUR 5.6 billion while keeping risk-weighted assets broadly stable.
Deposits Solid inflow at an annualized rate of 4%, despite seasonal outflows and conversion into investment products.
Fee income Rose by 13% year-on-year, supported by growing customer base, higher customer trading volumes, and strong deal flow in Wholesale Banking.
Return on tangible equity 13.6% for Q1 2026.
Sustainable volume mobilized Increased by 11% year-on-year, supporting clients in sustainable transitions.
EPS (Earnings Per Share) Improved by 11% on a 12-month rolling basis.
Commercial NII (Net Interest Income) Grew by EUR 132 million quarter-on-quarter and was 7% higher than last year, supported by volume growth and hedging tailwind.
Net core lending Increased by EUR 15 billion in Q1 2026. Retail Banking contributed EUR 9.4 billion, driven by mortgages and business banking. Wholesale Banking added EUR 5.6 billion.
Core deposits Increased by EUR 7.2 billion in Q1 2026. Retail Banking contributed EUR 4.3 billion, and Wholesale Banking added EUR 2.9 billion.
Investment products Fee income grew by 15% year-on-year, with 8% growth in customers with investment accounts and 15% growth in assets under management.
Expenses Increased by 1.1% year-on-year, reflecting disciplined cost management and scalable growth capabilities.
Risk costs EUR 346 million in Q1 2026, equivalent to 19 basis points of average customer lending, slightly below through-the-cycle average.
Core equity Tier 1 ratio Maintained at around 13%, despite a EUR 1 billion share buyback program.
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Operating Highlights
Mobile primary customer growth: Grew by 125,000 in Q1 2026, on track to achieve 1 million growth target for the year.
Business banking in Italy: Recently launched, expanding the franchise.
Insurance broker model in the Netherlands: Rolling out to integrate insurance capabilities into the mobile app.
Agentic mortgages: Live in the Netherlands, soon rolling out to other countries.
Conversational banking: Personal assistant with agentic experience, on the verge of global rollout.
Retail banking loan growth: Grew by 9.4% in Q1 2026, driven by mortgages and business banking.
Wholesale banking loan growth: Loan book grew by EUR 5.6 billion while keeping risk-weighted assets stable.
Fee income: Increased by 13% year-on-year, supported by customer growth, trading volumes, and strong deal flow.
Sustainable volume mobilized: Increased by 11% year-on-year, supporting clients in sustainable transitions.
Digitalization and AI: 90% of AI pilots moved to production; 75% of customer checks resolved by AI; hyper-personalized marketing campaigns and agentic mortgages implemented.
Operational efficiency: FTEs decreased by 0.6%, cost growth limited to 2%, while commercial growth significantly outpaced costs.
Capital efficiency: Generated EUR 65 billion of profitable lending growth over 12 months, consuming only EUR 1 billion of capital.
Shareholder returns: EUR 4.4 billion returned to shareholders in the past 12 months, including share buybacks.
Profitability targets: Set firm direction towards 2027 targets with EPS improving by 11% on a 12-month rolling basis.
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Risk or Challenges
Geopolitical and macroeconomic uncertainty: The first quarter of 2026 unfolded against the backdrop of geopolitical and macroeconomic uncertainty, which could potentially impact the company's operations and financial performance.
Market volatility: Heightened market volatility towards the end of the quarter negatively affected hedge ineffectiveness and financial market activities, impacting income.
Economic effects of the war in the Middle East: A prudent overlay was included to address the possible impact of higher energy prices and broader economic effects of the war in the Middle East.
Regulatory compliance: The implementation of a new dividend reserving approach to comply with EBA guidelines had a one-off negative effect on the core equity Tier 1 ratio.
Cost pressures from wage inflation: Wage inflation posed a challenge, though it was largely offset by savings from prior restructurings.
Energy price increases: Potential impact of higher energy prices was addressed through management overlays, indicating a risk to operational costs and customer repayment capabilities.
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Guidance & Outlook
Mobile Primary Customer Growth: The company aims to grow its mobile primary customer base by 1 million per year, emphasizing customers who use ING as their primary bank.
Loan Growth: Loan growth is projected to continue at an annualized pace of over 8%, with retail banking expected to grow by 9.4% and Wholesale Banking contributing significantly.
Fee Income Growth: Fee income is expected to maintain strong momentum, supported by customer growth, higher trading volumes, and diversification of income sources.
Commercial NII (Net Interest Income): Commercial NII for the full year is projected to be between EUR 16.5 billion and EUR 16.7 billion, reflecting strong volume growth and disciplined pricing.
Capital Efficiency: The company plans to maintain strong capital efficiency, with continued capital velocity measures in both Wholesale and Retail Banking.
Shareholder Returns: A new EUR 1 billion share buyback program has been initiated, with a commitment to assess additional distributions semiannually.
Operational Scalability: The company is focused on achieving scalable growth through digitalization, AI deployment, and operational excellence, aiming to improve efficiency ratios in the coming years.
Profitability Targets: The company is on track to achieve its profitability targets by 2027, supported by rising EPS and return on tangible equity.
Sustainable Growth: Sustainable volume mobilized is expected to continue growing, supporting clients in their sustainable transitions.
Market Outlook: The company remains confident in the resilience of its largest mortgage markets, supported by low unemployment rates and stable market fundamentals.
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Shareholder Return Plan
Dividend Distribution: 50% of the EUR 6.4 billion net profit generated over the past 12 months has been reserved for regular dividend distributions.
Share Buyback Program: Over the past 12 months, EUR 4.4 billion of additional distributions have been made, largely in the form of share buybacks. A new EUR 1 billion share buyback program has been announced and started, expected to run for the next 6 months.
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Key Q&A
Q:What is the outlook for the liability margin and the competitive environment on deposits?
A:The liability margin is expected to be in the mid-range of 100 to 110 basis points this year, driven by hedging tailwinds and lower campaign-related deposit costs in the first quarter. The competitive environment on deposits is strong but rational, with an average growth expectation of 5%.
Q:What is the long-term strategy for insurance, especially with the move into mandated broker roles in the Netherlands?
A:The strategy involves building broader client relationships and moving up the value chain in insurance. Growth in insurance fees was 14% year-over-year, and the company is rolling out in more markets, hiring specialists, and maturing its insurance offerings. There is significant upside potential, but underwriting services are not currently being considered.
Q:How does the company view the opportunity to exceed the 100-110 basis points liability margin range temporarily?
A:The company acknowledges the possibility of temporarily exceeding the range due to higher short-term interest rates and forward curves. However, competition and rational behavior in the market are expected to bring margins back to the long-term range over time.
Q:What is the impact of the EUR 600 million increase in replicating income on commercial NII guidance?
A:The EUR 200 million increase in commercial NII guidance is entirely due to liability income, supported by higher short-term interest rates and forward curves. The replicating income guidance reflects the expected volumes at higher margins and better replication rates.
Q:What is the current commercial momentum in mortgages and business banking, and how is it evolving?
A:Demand for mortgages remains strong due to low unemployment rates and housing shortages. Fee growth is driven by deeper customer relationships and new product rollouts. However, lending demand in Wholesale Banking could be muted in the future due to macroeconomic uncertainties.
Q:What is the purpose of the EUR 94 million overlay in cost of risk, and could it increase in Q2?
A:The overlay adjusts for potential macroeconomic deterioration linked to the Middle East conflict. It is expected to diminish in future quarters as macroeconomic consensus naturally feeds into loan loss provisioning.
Q:What is the impact of the Dutch mortgage floor change on the CET1 ratio and distribution policy?
A:The expiration of the Dutch mortgage floor by December 2026 will reduce risk-weighted assets by EUR 4 billion, adding 15 basis points to the CET1 ratio. Any structural excess above the 13% CET1 target will be returned to shareholders.
Q:What is the outlook for cost control and deposit campaigns?
A:Cost control remains strong, offsetting wage inflation and allowing for investments in growth. Deposit campaigns will be tailored to balance customer base growth and balance sheet management, using a mix of micro and above-the-line campaigns.
Q:How is the company managing the uncertainty in interest rate curves and its impact on replication portfolios?
A:The replication portfolio is managed as a risk management tool rather than for short-term gains. The company maintains a low risk appetite for interest rate risk and expects continued positive impacts from replication income.
Q:What are the main factors affecting the cost-income target of 52% by 2027?
A:The target reflects a balance between operational efficiencies and investments in diversifying and deepening client relationships. The focus is on achieving a consistent RoTE at scale rather than solely reducing the cost-income ratio.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific exit rate for the liability margin in March and the exact impact of higher energy prices on wholesale lending. Additionally, there was limited clarity on the timeline and specific sectors affected by potential macroeconomic changes.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI solution
ING
NII EUR
Netherlands
Wholesale Banking
account
bank
banking
base
basis point
book
buyback program
conversion
core equity
cost
deposit
development
distribution
effect
equity Tier
fee income
inflow
insurance
lending
market volatility
momentum
month
mortgage
reserving
resilience
risk asset
share buyback
slide
statement
volatility end
volume
ING Transcript
ING Groep N.V. (ING) Q1 2026 Earnings Call Transcript
Positive4-30
The earnings call reflects strong financial performance with increased net core lending and core deposits. Fee income growth is notable, especially in investment products. Expenses are well-managed, and the CET1 ratio is stable despite a share buyback. The Q&A reveals a positive outlook on liability margins, insurance strategy, and mortgage demand, although some uncertainties remain in wholesale banking. Overall, the company's strategic plans and financial health indicate a positive sentiment, likely leading to a stock price increase of 2% to 8%.
ING Groep N.V. (ING) Presents at European Financials Conference 2026 Transcript
Neutral3-18
ING Groep N.V. (ING) Q4 2025 Earnings Call Transcript
Positive1-30
The earnings call highlights strong financial performance with increased fee income, a significant lending book, and growth in deposits. The company shows robust product development and market strategy, notably in digital and sustainable initiatives. While risk costs and competition are concerns, the positive guidance and shareholder returns, including a share buyback and dividend, suggest a favorable outlook. The Q&A session indicates management's proactive approach to emerging risks and opportunities, further supporting a positive sentiment.
Calix, Inc. (CALX) Q4 2025 Earnings Call Transcript
Positive1-29
The earnings call summary and Q&A session indicate positive sentiment. The company has raised fee growth and total income expectations, maintained cost management, and announced substantial shareholder returns. Despite not including international expansion in 2026 numbers, confidence in growth and AI capabilities is high. Strong appliance margins and expected software margin improvements further support positive sentiment. The lack of specific guidance on certain revenue contributions is a minor concern but doesn't overshadow the overall optimistic outlook.
ING Report
Frequently Asked Questions
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