Bigger Story This article is part of ING's Annual Review 2015. read the 2015 Annual review

Financial results

Retail Banking posted strong 2015 results. The underlying result before tax rose 17.3% to EUR 3,928 million, driven by higher income and lower risk costs.

Underlying income increased by 3.0% to EUR 11,228 million in 2015, due to higher income in most of the Challengers & Growth Markets, while income in the Benelux remained flat. Interest results increased due to volume growth and an improved margin on savings, while the margin on current accounts declined. Lending margins remained stable. In 2015, income was negatively affected by EUR 127 million of non-recurring charges related to the mortgage portfolios in Italy and Belgium which recorded higher repayments and renegotiations than expected.

The net production of customer lending (excluding Bank Treasury, currency impacts, transfers of WestlandUtrechtBank (WUB) mortgages to NN Bank and the sale of mortgage portfolios in Australia) was EUR 6.8 billion in 2015. Net core lending, also excluding the run-off in the WUB portfolio, increased by EUR 9.0 billion, driven by growth outside the Netherlands. Net customer deposits (excluding Bank Treasury and currency impacts) grew by EUR 20.9 billion in 2015.

Operating expenses were slightly lower at EUR 6,430 million compared with EUR 6,456 million in 2014, which included EUR 349 million of redundancy provisions mainly related to the further digitalisation of our banking services in the Netherlands. Excluding these provisions, expenses rose by EUR 323 million, or 5.3%, of which almost half was caused by higher regulatory costs. The remaining increase was mainly due to business growth in the Challengers & Growth Markets, IT investments in the Netherlands, some smaller restructuring provisions in the Benelux, and a provision for potential compensation related to certain floating interest rate loans and interest rate derivatives that were sold in the Netherlands. This was partly offset by the cost savings from the restructuring programmes. The underlying cost/income ratio improved to 57.3% from 59.2% in 2014.